1. Complete the financing portion of Panera Bread Companys 2007 forecast financial statements, and provide a forecast for the next five years. As an initial (base case) analysis, assume all borrowings are some form of debt. You may also assume the share repurchase occurs in 2008 and that interest expense is equal to 6% of outstanding debt. Assume sales growth of 25% for the first two years after 2007 and 5% thereafter. Note that you need not provide a detailed forecast of the current asset and current liability accounts.

2. Given the need for external sources of capital, please contrast the desirability of external equity, a long-term note payable, and a short-term revolving line of credit

Panera Bread Company
Forecast Assumptions
Operating Ratios
	2003	2004	2005	2006	2007	Avg.	CHOICE
Bakery Caf	57.97%	60.26%	62.44%	65.49%	70.29%	63.29%	72.00%
Dough sold to franchisees	15.11%	13.70%	11.72%	10.33%	8.19%	11.81%	8.20%
Depreciation	5.03%	5.28%	5.16%	5.33%	5.71%	5.30%	5.30%
General and Administrative	8.66%	8.08%	7.85%	7.66%	7.43%	7.94%	7.40%
Current Assets	19.81%	17.66%	16.05%	15.39%	14.29%	16.64%	14.00%
Property, plant and equipment	40.24%	42.10%	41.98%	41.74%	40.95%	41.40%	41.00%
Goodwill and Other	10.56%	8.00%	10.32%	8.33%	10.48%	9.54%	9.50%
Current Liabilities	12.55%	11.63%	13.57%	13.22%	12.38%	12.67%	12.70%
Deferred Rent and other	3.74%	5.76%	5.28%	4.26%	4.29%	4.67%	4.30%
Tax Rate	36.68%	36.50%	36.50%	36.50%	37.45%	36.73%	37.00%
Additional Assumptions
Growth two years	25.00%
Growth thereafter	5.00%
Interest Rate	6.00%