Question
show the work on Excel please. The following sheet presents the balance sheet and value drivers of Yummy Company, which manufactures a very special tomato
show the work on Excel please. The following sheet presents the balance sheet and value drivers of Yummy Company, which manufactures a very special tomato sauce. (You might want to copy the table into Excel.)
Yummy Company, Financial Model | |
Value Drivers | |
Sales growth | 12% |
Current assets/Sales | 22% |
Current liabilities/Sales | 20% |
Net fixed assets growth rate | 5% |
Cost of goods sold/sales | 45% |
Depreciation rate (of average fixed assets at cost) | 20% |
interest rate on debt | 8% |
interest earned on cash balances | 4% |
tax rate | 36% |
dividend payout ratio | 25% |
sales | 2000000 |
WACC | 16% |
long term FCF growth rate | 4% |
Balance sheet | |
Cash | 460000 |
Current assets | 440000 |
Fixed Assets | |
At cost | 4000000 |
Depreciation | 500000 |
Net fixed assets | 3500000 |
total assets | 4400000 |
Current liabilities | 400000 |
Debt | 3000000 |
Stock (1500000 shares, issued at $0.5 each) | 750000 |
accumulated retained earnings | 250000 |
Total Liabilities + Equity | 4400000 |
Additional model assumptions are as follows:
The FCF evaluation is for a 5-year period. In addition, a terminal value should be determined using the long-term FCF growth rate.
The debt principal repayments are $300,000 each year.
Cash is a plug in the model.
please show work on excel
Make a pro forma model for Yummy and computer the firm value using a DCF valuation model with year-end discounting. (10 points)
Show in a graph the sensitivity of the enterprise value to the growth in sales; (5 points)
Show in a graph the sensitivity of the enterprise value to the companys WACC. (5 points)
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