Archives
978-0073526898 Case Amzn Eval2 Model Replicating Analyst Model Part 1
Financial Statements ($000s) inactive Ticker Industry Code Sector Code Company Name Common Shares Outstanding 370,000 (in 000s at most recent fiscal year end) Estimated Price/Share=$14.98 Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast […]
978-0073526898 Case Amzn Eval2 Model Replicating Analyst Model Part 2
Estimated Price/Share=$14.98 Company Name: AMAZON COM INC Required Valuation Parameters (to compute value of common equity): ————————————————————–—————————————————————————-> 22.60% —————————-> 0 —————————————————————————-> 6/30/2001 ————> 1.00 Enter Cost of Debt:———————————————————————————————- 8.00% Enter Cost of Preferred Stock:—————————–————————–———————-> 9.00% Optional Valuation Parameters (to compute […]
978-0073526898 Case Amzn Eval2 Model Replicating Analyst Model Part 3
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 2,804,896 3,001,238 3,211,325 3,436,118 3,676,646 3,934,011 4,209,392 4,504,049 4,819,333 5,156,686 5,517,654 5,903,890 6,317,162 6,759,363 243,238 212,287 185,275 161,700 141,125 123,168 107,496 93,818 81,880 71,461 62,368 54,432 […]
978-0073526898 Case Amzn Eval2 Model Replicating Analyst Model Part 4
10 11 12 13 14 15 16 17 18 19 20 21 22 -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% -36.69% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% -2791787 […]
978-0073526898 Case Apple Part 1
Equity Valuation and Analysis with eVal Apple and the iFad Case Overview ⚫Comprehensive analysis of a growth company employing conservative accounting ⚫Assessment of company involves: –Evaluation of future growth opportunities –Sustainability of current profitability –Impact of conservative accounting on future […]
978-0073526898 Case Apple Part 2
Ratio Analysis (7) Ratio Analysis (8 & 9) ⚫Relative IBM, Apple does not use debt financing, thus losing out on the ability to leverage its high RNOA into an even higher ROE debt. ⚫Relative to IBM, Apple sits on a […]
978-0073526898 Case Bally Slides Part 1
Turnaround at Bally Total Fitness Case Overview ⚫A second revenue recognition case to compare and contrast with the Boston Chicken Case. ⚫New management promotes installment membership –Significant provision for loan losses on receivables –Revenues are deferred and recognized ratably over […]
978-0073526898 Case Bally Slides Part 2
Bally Revenue Restatement BALLY TOTAL FITNESS HOLDING CORP Consolidated Statements of Income 31-Dec-98 In Thousands Except Per Share Amounts For Period Ended Dec 31, 1998 12/31/98 Restated Net revenues: — — Membership revenues — — Initial membership fees on financed […]
978-0073526898 Case Bally Slides Part 3
What Happened at Bally? ⚫Revenue growth slows and income turns negative ⚫Took a $55 million charge for membership receivable reserve at the end of 2002. CEO resigns. ⚫Switched to modified cash-basis accounting at the end of 2003, resulting in a […]
978-0073526898 Case Boston Slides Part 1
Boston Chicken Case Case Overview ⚫Rapidly growing restaurant chain is one of the hottest names on Wall Street ⚫Sales and earnings show consistent growth ⚫But a small number of detractors argue that the strategy is flawed and the accounting numbers […]
978-0073526898 Case Boston Slides Part 2
Overall Evaluation of Boston Chicken’s Business Strategy ⚫Financing business is lackluster, but has important synergies for franchising business. Credit risk is a big concern here. ⚫Franchise business looks great, so long as franchisees can keep paying bills. ⚫Restaurant business looks […]
978-0073526898 Case Boston Slides Part 3
Pro Forma Provision Computations •Setting the Provision for Bad Debts at 10% of notes receivable issued during the period, we have: Provision = 10% of 1,467,065*= 146,707 *This amount is found in the investing section of the statement of cash […]
978-0073526898 Case EnCom Slides Part 1
EnCom Corporation The Analysis of Earnings Quality Defining Earnings Quality ⚫What criteria would a high quality accounting system satisfy? ⚫Accounting rate of return on equity (ROE) would provide good measure of internal rate of return (IRR) on the portfolio of […]
978-0073526898 Case EnCom Slides Part 2
Stage 2 of EnCom Example ⚫An incremental investment project is available to EnCom, with data as follows: –EnCom can engage in a marketing campaign during period 1, with total marketing costs of $300, payable in cash at the end of […]
978-0073526898 Case EnCom Slides Part 3
Stage 2 Questions 7. Compute EnCom’s ROE for each of the five periods using each of the above three accounting methods. Explain how each of the different accounting methods impacts EnCom’s ROE. •Immediately expensing the costs temporarily depresses ROE, but […]
978-0073526898 Case EnCom Slides Part 4
Measuring Accruals: Sloan (1996) ⚫Sloan’s definition of accruals: Accruals = (DCurrent Assets –DCash) – (DCurrent Liabilities –DST Debt) – Depreciation Expense Note that: Earnings – Cash from Operations = Accruals Deflate by total assets ⚫High Accruals => temporarily high earnings […]
978-0073526898 Case EnCom Spreadsheet
EnCom Stage 1 End of Period 0 1 2 3 4 5 Discount Factor at 10% 1.0000 0.9091 0.8264 0.7513 0.6830 0.6209 DCF Valuation Cash Inflows 0 600 1,200 1,200 1,200 1,200 Cash Outflows -1,720 -720 -720 -720 -720 0 […]
978-0073526898 Case GUT Web
Equity Valuation and Analysis with eVal The Gabelli Utility Trust Case Objectives ⚫To illustrate security mispricing in a setting where it is relatively straightforward to estimate intrinsic value ⚫Identify common impediments to arbitrage in securities markets ⚫Other ⚫Introduction to closed […]
978-0073526898 Case Intel Slides Part 1
Intel’s Earnings Torpedo Objectives of Intel Case ⚫Illustrate the role of sales growth rates and gross margins as the two key drivers of value. ⚫Illustrate how the extrapolation of unusually torpedo’, whereby stock price takes a sharp drop when these […]
978-0073526898 Case Intel Slides Part 2
Why Was the Stock Price Drop So Large? ⚫Recompute the valuation models in questions 2 and 3, but in each case assume that sales growth and margins immediately fall back from the 2000 levels to to 1999 levels in 2001 […]
978-0073526898 Case Interpreting Ratios Part 1
Ratio Analysis Framework for Business Analysis and Valuation 4. Financial Ratio Analysis 5. Cash Flow Analysis 4. Cash Flow Forecasts 3. Valuation Ratios 4. Complications Negative Values Value Creation and Destruction though Financing Transactions STEP 1 Understanding the Past 1. […]
978-0073526898 Case Interpreting Ratios Part 2
The Margin versus Turnover Trade- Off 0% 5% 10% 15% 20% 25% 30% 35% 0 1 2 3 4 5 6 7 8 9 10 11 Turnover Profit Margin ROE=10% ROE=20% Factors Influencing the Margin vs. Turnover Trade-Off ⚫Lower turnover […]
978-0073526898 Case Netflix Part 1
Netflix, Inc. Case Overview ⚫Comprehensive analysis of a growth company experiencing growing pains. ⚫Management claims them to be temporary growing pains ⚫Stock market senses more chronic problems ⚫Case involves evaluation of competing perspectives and conclusion regarding company’s prospects and valuation […]
978-0073526898 Case Netflix Part 2
Accounting Analysis (5) ⚫Netflix Provision for Income Taxes: –Netflix has a history of losses for both tax and financial reporting purposes. These losses produce net operating loss carryforwards (NOLS) to offset against future profits. never have to pay any taxes, […]
978-0073526898 Case Netflix Part 3
Valuation Analysis (13) ⚫The default valuation is -$49.44/share. ⚫The negative valuation arises because the default assumptions imply a terminal ROE of 3.6%, much lower than the cost of capital of 10%. lower than cost of capital), a negative value is […]
978-0073526898 Case NFLX 10 Part 1
Financial Statements ($000s) inactive Ticker Industry Code Sector Code Company Name #NFLX MG743 MG7 Common Shares Outstanding 52,732 (in 000s at most recent fiscal year end) Estimated Price/Share=$15.99 Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast […]
978-0073526898 Case NFLX 10 Part 2
Annual Dividend Yield 4.00% Value of Contingent Claim Per Share #NAME? Number of Shares Subject to Claim (000s) 1,000 Total Value of Contingent Claim ($000s) #NAME? Residual Income Valuation ($000) Company Name NETFLIX INC Most Recent Fiscal Year End 12/31/2004 […]
978-0073526898 Case NFLX 10 Part 3
Model Summary Sensitivity Analysis Historical Data For: Forecast Horizon 10 Years NETFLIX INC Most Recent Fiscal Year End: 12/31/2004 This Year’s ROE (%) 10.21% Average ROE (last five years) 977.87% Sales Growth (last five years) #DIV/0! Terminal Year’s ROE (%) […]
978-0073526898 Case NFLX 14 Part 1
Company Currently in Model is NETFLIX INC STEP 1 a STEP 2 a STEP 3 a VALUATION: User’s Guide FORECASTING THE FUTURE: UNDERSTANDING THE PAST:
978-0073526898 Case NFLX 14 Part 2
Data Center Industry Code LookUp Annual Financia Click Here f To import historical data double-click any cell or enter ticker above: Company Name Ticker Industry Sector ONTN Go Search Links to SEC filings, Company cial Data is originally from April […]
978-0073526898 Case NFLX 14 Part 3
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% […]
978-0073526898 Case NFLX 14 Part 4
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029 Estimated Price/Share=$12.07 Company Name: NETFLIX INC Required Valuation Parameters (to compute value of common equity): 10.00% 0 3/1/2005 1.00 Enter […]
978-0073526898 Case NFLX 14 Part 5
25 26 27 29 30 32 33 35 37 38 40 42 44 47 345 362 380 399 419 440 462 485 509 535 561 589 619 650 (3) (3) (3) (3) (3) (4) (4) (4) (4) (4) (5) (5) […]
978-0073526898 Case NFLX 14 Part 6
Equity Value 1621977 Equity Value at Current Date 1731933 Less Contingent Claims 0 Adjusted Value 1731933 Shares Out. 52,732 Price/Share 32.84404907 Numbers below are inputs for dropdown list in Quick ‘n’ Dirty 5 Years 10 Years 20 Years 10 11 […]
978-0073526898 Case NFLX 14 Part 7
23 24 14.22% 14.22% 5.00% 5.00% 1029973 1081472 150119 76890 47121 -31257 5262 -3173 23 24 14.22% 14.22% 5.00% 5.00% 2039436 2141408 297248 152249 93304 -61892 10420 -6284 23 24 14.22% 14.22% 5.00% 5.00% 7989232 8388694 1164430 596415 365507 -242454 […]
978-0073526898 Case OSTK Q3 05 Part 1
OVERSTOCK COM INC Consolidated Statements of Income In Thousands Except Per Share Amounts For Period Ended Jun 30, 2005 09/30/05 3m Notes Revenue Direct 61,499 40% Growth Fulfillment partner 98,797 66% Growth Total revenue $160,296 55% Growth Cost of goods […]
978-0073526898 Case OSTK Q3 05 Part 2
OVERSTOCK COM INC QUARTERLY FINANCIAL INFORMATION BALANCE SHEET QUARTERLY ASSETS (000s) FISCAL QUARTER ENDING 6/30/2005 3/31/2005 12/31/2004 CASH 31,350 37,611 198,678 MRKTABLE SECURITIES 88,625 155,157 88,802 RECEIVABLES 13,649 6,467 5,715 INVENTORIES 59,783 48,956 45,279 RAW MATERIALS NA NA NA WORK […]
978-0073526898 Case Overstock Slides Part 1
Overstock.com: Business Strategy Analysis Case Overview ⚫Comprehensive case that we will use throughout the course ⚫Rapidly growing “e–tailer” ⚫Strong sales growth and high stock price valuation ⚫But struggling to report a profit Overview of Business ⚫Close-out Internet retailer –http://www.overstock.com ⚫Revenues […]
978-0073526898 Case Overstock Slides Part 2
Sales Growth ⚫Growth rate in GAAP basis sales = 238.9/91.8 = 160% ⚫Growth rate in gross basis sales = 278.8/142.8 = 95% Source: Nissim and Penman (2001) GAAP Basis vs. Gross Basis Gross Profit Income Statement – Annual Overstock.com Inc. […]
978-0073526898 Case Overstock Slides Part 3
Trade-Off 3: Direct versus Fulfillment Partner 0% 5% 10% 15% 20% 25% 30% 35% 0 1 2 3 4 5 6 7 8 9 10 11 Turnover Profit Margin ROE=20% ROE=10% (Gross-Basis: we take returns) Direct Fulfillment Partner (Gross-Basis: they […]
978-0073526898 Case Overstock Slides Part 4
Key Insights from Analysis ⚫Overstock’s turnover looks a little slow –High balance of cash and marketable securities slows down aggregate turnover ratios –Aggressive use of fulfillment partners combined with gross- basis accounting for sales revenue should lead to higher turns […]
978-0073526898 Case Overstock Slides Part 5
Analyst Valuation Method ⚫Analyst report uses comparable enterprise value to revenue multiples with ‘discount retailing peers’ and ‘internet bellwethers’ as comparisons ⚫Argues that OSTK deserves a premium because of superior top-line growth prospects ⚫Note that enterprise value equals market value […]
978-0073526898 Case Ratio Case Notes
Instructor Notes for Interpreting Margin and Turnover Ratios* Overview: The objective of this case is to illustrate the determinants of margin and turnover ratios. Textbooks frequently recommend comparing margin and turnover ratios over time and across firms to identify the […]
978-0073526898 Case Salton Part 1
Accounting Analysis ▪Identifying accounting distortions –caused by estimation error, bad GAAP, or management manipulation ▪But you have to know the distortion exists! ▪From a valuation perspective, – Correcting the distortion = Forecasting the distortion’s reversal the RI model and accounting […]
978-0073526898 Case Salton Part 2
The Deal with George Foreman ▪the old deal with George: 60% of gross profit –approximately $64 million in 1999 ▪Is this an accounting distortion? ▪correcting the balance sheet today versus forecasting the correction in the future? http://www.biggeorge.com/familyman/familyman.htm ▪the new deal […]
978-0073526898 Case Sirius Part 1
Sirius Satellite Radio, Inc. Case Overview ⚫Comprehensive analysis of a growth company that requires economies of scale to attain profitability ⚫Company spends aggressively to increase subscriber growth in an attempt to achieve scale economies ⚫Subscriber growth falls short of target […]
978-0073526898 Case Sirius Part 2
Accounting Analysis (8) ⚫Assume that instead of using its current accounting practices for subscriber revenue, Sirius instead recognized subscriber revenue upon the receipt of subscriber payments. Estimate the Loss from operations that Sirius would have reported for the year ended […]
978-0073526898 Case Sirius Part 3
Forecasting Analysis (18) ⚫Evaluate the plausibility of the forecasting scenario you provided in answer to the preceding question. –We will defer the answer to this question until question 22 –Note that one particular challenge we face in this forecasting will […]
978-0073526898 Case Sirius Q17 Part 1
Financial Statements ($000s) inactive Ticker Industry Code Sector Code Company Name SIRI MG724 MG7 Common Shares Outstanding 1,346,227 (in 000s at most recent fiscal year end) Estimated Price/Share=$2.13 Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast […]
978-0073526898 Case Sirius Q17 Part 2
Annual Dividend Yield 4.00% Value of Contingent Claim Per Share #NAME? Number of Shares Subject to Claim (000s) 1,000 Total Value of Contingent Claim ($000s) #NAME? Residual Income Valuation ($000) Company Name SIRIUS SATELLITE RADIO Most Recent Fiscal Year End […]
978-0073526898 Case Sirius Q17 Part 3
Model Summary Sensitivity Analysis Historical Data For: Forecast Horizon 10 Years SIRIUS SATELLITE RADIO Most Recent Fiscal Year End: 12/31/2005 This Year’s ROE (%) -167.62% Average ROE (last five years) -695.11% Sales Growth (last five years) #DIV/0! Terminal Year’s ROE […]
978-0073526898 Case Suggested Solution To 4 Valuations Case W Compucorp
Suggested Solution to Four Valuation Models – One Value Case Part A: by hand computations 1) FCF to equity (i.e. net dividends) is computed as NIt – CEt. This gives 2001 2002 2003 2004 NI 3780 3834 4026 4227 chg […]
978-0073526898 PowerPoint Session 1 – BC Strat Part 1
Business Strategy Analysis •why won’t the company’s products/services become a commodity priced at the marginal cost of production? Rivalry Among Threat of Threat of Existing Firms New Entrants Substitute Products fixed/variable costs excess capacity PROFITABILITY Bargaining Power Bargaining Power of […]
978-0073526898 PowerPoint Session 1 – BC Strat Part 2
Fiscal Years Ended —————————————— December 25, December 31, December 29, 1994 1995 1996 —————————————— (53 weeks) —————————————— Revenue: Royalties and franchise related fees……. $43,603 $ 74,662 $115,510 Company stores……………………….. 40,916 51,566 83,950 Interest income………………………. 11,632 33,251 65,048 ——- ——– ——– […]
978-0073526898 PowerPoint Session 1 – BC Strat Part 3
DECEMBER 31, DECEMBER 29, 1995 1996 Boston Market Financed Area Developers: – ————————————— Total number of financed area developers……………………. 15 14 Total number of financed area developer stores open………… 627 841 Balance sheet data: Total gross assets………………………………….. $513,926 $ 640,534 […]
978-0073526898 PowerPoint Session 12 – 80 Minute Forecast Part 1
The 80 Minute Forecast Forecasting the 3rd quarter for Tim Hortons for period ended 9/30/2012, to be announced November 8. But first, some facts about quarterly earnings and seasonality announced in press release with exchange press releases, blackout period, no […]
978-0073526898 PowerPoint Session 12 – 80 Minute Forecast Part 2
seasonality in SGA/Sales (HD)? 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 8/2/09 8/3/08 7/29/07 7/30/06 7/31/05 8/1/04 8/3/03 8/4/02 7/29/01 7/30/00 sga/sales —- time —– seasonality in gross margin (HD)? 0 0.05 0.1 0.15 0.2 0.25 […]
978-0073526898 PowerPoint Session 13 – Valuation Equations Part 1
Valuation Equations or what’s happening inside the computer for the period ending 0 1 2 … T-1 T T+1 T+2 … NOA0 NOA1 NOA2 …NOAT-1 NOAT NOAT(1+g) NOAT(1+g)2 … -L0 -L 1 -L 2 … -L T-1 –L T -L […]
978-0073526898 PowerPoint Session 13 – Valuation Equations Part 2
DCF to All Investors − += )1( t t wf CrP = 1 t Pe= Pf investors Value to = −−+= 1 )()1( t tt t dd LIrP tt psps PSPDrP stockholders = 1 […]
978-0073526898 PowerPoint Session 15 – Intel Part 1
EPS Forecasting ◼Requires NI and average # of common shares outstanding. ◼Forecasted stock issuance/repurchase implies a change in the # shares. ◼Assume they are issue at end of year, at estimated price Pt+1. ◼issue/repurchase dollar amount of new equity at […]
978-0073526898 PowerPoint Session 15 – Intel Part 2
INTC earnings warnings 0 10 20 30 40 50 60 70 80 –10 -8 -6 -4 -2 0 2 4 6 8 10 days relative to announcement price 2001Q1 rls 2000Q3 rls What happened at Intel? what happened? 2000 2001 […]
978-0073526898 PowerPoint Session 16 HOGS Part I Part 1
Forecasting and Valuation: Hogs and Chestnuts Who profits when the Chinese eat? Bennet’s Law Source: FAO (2008). Zhongpin (HOGS) Valuation Ratios What is the PEG ratio? (use analyst forecasts) ◼“we believe that, ultimately, the projected 20% top–line growth should fall […]
978-0073526898 PowerPoint Session 16 HOGS Part I Part 2
HOGS income statement forecasts Sales –29% growth in 2010, 24% in 2011 from analyst report. Trend to 3% after that. CGS/Sales –hold margins constant. With rapidly growing market, less competitive pressure on taxes. 0% on chilled and frozen,25% on prepared […]
978-0073526898 PowerPoint Session 16 HOGS Part I Part 3
HOGS PPE/Sales forecast II if capacity utilization = used/available = .65 and this statistic is going to .90, then new(PPE/Sales) = old (PPE/Sales) * (.65/.90) new PPE/Sales = .358 * (.65/.90) = .259, trending over 10 years NFO –constant or […]
978-0073526898 PowerPoint Session 17 – Amazon Part 1
Amazon.com ◼cuddle up with a DCF model ◼critically evaluate a valuation model ◼what is the analyst assuming about profitability, efficiency and leverage? ◼are the pieces put together in a logical way? ◼consider the option value of owning a share of […]
978-0073526898 PowerPoint Session 17 – Amazon Part 2
balance sheet assumptions cash ◼what does the analyst report assume about cash? ◼set operating cash to 0% for all future periods ◼what is the valuation implication of doing this? balance sheet assumptions working capital ◼what does analyst model assume? ◼adjusted […]
978-0073526898 PowerPoint Session 17 – Amazon Part 3
Amazon.com –2,000,000 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 1999 2000 2001 2002 2003 2004 2005 AMZN –what happened Key takeaways from AMZN ◼ALWAYS forecast complete income statements and balance sheets in order to arrive at free cash flow forecasts. ◼Always […]
978-0073526898 PowerPoint Session 17 – Hogs and Chestnuts Part II Part 1
Chestnuts (American Lorain) and Chinese reverse mergers The Chestnut – she’s a fickled beast China’s a’ world’ Current World Annual Chestnut Production (~ 1 Million Tons) South Korea, 9% Turkey, 6% China, China, 59% Japan, 9% Italy, 5% Japan, 3% […]
978-0073526898 PowerPoint Session 17 – Hogs and Chestnuts Part II Part 2
valuation parameters So how did our analyst arrive at $9/share? reverse mergers …but there has been trouble The 349 Chinese reverse mergers so what is an investor to do? there are about 10,000 publicly traded stocks around the world, don’t […]
978-0073526898 PowerPoint Session 17 – Hogs and Chestnuts Part II Part 3
http://www.swongcpa.com/front/about/index are they bribing the auditors? shuffling money to friends and family? and what about HOGS? Disclosure: We have no positions in any stocks mentioned, and no plans to initiate any positions. China Economic Review has no interest or investments […]
978-0073526898 PowerPoint Session 18 – AOL Part 1
AOL Time Warner Merger ◼examine a famous merger case ◼describe the unique valuation issues surrounding mergers/acquisitions ◼describe some unique accounting issues surrounding mergers/acquisitions ◼answer the Zen question: what is the value of an overvalued stock? AOL Time Warner Merger ◼what […]
978-0073526898 PowerPoint Session 18 – AOL Part 2
EPS growth through acquisition ◼A stock acquisition generally improves EPS if the P/E of acquirer is greater than the P/E of target. ◼but beware of takeover premia, goodwill amortization and merger–related costs. ◼Target also has $100 NI and 50 shares. […]
978-0073526898 PowerPoint Session 2 – BC Acctg Part 1
Accounting Rules Finance Drools • •CEt= CEt–1 + NIt–Divt, or Divt= NIt–DCEt + =t e t r Div Value )1( –Forecast Divtby forecasting NItand CEt.. •Divt= Nit– DCEt Over life of firm, DCEt= 0, so Divt= Nit –Accounting NIteventually […]
978-0073526898 PowerPoint Session 2 – BC Acctg Part 2
In April 1996, the Company delivered 450,640 shares of common stock with a market value of approximately $15.0 million and a $6.8 million promissory note to acquire the equity interests of certain investors in Mid–Atlantic Restaurant Systems L.P. (“Mid–Atlantic”), its […]
978-0073526898 PowerPoint Session 2 – BC Acctg Part 3
⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ Operating Accruals = (NI –CFO)/TA ⚫ ⚫ ⚫ -5 -4 -3 -2 -1 0 1 2 3 4 5 0 0.05 […]
978-0073526898 PowerPoint Session 3 – PPD Acctg Part 1
The Four Tops – Its the Same Old Song Pre–Paid Legal Services – Q3 1999 ? An HMO for legal expenses •The Service –30 minutes on phone etc. –15.75 million individuals enroll –PPD has 603 thousand, or 3.8% of market […]
978-0073526898 PowerPoint Session 3 – PPD Acctg Part 2
What happens if the member quits before 3 years are up? •could account for as a write–off commission expense (+) xx commission advance (–) xx •or could do nothing! So what’s the big accounting issue in the press release? “Even […]
978-0073526898 PowerPoint Session 4 – Overstock Acctg And Ratios Part 1
1 Financial Statement Analysis Overstock.com War 2 Overstock.com Overview of Business What do they do? www.overstock.com Performance? http://finance.yahoo.com/q/bc?s=OSTK&t=5y&l=on&z=l&q=l&c= 3 Overstock.com: Overview of Business Key success factors? Key risks factors? 4 1. Revenue Recognition Major switch from commission basis to gross […]
978-0073526898 PowerPoint Session 4 – Overstock Acctg And Ratios Part 2
Next, Financial Analysis Framework for of Business Analysis and Valuation Financial Statements Analysis Tools competitor financials, bond ratings, beta factors, security prices etc. Other Public Data: industry data, analyst reports, Strategy Analysis Accounting Analysis Financial Analysis Prospective Analysis Business Application […]
978-0073526898 PowerPoint Session 4 – Overstock Acctg And Ratios Part 3
18 Margins and Turnover 12.8% 9% Boston Chicken, 1996 Fiscal Years Ended ——————————————————- December 25, 1994 December 31, 1995 December 29, 1996 —————– —————– —————– <S> <C> <C> <C> Cash Flows from Operating Activities: Net income……………………………………………… $ 16,173 $ 33,559 […]
978-0073526898 PowerPoint Session 5 – RCL Ratios Part 1
Royal Caribbean Cruises Ratio Analysis and Forecasting loveboat 1 2 The Cruise Experience 3 Industry Growth Rates 0 1000 2000 3000 4000 5000 6000 1980 1981 1982 1983 1984 1985 1986 1987 1996 1997 1998 1988 1989 1990 1991 1992 […]
978-0073526898 PowerPoint Session 5 – RCL Ratios Part 2
11 Advance Dupont breakdown Royal Caribbean Carnival RNOA= 498,639/4,757,629 893,398/5,298,064 Net Operating Margin (NOI/Sales) 498,639/2,636,291 = 18.9% 893,398/3,009,306 = 29.7% x NOA Turnover (Sales/NOA) 2,636,291/4,757,629 = 0.554 3,009,306/5,298,064 = 0.568 + Spread (RNOA – NBC) 10.5% – 6.7% = 3.8% […]
978-0073526898 PowerPoint Session 6 – RCL Forecasting Part 1
what direction is this ship headed? Forecasting for the Love Boat Jackson 5 – The love you save firm sales unpredictable series based on past data forecast firm sales Figure 8.1 Estimating Industry and Firm Sales from Macroeconomic Data estimate […]
978-0073526898 PowerPoint Session 6 – RCL Forecasting Part 2
estimating industry growth -2.0 0.0 2.0 4.0 6.0 8.0 10.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 % growth in GDP % growth in Recreation Expenditures % Rec growth = 3.23+1.14%GDP growth -5.0 0.0 5.0 10.0 15.0 20.0 25.0 1980 […]
978-0073526898 PowerPoint Session 6 – RCL Forecasting Part 3
ratio times (1+.9*(.158))/(1.158). X’ord item for $47.7M for 9/11/2001 as given in case, = 1.2% of sales. My Income Statement Forecast Assumptions Actual Actual Actual Actual Actual Forecast Forecast Forecast Fiscal Year End Date 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 […]
978-0073526898 PowerPoint Session 8 – HD Part 1
1 Financial Statement Analysis Forecasting Home Depot’s fourth quarter of 2005 financial statements super freak 2 products as well as other services. •Target individual homeowners, small contractors, and moving into commercial and industrial customers. Overview of business/industry • World’s largest […]
978-0073526898 PowerPoint Session 8 – HD Part 2
11 What did you learn from “The Home Depot Investor and Analyst Conference” held on January 13, 2005 ? http://ir.homedepot.com/releases.cfm 2.2 in 2004) ATLANTA, Jan 19,2006 : (Carol Tome, CFO) – Sales growth of 10% to 12% (80.4 to 81.9 […]
978-0073526898 PowerPoint Session 8 – HD Part 3
19 Next, forecasting CGS and SG&A: Are they also seasonal? 29.5% 29.6% 29.9% 30.0% 29.7% 30.2% 30.5% 30.4% 31.6% 32.0% 31.2% 31.3% 32.9% 33.4% 33.3% 33.5% 31.9% 30.8% 30.8% 32.0% 32.7% 34.2% 33.6% 33.2% 20.3% 18.6% 20.8% 21.5% 19.2% 20.7% […]
978-0073526898 PowerPoint Session 9 – Tale Of Two Movie Theaters Part 1
Debt and Default •Who cares about debt and default risk? •Vfirm = Vequity + Vdebt –If Vfirm > > Vdebt then use PV of respective future pmts to value debt and equity –If Vfirm<<Vdebt then , Vequity=0, Vdebt = PV […]
978-0073526898 PowerPoint Session 9 – Tale Of Two Movie Theaters Part 2
The Movie Industry 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 1995 1996 1997 1998 1999 2000 box office gross sales (M) average attendance (M) $4.35/ticket $5.39/ticket 11 12 Multiplexes and Megaplexes average screens/theater 0 1 2 3 […]
978-0073526898 PowerPoint Session 9 – Tale Of Two Movie Theaters Part 3
19 What Happened? •Country Cinema (aka Carmike Cinemas) defaulted and filed for bankruptcy protection in August 2000 –City Screens is AMC Entertainment –Revenue declined rapidly as Megaplexes attracted due to increased ticket prices and international growth •Country Cinema closed 25% […]