Here is theValuation Spreadsheet (attached) for this weeks assignment. You can use these models to value your project company. (Starwood Hotels)

Page 1 INPUTS FOR VALUATION Current Inputs Enter the current revenues of the firm = Enter current capital invested in the firm = Enter the current depreciation = Enter the current capital expenditures for the firm = Enter the change in Working Capital in last year = Enter beginning shareholder's equity Enter the value of current debt outstanding = Enter the number of shares outstanding = $12,406 $10,000 (Book Value of Equity + Book Value of Debt) $233 $298 (you might try an average of the prior 3 years) $115 (current assets - current liabilities for the most recent year) - (current assets - current liabilities for the prior year) $20,000 $10,000 1,500.00 High Growth Period Your Inputs Enter the growth rate in revenues for the next 5 years = 25.00% What will all operating expenses be as a % of revenues in the fifth year? 70.00% (Operating expenses include depreciation: This is equal to (1-Pre-tax Operating Margin)) How much debt do you plan to use in financing investments? Enter the growth rate in capital expenditures & depreciation 50% (you might try an average of the prior 3 years) 25.00% (you might try an average of the prior 3 years) Enter working capital as a percent of revenues 7.50% (current assets - current liabilities) / Revenues Enter the tax rate that you have on corporate income 36.00% (you might try an average of the prior 3 years) What beta do you want to use to calculate cost of equity = 1.25 Enter the current long term bond rate = 6.50% Net income 13,796.00 income stat / revenue 5.46% ratios>key ratios 6,865.00 financials>balance 3.252B ycharts key ratios > profitab key ratios > profitab > roe 49.25 NET PROFIT MARGIN HOT WYN MAR INDUSTRY 2005 7.06% 12.92% 5.79% 2006 17.44% 7.47% 5% 2007 8.80% 9.24% 5.36% 2008 5.57% -25.09% 2.81% 2009 1.55% 7.81% -3.17% 2014 10.57% 10.02% 5.46% KEY RATIOS/ PROFITABILITY ASSET TURNOVER HOT WYN MAR INDUSTRY 2005 0.48 0.38 1.34 2006 0.55 0.41 1.42 2007 0.65 0.44 1.48 2008 0.6 0.43 1.44 2009 0.51 0.4 1.3 2010 0.55 0.41 1.38 2011 0.58 0.46 1.65 2012 0.69 0.49 1.93 2013 0.69 0.52 1.95 2014 0.69 KEY RATIOS/ PROFITABILITY 0.54 2.02 2009 4.8 3.48 6.95 2010 3.96 3.23 5.67 2011 3.24 4.04 2012 2.82 4.90 2013 2.61 6.00 2014 5.68 7.71 KEY RATIOS/ PROFITABILITY FINANCIAL LEVERAGE HOT WYN MAR INDUSTRY 2005 2.39 1.82 2.62 2006 3.08 2.67 3.28 2007 4.63 2.97 6.26 2008 5.99 4.09 6.45 RETURN ON COMMON EQUITY HOT WYN MAR INDUSTRY 2005 8.44 8.88 18.25 2006 25.38 6.68 20.72 2007 21.32 11.39 34.4 2008 17.8 -36.67 25.77 2009 4.24 11.65 -27.44 2010 101.56 13.52 33.59 2009 0.79 2010 23.53 2011 18.03 16.2 49.25 2012 18.45 19.22 2011 5.06 2012 6.1 2013 19.55 24.32 2014 25.92 36.76 KEY RATIOS/ PROFITABILITY RETURN ON TOTAL ASSETS ROA (%) HOT 2005 3.41 2006 9.6 2007 5.73 2008 3.4 2013 7.21 3054605240 2014 7.05 WYN MAR INDUSTRY 4.92 7.78 3.07 7.1 4.03 7.94 -10.72 4.06 3.1 -4.11 4.04 5.42 4.52 2.66 4.33 9.32 4.5 9.53 5.45 KEY RATIOS/ PROFITABILITY 11.03 2009 21.82 51.39 11.32 2010 22.76 51.29 12.62 2011 23.38 52.4 10.38 2012 24.06 53.84 13.42 2013 68.54 52.21 13.41 2014 71.45 52.58 14.25 KEY RATIOS/ PROFITABILITY 2009 -8.79 -25.86 19.34 2010 34.97 21.76 13.27 - 2011 10.38 25.47 9.98 - 2012 -57.46 -69.75 9.10 - 2013 84.93 33.39 16.56 - 2009 4.17 4.75 5.65 2010 4.94 5.34 6.97 2011 5.34 5.79 14.72 2012 8.18 5.73 619.94 2013 6.66 6.6 2009 0.74 0.92 1.25 2010 1.07 1.11 1.35 2011 1.27 1.11 0.52 2012 0.95 0.97 0.53 2013 1.04 1.08 0.71 2014 0.95 Key ratio/liquidity financial health/liquidity 1.00 0.63 2009 0.26 0.45 0.42 2010 0.61 0.56 0.58 2011 0.55 0.54 0.38 2012 0.47 0.53 0.4 2013 0.68 0.63 0.45 2014 0.67 KEY RATIOS / FIN HEALTH 0.58 0.39 2009 0.28 0.06 0.13 2010 0.35 0.07 0.16 2011 0.32 0.07 0.16 2012 0.58 0.06 0.13 2013 0.60 0.08 0.14 2014 KEY RATIOS / FINANCIALS 0.41 CASH FLOW FROM OPERATIONS/ LIABILITIE 0.06 0.14 2009 1.26 1.40 1.17 2010 1.34 1.45 1.21 2011 1.45 1.33 0.88 2012 1.55 1.26 0.83 2013 1.62 1.20 0.83 2014 TTL ASSETS/TTL LIABILITIES 1.21 1.15 0.76 2009 1.62 0.68 1.96 2010 1.3 1.2 1.7 2011 0.88 1.69 2012 0.53 2.08 2013 0.45 2.84 2014 1.69 key ratios/financial health/liquidity fin hea 3.82 2009 -0.29 5.32 -2.54 2010 2.41 4.37 4.06 2011 2.97 5.28 3.17 2012 4.64 5.76 7.2 2013 9.04 6.21 8.48 2014 9.06 key ratios / profitability / profitalbility 8.48 10.46 2009 2010 2011 2012 2013 2014 GROSS PROFIT MARGIN GPM HOT HLT MAR INDUSTRY 2006 27.35 53.38 13.88 2005 0 53.82 11.32 2007 28.12 51.42 15.06 2008 26.41 52.56 12.6 ASSET MANAGEMENT Operating Working Capital Turnover HOT WYN MAR INDUSTRY 2006 -9.18 51.23 15.35 2005 -10.03 2.62 641.67 2007 -22.21 -35.16 18.66 2008 -11.32 -16.79 15.42 2014 -46.38 FMLA: net sales/working capital 660.13 12.11 INVENTORY TURNOVER 2006 10.27 3.71 8.67 2005 HOT WYN MAR INDUSTRY 3.45 2007 6.91 3.83 7.98 2008 5.11 4.06 6.36 2014 7.54 7.73 key ratios/efficiency ratios CURRENT RATIO 2006 0.74 1.04 1.31 2005 0.79 1.98 1.01 HOT WYN MAR INDUSTRY 2007 0.87 0.94 1.24 2008 0.81 0.88 1.33 QUICK RATIO 2006 0.32 0.52 0.52 2005 0.53 1.42 0.52 HOT WYN MAR INDUSTRY 2007 0.37 0.48 0.51 2008 0.35 0.41 0.41 OPERATING CASH FLOW RATIO 2006 0.20 0.08 0.16 2005 0.27 0.13 0.16 HOT WYN MAR INDUSTRY 2007 0.43 0.07 0.10 2008 0.24 0.09 0.09 DEBT AND COVERAGE DEBT TO ASSETS RATIO HOT WYN MAR INDUSTRY 2006 1.48 1.60 1.44 2005 1.72 2.22 1.62 2007 1.28 1.51 1.19 2008 1.20 1.32 1.18 TOTAL DEBT / COMMON EQUITY Debt to Equity Ratio HOT WYN MAR INDUSTRY 2006 0.61 0.73 0.69 2005 0.56 0.34 0.52 2007 1.73 0.91 1.95 2008 2.16 0.78 2.16 INTEREST COVERAGE 2006 2005 HOT WYN MAR INDUSTRY N/A N/A 2007 N/A 2008 N/A -10.09 SUSTAINABLE GROWTH RATE 2005 2006 2007 2008 HOT WYN MAR INDUSTRY 4.25% 0 7.06% 18.63% 0.00% 17.90% 13.86% 10.98% 28.79% 6.11% 0.00% 16.98% 0.00% 10.50% 0.00% 82.87% 10.36% 27.81% 17.56% 12.57% 19.26% 8.80% 12.80% 0.00% 10.07% 15.78% 0.00% 3.45% Sustainable-growth rate = ROE x (1 - divide 24.85% 0.00% 2005 -596 1,273 18 2006 -651 75 792 2007 -277 -124 696 2008 -522 -255 835 2009 -536 -145 564 2010 145 177 881 2011 542 167 -1,234 2012 -110 -65 -1,298 2013 72 150 -772 Current Liabilities HOT WYN MAR INDUSTRY 2005 2,879.00 1295 23.35 2006 2,461.00 1977 29.37 2007 2,101.00 2180 32.16 2008 2,688.00 2169 28.45 2009 2,027.00 1885 28.83 2010 2,161.00 1575 27.84 2011 1,992.00 1563 43.28 2012 2,029.00 1931 43.72 2013 1,924.00 1790 39.37 2014 2,450.00 1859 FINANCIALS/BALANCE SHEET 44.57 Total Liabilities HOT WYN MAR INDUSTRY 2005 7,243.00 4134.00 5,278.00 2006 6,271.00 5961.00 5,970.00 2007 7,546.00 6943.00 7,513.00 2008 8,082.00 7231.00 7,523.00 2009 6,937.00 6664.00 6,791.00 2010 7,305.00 6499.00 7,398.00 2011 6,606.00 6791.00 6,691.00 2012 5,724.00 7533.00 7,627.00 2013 5,402.00 8118.00 8,209.00 2014 7,134.00 8424.00 FINANCIALS/BALANCE SHEET 9,065.00 2005 49.70 2006 26.60 2009 2010 18.40 23.40 17.20 2011 2.60 22.40 60.90 2012 52.30 33.40 27.70 2013 48.50 35.10 28.20 2010 764.00 462 1,151.00 2011 641.00 479 1,089.00 2012 1,184.00 472 989.00 2013 1,151.00 624 1,140.00 Other Info Operating Working Capital HOT WYN MAR INDUSTRY Payout Ratios HOT WYN MAR INDUSTRY OPERATING CASH FLOW HOT WYN MAR INDUSTRY 14.4 13.6 2005 764.00 520 837.00 2006 500.00 450 970.00 2007 35.00 3.60 16.3 2007 895.00 461 778.00 2008 65.70 9.90 34.1 2008 646.00 641 641.00 2009 571.00 432 868.00 Sources HOT WYN MAR http://financials.morningstar.com/ratios/r.html?t=HOT http://financials.morningstar.com/ratios/r.html?t=WYN®ion=usa&culture=en-US http://financials.morningstar.com/ratios/r.html?t=MAR YCHARTS http://ycharts.com/financials/WYN/balance_sheet/annual 2014 -129 8 Key Ratios/financials -1,139 2014 86.70 key ratios/financials/payout ratios 32.40 31.60 2014 994.00 financials/cashflow/operating cash flow 543 1,224.00 y financial health ES alth end-payout ratio)