The story behind your analysis of your forecast of the future based on your spreadsheet. Why did
Fantastic news! We've Found the answer you've been seeking!
Question:
The story behind your analysis of your forecast of the future based on your spreadsheet. Why did you choose the specific growth rates? What impact did they have on the value of Walmart? Use the Walmart Proforma Income Excel spreadsheet
Transcribed Image Text:
Walmart --- Pro Forma Income Statements ($ in millions) M&A - Current Value Estimate - 2019 Actual Terminal Value Year Fiscal Year 2019 2020 2021 2022 2023 2024 Year 5 Sales $514,405 $524,693 $535,187 $545,891 $556,809 $567,945 Growth Rate 2.00% Variable Costs 75.00% $385,301 $393,520 $401,390 $409,418 $417,606 $425,959 Gross Profit $129,104 $131,173 $133,797 $136,473 $139,202 $141,986 Fixed Costs - SG&A $96,469 $98,398 $100,366 $102,374 $104,421 $106,510 2.00% Other Income ($4,800) Depreciation $10,678 $10,892 $11,109 $11,332 $11,558 $11,789 2.00% ΕΒΙΤ $17,157 $21,883 $22,321 $22,767 $23,223 $23,687 Taxes 23.00% $4,790 $5,033 $5,134 $5,237 $5,341 $5.448 Net Income $12,367 $16,850 $17,187 $17,531 $17,882 $18,239 EPS - Before Interest Exp. $4.19 $5.71 $5.83 $5.94 $6.06 $6.18 Cash Flows Operating Cash Flow $27,742 $28,297 $28,862 $29,440 $30,029 Residual Value (OFFER) $364,783.27 PE Mulitple 20 assumed Capital Spending Cash Flow $0 $27,742 $28,297 $28,862 $29,440 $394,812 Discount Rate (WACC) 11.00% assumed Net Present Value $322,757.14 Our current estimate of WalMart's total value in Millions Walmart --- Pro Forma Income Statements ($ in millions) M&A - Current Value Estimate - 2019 Actual Terminal Value Year Fiscal Year 2019 2020 2021 2022 2023 2024 Year 5 Sales $514,405 $524,693 $535,187 $545,891 $556,809 $567,945 Growth Rate 2.00% Variable Costs 75.00% $385,301 $393,520 $401,390 $409,418 $417,606 $425,959 Gross Profit $129,104 $131,173 $133,797 $136,473 $139,202 $141,986 Fixed Costs - SG&A $96,469 $98,398 $100,366 $102,374 $104,421 $106,510 2.00% Other Income ($4,800) Depreciation $10,678 $10,892 $11,109 $11,332 $11,558 $11,789 2.00% ΕΒΙΤ $17,157 $21,883 $22,321 $22,767 $23,223 $23,687 Taxes 23.00% $4,790 $5,033 $5,134 $5,237 $5,341 $5.448 Net Income $12,367 $16,850 $17,187 $17,531 $17,882 $18,239 EPS - Before Interest Exp. $4.19 $5.71 $5.83 $5.94 $6.06 $6.18 Cash Flows Operating Cash Flow $27,742 $28,297 $28,862 $29,440 $30,029 Residual Value (OFFER) $364,783.27 PE Mulitple 20 assumed Capital Spending Cash Flow $0 $27,742 $28,297 $28,862 $29,440 $394,812 Discount Rate (WACC) 11.00% assumed Net Present Value $322,757.14 Our current estimate of WalMart's total value in Millions
Expert Answer:
Answer rating: 100% (QA)
lulting the grwth rte revels hw yur mny is trending Hwever ne yu knw whether grwth is delining r inresing yu need t t un tht infrmtin If yu lulte grwt... View the full answer
Related Book For
Organizational Behavior Science The Real World and You
ISBN: 978-1111825867
8th edition
Authors: Debra L. Nelson, James Campbell Quick
Posted Date:
Students also viewed these general management questions
-
Why did you choose to analyze this company? What were the opinions of some of your referenced articles on this stock as an investment? Please note that it is best if there is at least some...
-
Work in process, January 1: 18,400 Raw materials inventory, January 1: 16,700 Raw materials purchases 152,500 Total raw materials available for use 169,200 Less: Raw materials inventory, December 31:...
-
Why is a simple forecast of operating income based on book value usually not a good forecast? When might such a forecast be a good forecast?
-
Khairul has been working with Tun Hamid Energy Bhd since 1 February 2009 as a Human Resource Executive. Beginning 1 January 2014, he was promoted as Human Resource Manager. Details of his...
-
Journalize the following labor- related transactions for Creative Crystal, Ltd. at its plant in Portland, Oregon. Plant janitors wages ......... $ 570 Plant furnace operators wages ..... 880 Glass...
-
In 1816 Robert Stirling, a Scottish clergyman, patented the Stirling engine, which has found a wide variety of applications ever since. Fuel is burned externally to warm one of the engines two...
-
Using the following extended data from question 1, consider the three alternatives using CVP. Prepare your answer by designing a computer spreadsheet to model the data. DAY TOURS Option 1 Option 2...
-
The financial statements of Apple Inc. are presented in Appendix A. Instructions for accessing and using the companys complete annual report, including the notes to the financial statements, are also...
-
The following accounts were taken from the records of a company as of December 31, 2019: Account Payable $47,000, Account Receivable $20,000, Building $215,000, Cash $15,000, Land $76,000, Bonds...
-
On December 1, 2020, Papadopoulos Seasonings had the following account balances. During December, the company completed the following transactions. Dec. 7 Received 3,600 cash from customers in...
-
. Problem 7-1 Interest Payments (LG7-1) Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 3.85 percent coupon...
-
True or false: An employees work environment has no influence on whether he or she will engage in substance abuse. a. True b. False
-
Workplace bullies have been known to possess high levels of . a. self-confidence b. aggression c. sleep deprivation d. social problems
-
A heuristic framework for helping managers cope with theft is called . a. crime stopper b. audit check c. steal d. honesty
-
In the near future, will organizations have at their disposal tests that can precisely identify job candidates with a high propensity to misbehave? Explain.
-
True or false: Communication, conflict resolution, and problem-solving skills will help a person be a better team member. a. True b. False
-
Suppose Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. The company expects to install this system in its...
-
Fred Farmer needs to prepare a balance sheet for his bank. He spent the day getting the following information. Fred needs your help to build a balance sheet and evaluate it. The information was...
-
Describe the advantages and disadvantages of group decision making.
-
Contact the human resources manager of a local business. Ask if he or she would take a few minutes to discuss some issues about rsums with you. Structure your discussion around the following...
-
According to Rosabeth Moss Kanter, what are the symbols of power? The symptoms of powerlessness?
-
Transatlantic Arbitrage. A corporate treasury working out of Vienna with operations in New York simultaneously calls Citibank in New York City and Barclays in London. The banks give the following...
-
Venezuelan Bolivar (A). The Venezuelan government officially floated the Venezuelan bolivar (Bs) in February 2002. Within weeks, its value had moved from the pre-float fix of Bs778/$ to Bs1025/$. a....
-
Venezuelan Bolivar (B). The Venezuelan political and economic crisis deepened in late 2002 and early 2003. On January 1, 2003, the bolivar was trading at Bs1400/$. By February 1, its value had fallen...
Study smarter with the SolutionInn App