Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Commercial Aircraft Finance Handbook

Authors: Ronald Scheinberg

1st Edition

1781372608, 978-1781372609

More Books

Students also viewed these Finance questions

Question

=+1. What organizational media tactics will you use?

Answered: 1 week ago