The company doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. D'Leon's results were not satisfactory, to put it mildly. Its board of directors, which consisted of its president, vice president, and major stockholders (all of whom were local businesspeople), was most upset when directors learned how the expansion was going. Unhappy suppliers were being paid late, and the bank was complaining about the deteriorating situation and threatening to cut off credit. As a result, Watkins was informed that changes would have to be madeand quickly; otherwise, he would be fired. Also, at the board's insistence, Donna Jamison was brought in and given the job of assistant to Fred Campo, a retired banker who was D'Leon's chairperson and largest stockholder. Campo agreed to give up a few of his golfing days and help nurse the company back to health, with Jamison's help. Managers' performance is evaluated using measures such as Market Value Added or MVA = Difference between market value and book value of a firm's common equity, similarly, for Economic Value Added, EVA = Estimate of a business' true economic profit for a given year. An MS-Excel file containing D'Leon company's financial statements is uploaded in this discussion board. This company undertook a major expansion in 2017. Download the excel file and read the description of the question in the "Sheet 1". Then you need to open the "Sheet2" and go over the financial statements of the company. On the same sheet2, you need to work on Part A and Part B that are located at the end (scroll down) of the Statement of Cash Flows. Check the note below on how to use the excel file. The lecture note has formulas and explanations on how to find the following indicators 1. What effect did the expansion have after tax operating operatir apital . and net income? Calculate and show it in the excel file. 2. What effect did the company's expansion have on its free cash flow? Calculate FCF for 2018 and show it in the excel file. Did you get a positive or negative FCF? 3. Calculate the firm's MVA using 2017 and 2018 data and show it in the excel file. The company doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. D'Leon's results were not satisfactory, to put it mildly. Its board of directors, which consisted of its president, vice president, and major stockholders (all of whom were local businesspeople), was most upset when directors learned how the expansion was going. Unhappy suppliers were being paid late, and the bank was complaining about the deteriorating situation and threatening to cut off credit. As a result, Watkins was informed that changes would have to be madeand quickly; otherwise, he would be fired. Also, at the board's insistence, Donna Jamison was brought in and given the job of assistant to Fred Campo, a retired banker who was D'Leon's chairperson and largest stockholder. Campo agreed to give up a few of his golfing days and help nurse the company back to health, with Jamison's help. Managers' performance is evaluated using measures such as Market Value Added or MVA = Difference between market value and book value of a firm's common equity, similarly, for Economic Value Added, EVA = Estimate of a business' true economic profit for a given year. An MS-Excel file containing D'Leon company's financial statements is uploaded in this discussion board. This company undertook a major expansion in 2017. Download the excel file and read the description of the question in the "Sheet 1". Then you need to open the "Sheet2" and go over the financial statements of the company. On the same sheet2, you need to work on Part A and Part B that are located at the end (scroll down) of the Statement of Cash Flows. Check the note below on how to use the excel file. The lecture note has formulas and explanations on how to find the following indicators 1. What effect did the expansion have after tax operating operatir apital . and net income? Calculate and show it in the excel file. 2. What effect did the company's expansion have on its free cash flow? Calculate FCF for 2018 and show it in the excel file. Did you get a positive or negative FCF? 3. Calculate the firm's MVA using 2017 and 2018 data and show it in the excel file
