Answer the following questions

1. Calculate the ROE and ROCE of Starbucks for the last 4 years and comment its

   performance (table 1).

2. Based on the forecasting information in Exhibit 3, estimate the after tax operating

   income in table 1. Do not forget to give back the table 2.

3. We assume that at to (end of 2020), the company plans to open 2 500 additional stores, accounting for 2 500 K$. Estimate the free cash flows from 2020 to 2023 in table 3. Note: consider in 2020 the only initial cash flows relating to the project itself.

4. From information provided in Exhibit 4, estimate the weighted average cost of capital.

5. Evaluate if the project of is profitable through the NPV. Comment

6. Estimate the value of equity of Starbucks by using the discounted Model (g = 5%)

Not forget to give back these 3 tables :

YEAR	1	2	3	4
Net Income
Total Equity
ROE %
NOPAT
Total capital employed
ROCE %

in K$	Y1	Y2	Y3	Y4
Net sales
EBIT
Corporates Taxes
After tax operating income (NOPAT)

in K$	T0	T1	T2	T3	T4
NOPAT
Depreciation & Amortization
variation in NWC
initial investment
initial NWC
Divestment
Free Cash Flows

Exhibit 1 - Income statement 2022 2023 5294 6369 2020 9411 7509 489 1413 4963 362 2021 7787 6120 479 1188 387 801 117 4160 304 830 1044 340 In KS Net sales Operating costs General, selling and administrative costs EBITDA Depreciation and Amortization EBIT Non operating income income from equity investees) Interest EBT Taxes Net Income 467 250 580 946 704 152 93 75 11 1 0 42 1056 907 796 655 232 384 325 302 494 672 582 423 Exhibit 2 - Balance sheet in K$ 2021 2023 145 Assets Cash & equivalents Account receivables Inventories Other currents assets 140 2020 281 288 692 435 1696 313 224 636 357 1530 2022 174 191 546 298 1209 423 643 1351 Total current assets Financial assets Plant & Equipment Intangible assets 280 3109 258 3647 225 2475 199 2899 262 1915 128 2305 304 1638 97 2039 Total net fixed assets Total assets 5343 4429 3514 3390 2021 2022 221 Liabilities & Equity Account payables Note payables Other currents liabilities 830 2020 391 297 1467 2155 904 341 233 1362 1936 265 2023 199 425 122 746 170 Total Current liabilities Total LT debt 176 1227 197 2244 1960 Common stock Paid in capital 40 2284 2188 40 2228 1478 996 2474 130 2090 Total Equity Total Liabilities & Equity 5343 4429 3514 3390 Exhibit 3 Forecasting information 2024 10% The growth rate of net sales EBIT Depreciation & amortization Corporate taxes Net working capital (K$) Divestment (K$) 2021 2022 2023 5% 5% 10% 10% of sales straight line depreciation on 4 years 35% -200 -150 80 100 1500 Exhibit 4 - Cost of Capital 10% 6% Market return (Rm) Risk free rate (Rf) Beta Cost of debt (Rd) Equity (K$) Debt (K$) 1,25 5% 2284 904