This requires two forecasts. organic strategy, merger or acquisition growth strategy and analysis

Week 8 Growth Analysis - Organic & Merger/Acquisition (Rev. 030917) MAKE SURE THAT YOU DOWNLOAD THE FILE SO THAT THE ATTACHMENTS ARE VISIBLE Students may elect to use the eVal Financial Forecasting Model or Prof. Stevens' Excel Financial Forecasting model for this assignment. The assignment requires two separate financial projections - one examines the organic growth alternative and the other examines the merger/acquisition alternative. If the eVal model is selected, make sure that financial information is available for the company that is selected for the assignment (See: http://www.lundholmandandsloan.com). Similarly, if Prof. Stevens' model is used for the assignment make sure that financial information is available (e.g., Yahoo Finance, etc.). The two (organic and merger/acquisition) growth forecast Excel models (using either eVal or Prof. Stevens' model) must be submitted with the assignment. Assignment Using the company selected for the assignments, determine two growth strategies for the selected company (one strategy shows organic growth, the other shows merger or acquisition). Prepare financial projections using eVal or Prof. Stevens' Financial Forecasting Model for the two growth strategies. The projections need to show the results of company operations following implementation of each strategy. Then, prepare a written analysis and recommendation for the growth strategy that is recommended for the selected company and defend the recommendation. The assumptions used in No. 1 and No. 2 below must be summarized using one of the sample tables provided below. The Excel file with the assumptions also must be submitted with the assignment. The analysis needs to include: 1. Explanation and Analysis of Assumptions and Results of the Projections for Organic Growth Strategy - Explain the assumptions that are used in the projections. Discuss the results of the organic growth strategy along with its strengths and weaknesses. These data must be summarized in the table format provided below, which must be included and then discussed in the written analysis. 2. Explanation and Analysis of Assumptions and Results of the Projections for Merger or Acquisition Growth Strategy - Explain how the balance sheets and income statements were combined and some initial observations about the financial statements of the combined company. Explain the assumptions that are used in the projections. Discuss the results of the 1 merger/acquisition growth strategy along with its strengths and weaknesses. These data must be summarized in the table format provided below and then discussed in the written analysis. 3. Examination and Discussion of Comparison of Results of the Growth Strategies - Compare and discuss the two growth strategies. This analysis should include an examination of the comparative strengths and weaknesses of the strategies. This analysis must include data that compare a number of indicators of performance (e.g., ratios, revenues, costs, profitability, growth, etc.) These data must be presented in a table showing a comparison of the results of the two forecasts. The data in the tables are then to be discussed in the written analysis. Preparing a table comparing the resulting ratios is a good method to make the comparisons. 4. Recommendation and Justification of Most Appropriate Growth Strategy - Recommend and justify which growth strategy is most appropriate for the company. Writing Instructions The discussion portion of the analysis should be three to five pages in length, double spaced, and should employ APA style and format for reference citations. Supporting data (e.g., figures, tables, etc.) and references should be submitted limited to four separate attachments in an appendix after the written portion of the paper. The paper should begin with a short introduction and then proceed to examine the four topics outlined in the previous section. The subheadings used in the paper must be: 1. Introduction 2. Explanation and Analysis of Assumptions and Results of eVal Projections for Organic Growth Strategy 3. Explanation and Analysis of Assumptions and Results of eVal Projections for Merger or Acquisition Growth Strategy 4. Examination and Discussion of Comparison of Results of the Growth Strategies 5. Recommendation and Justification of Most Appropriate Growth Strategy Evaluation: 12.5% of final course grade. Completeness of analysis: The analysis must demonstrate a solid understanding organic growth and growth by merger and acquisitions. All assumptions used in preparing the projections for the project need to be thoroughly explained. Organization: The paper should be well-organized and follow a logical pattern of analysis and discussion. Presentation: Papers should meet professional business standards and meet APA formatting requirements. Spelling, punctuation, and grammar: There should be few errors in grammar and punctuation. All sentences must be complete and well-structured. 2 Submission and Format: The completed paper is to be submitted to the \"Gradebook\" location designated for the assignment. The paper must be in Word format otherwise no credit is earned for the assignment. The two projection models (organic growth and merger/acquisition) must also be submitted. The paper is also to be submitted to the Online Classroom. This will allow students to examine and discuss the various projects. Required Submissions: The required submissions include the written report, the two Excel projection model files, and the Excel summary of the forecasting assumptions. Assignment 4 - Suggestions for Preparing the Financial Forecasts Assignment 4 requires the preparation of two separate financial forecasts, one for the Organic Growth Strategy, the other for the Merger/Acquisition Strategy. Either the eVal Excel Forecasting Model of the Prof. Stevens Excel Financial Forecasting Model can be used for the forecasts. Using eVal Excel Financial Forecasting Model - Suggestions Organic Growth Strategy Forecast The Organic Growth Strategy forecast should reflect the anticipated performance of the company if it implements the strategy that you have developed. Your assumptions should be developed using the \"eVal Assumptions for Organic Growth & Merger / Acquisition Strategies\" Excel worksheet that is provided with the Assignment 4 materials in the online classroom. These assumptions then need to be entered into the \"Forecasting Assumptions\" section of the eVal Financial Forecasting Model. The eVal model will then prepare the Organic Growth Strategy forecast and the output will be reflected in the various eVal worksheets. This step can be done by updating the eVal model that you prepared for Assignment 1. Alternatively, you can start with a fresh eVal model (download from the online classroom). Merger & Acquisition Strategy Forecast The Merger & Acquisition Strategy forecast should reflect the anticipated performance of the company after it acquires (or merges with) another firm. The first step in preparing this forecast is to adjust the existing financial statements (balance sheet and Income statement) to reflect the most recent annual performance of the company. Essentially, this means that it is necessary to combine (add together) and enter into eVal the combined balance sheet and income statement data of the company as it would appear following the acquisition or merger. This adjustment is completed in the \"Financial Statements\" worksheet in the eVal model (go to the \"Financial Statements\" workbook and scroll down to the bottom of the worksheet and locate the \"Raw Data Inputs\" section). It is only necessary to update the most recent balance sheet and income statement data (the last column of data) in the \"Raw Data Inputs\" section of the worksheet. 3 The second step is to return to the Excel input sheet (\"eVal Assumptions for Organic Growth & Merger / Acquisition Strategies\") that was prepared for the Organic Growth Strategy (see above). Then, proceed to record and explain your forecasting assumptions for the combined company following the merger or acquisition. These assumptions then need to be entered into the \"Forecasting Assumptions\" section of the eVal Financial Forecasting Model. The eVal model will then prepare the Organic Growth Strategy forecast and the output will be reflected in the various eVal worksheets. Using Prof. Stevens Excel Financial Forecasting Model - Suggestions Organic Growth Strategy Forecast The Organic Growth Strategy forecast should reflect the anticipated performance of the company if it implements the strategy that you have developed. Your assumptions should be developed using the \"Assumptions for Prof. Stevens Financial Projection Model\" Excel worksheet (Forecast Organic Growth column) that is provided with the Assignment 4 materials in the online classroom. These assumptions then need to be entered into the \"Forecast Organic Growth - % of Current Sales or Assets\" column of the \"Inputs\" worksheet (first worksheet) of the Prof. Stevens Financial Projection Model. The \"Next Year Forecast\" data need to be inserted in the \"Additional Inputs\" section of the second worksheet in the model (at the bottom of the \"Inputs & Projections\" worksheet). The Excel model will then prepare the Organic Growth Strategy forecast and the output will be reflected in the various worksheets of the model. This step can be done most efficiently by updating the Prof. Stevens Financial Projection Model that you prepared for Assignment 1. Alternatively, you can start with a fresh copy of the model (download from the online classroom), which will require reentering the financial statement data. Merger & Acquisition Strategy Forecast The Merger & Acquisition Strategy forecast should reflect the anticipated performance of the company after it acquires (or merges with) another firm. To prepare this forecast it is necessary to adjust the existing financial statements (balance sheet and Income statement) to reflect the most recent annual performance of the combined company. Essentially, this means that it is necessary to combine (add together) and enter into the Prof. Stevens Financial Projection Model the combined balance sheet and income statement data of the company as it would appear following the acquisition or merger. This adjustment is completed in the \"Income Statement\" and \"Balance Sheet\" sections of the \"Inputs\" worksheet (the first worksheet in the model). Make sure that the balance sheet balances (the worksheet tests for balance in a calculation at the bottom of the worksheet). Your assumptions for this forecast should be developed using the \"Assumptions for Prof. Stevens Financial Projection Model\" Excel worksheet (Forecast Merger/Acquisition\" column) that is provided with the Assignment 4 materials in the online classroom. Proceed to locate the column headed \"Forecast Merger/Acquisition\" (the second column). These assumptions then need to be entered into the \"Forecast Organic Growth - % of Current Sales or Assets\" column of the \"Inputs\" worksheet (first worksheet) of the Prof. Stevens Financial Projection Model. The \"Next Year Forecast\" data need to be inserted in the \"Additional Inputs\" section of the second worksheet in the model (at the bottom of the \"Inputs & Projections\" worksheet). The Excel 4 model will then prepare the Organic Growth Strategy forecast and the output will be reflected in the various worksheets of the model. 5 GRADING RUBRIC FOR GROWTH ANALYSIS - ORGANIC 6 & MERGER/ACQUISITIO N Student: Description of Evaluation Failing, undeserving of credit Passing, but below standard Satisfactory, meets essential requirements Superior Work and clearly above average Work of Distinction B-, B, B+ A-, A, A+ Related Grade F D-, D, D+ C-, C, C+ Category Input Grad e Required Topics 1. Introduction Provide a brief overview of the assignment and include a preview of the contents of the report. 2. Explanation and Analysis of Assumptions and Results of eVal Projections for Organic Growth Strategy - Explain the assumptions that are used in the projections. Discuss the results of the organic growth strategy along with its strengths and weaknesses. 3. Explanation and Analysis of Assumptions and Results of eVal Projections for Merger or Acquisition Growth Strategy Explain the assumptions that are used in the projections. Discuss the results of the merger/acquisitio n growth strategy along with its strengths and weaknesses. Introduction is not presented or undeserving of credit. Only a superficial effort to develop the introduction. Virtually no effort to explain the variables used in the organic growth projections or results of the analysis; or, section not completed. Marginally passing development and presentation of the description of the variables used in the organic growth strategy and the results. May be some significant weaknesses in the overall description and related financial data. Virtually no effort to explain the variables used in the merger/ acquisition growth projections or results of the analysis; or, section not completed. Marginally passing development and presentation of the description of the variables used in the merger/ acquisition growth strategy and the results. May be some significant weaknesses in the overall description and related financial data. Po s Satisfactory presentation of the introduction. Superior presentation of the introduction and clearly above average. Distinctive and very thorough presentation of this first section. A+ 98 Satisfactory development and presentation of the description of the variables used in the organic growth analysis and the results. Superior development and presentation of the description of the variables used in the organic growth analysis and the results. The analysis is understandable and the cash flows seem to be relatively realistic. Distinctive development and presentation of the description of the variables used in the organic growth analysis and the results. The assumptions and the cash flows are clear, realistic, and understandable . A+ 98 Satisfactory development and presentation of the description of the variables used in the merger/ acquisition growth strategy and the results. Superior development and presentation of the description of the variables used in the merger/ acquisition growth strategy and the results. The analysis is understandable and the cash flows seem to be relatively realistic. Distinctive development and presentation of the description of the variables used in the merger/ acquisition growth strategy and the results. The assumptions and the cash flows are clear, realistic, and understandable . A+ 98 7 Virtually no effort to develop a strengths and weaknesses analysis of the two growth strategies; or, section not completed. Marginally passing development and presentation of the strengths and weaknesses of the two growth strategies. May be some significant weaknesses in the overall description and interpretation of the financial data and results. 5. Recommendation and Justification of Most Appropriate Growth Strategy - Recommend and justify which growth strategy is most appropriate for the company. Virtually no effort to develop and support an appropriate recommendatio n; or, section not completed. Marginally passing development and presentation of a recommendatio n and supporting justifications. May be some significant weaknesses in the overall description and interpretation of the financial data and results. 6. Writing, Grammar, Spelling, & Presentation Logical and Smooth Flowing Transitions and Relationships Among Sections of the Written Report. Avoidance of Personal Pronouns; Avoidance of Referring to Company as They, Their, or Them; etc. Appropriate use of reference citations. Paper is poorly written and presented; not worthy of a passing evaluation. May have failed to use appropriate subheadings for the assignment. Passing written presentation; may have major weaknesses. 4. Examination and Discussion of Comparison of Results of the Growth Strategies - Compare and discuss the two growth strategies. This analysis should include an examination of the comparative strengths and weaknesses of the strategies. Satisfactory development and presentation of the strengths and weaknesses of the two growth strategies. May be some weaknesses in the description of the data and interpretation of the results. Superior development and presentation of the description of the strengths and weaknesses of the two growth strategies. The analysis is understandable and the results seem to be relatively realistic. Distinctive development and presentation of the strengths and weaknesses of the two growth strategies. The assumptions and results are clear, realistic, and understandable . A+ 98 Satisfactory development and presentation of a recommendation along with supporting justifications. May be some weaknesses in the description of the data and interpretation of the results. Superior development and presentation of a recommendatio n along with supporting justifications. The analysis is understandable and the results seem to be relatively realistic. Distinctive development and presentation of a recommendatio n along with supporting justifications. The assumptions and results are clear, realistic, and understandable . A+ 98 Satisfactorily written presentation with some weaknesses. Superior written presentation with very limited minor weaknesses, omissions, etc. Distinctively written presentation with no obvious weaknesses. A+ 98 8 Table 1 eVal Assumptions for Financial Forecast Using eVal Company Name McCormick & Co., Inc. Current Year Forecast 2.9% 57.3% 1.5% 25.0% 3.1% 3.9% 2.9% 57.3% 1.5% 25.0% 3.1% 3.9% 0.6% 25.0% -19.3% 0.0% 0.0% 0.0% 0.6% 25.0% -19.3% 0.0% 0.0% 0.0% 2.0% 11.6% 29.4% 2.9% 15.3% 0.0% -18.4% 2.0% 11.6% 29.4% 2.9% 15.3% 0.0% -18.4% 14.2% 6.3% 48.4% 1.7% 14.2% 6.3% 48.4% 1.7% 8.5% 2.5% 8.5% 2.5% 6.1% 23.0% 0.4% 0.0% 43.9% 6.1% 23.0% 0.4% 0.0% 43.9% Income Statement Assumptions Sales Growth Cost of Goods Sold/Sales R&D/Sales SG&A/Sales Dep&Amort/Avge PP&E and Intang. Net Interest Expense/Avge Net Debt Non-Operating Income/Sales Effective Tax Rate Minority Interest/After Tax Income Other Income/Sales Ext. Items & Disc. Ops./Sales Pref. Dividends/Avge Pref. Stock Balance Sheet Assumptions Working Capital Assumptions Ending Operating Cash/Sales Ending Receivables/Sales Ending Inventories/COGS Ending Other Current Assets/Sales Ending Accounts Payable/COGS Ending Taxes Payable/Sales Ending Other Current Liabs/Sales Other Operating Asset Assumptions Ending Net PP&E/Sales Ending Investments/Sales Ending Intangibles/Sales Ending Other Assets/Sales Other Operating Liability Assumptions Other Liabilities/Sales Deferred Taxes/Sales Financing Assumptions Current Debt/Total Assets Long-Term Debt/Total Assets Minority Interest/Total Assets Preferred Stock/Total Assets Dividend Payout Ratio ing eVal Explanation of Assumptions eVal Version 5.00 Russell Russell Lundholm Lundholm Richard Richard Sloan Sloan 2017, Russell Lundholm and Richard Sloan. STEPS: 1) enter financial data on the Financial Statements sheet, 2) examine the Ratio Analysis and Cash Flow Analysis, 3) enter forecasts on the Forecasting Assumptions sheet to predict future the Financial Statements, 4) enter cost of capital assumptions on the Valuation Parameters Sheet to determine the company's value, 5) evaluate the details of the resulting valuation using either the Residual Income of Discounted Cash Flow Valuations. Other Useful Links: Where to buy the latest 'Equity Valuation and Analysis' textbook Check here for updated versions of eVal Cases to accompany the textbook ash Flow Valuations. Financial Statements Company Name and Ticker Common Shares Outstanding Estimated Price/Share=$70.43 Fiscal Year End (YYYY-MM-DD) ($000s) Data can be entered manually in financial statements or as a block cut-andpaste from the Case Data Sheet to the Raw Data Input section below. Jump to Raw Data Input KOHL'S CORP KSS Link to Form 10-Ks 307,000 (in 000s at most recent fiscal year end) Actual 2006/01/31 Actual 2007/01/31 Actual 2008/01/31 Actual 2009/01/31 Actual 2010/01/31 Forecast 2011/01/31 Forecast 2012/01/31 Forecast 2013/01/31 Forecast 2014/01/31 Forecast 2015/01/31 Forecast 2016/01/31 Forecast 2017/01/31 Forecast 2018/01/31 Forecast 2019/01/31 Forecast 2020/01/31 Forecast 2021/01/31 Forecast 2022/01/31 Income Statement Sales (Net) Cost of Goods Sold Gross Profit R&D Expense SG&A Expense EBITDA Depreciation & Amortization EBIT Net Interest Expense Non-Operating Income (Loss) EBT Income Taxes Other Income (Loss) Net Income Before Ext. Items Ext. Items & Disc. Ops. Minority Interest in Earnings Preferred Dividends Net Income (available to common) 13,402,217 (8,670,484) 4,731,733 0 (3,007,842) 1,723,891 (307,710) 1,416,181 (79,383) 8,992 1,345,790 (503,830) 0 841,960 0 0 0 841,960 15,544,184 (9,890,513) 5,653,671 0 (3,451,196) 2,202,475 (387,674) 1,814,801 (74,427) 34,071 1,774,445 (665,764) 0 1,108,681 0 0 0 1,108,681 16,473,734 (10,459,549) 6,014,185 0 (3,757,563) 2,256,622 (452,145) 1,804,477 (98,712) 36,296 1,742,061 (658,210) 0 1,083,851 0 0 0 1,083,851 16,389,000 (10,334,000) 6,055,000 0 (3,978,000) 2,077,000 (541,000) 1,536,000 (140,000) 29,000 1,425,000 (540,000) 0 885,000 0 0 0 885,000 17,178,000 (10,680,000) 6,498,000 0 (4,196,000) 2,302,000 (590,000) 1,712,000 (134,000) 10,000 1,588,000 (597,000) 0 991,000 0 0 0 991,000 17,976,653 (11,176,543) 6,800,110 0 (4,391,084) 2,409,026 (604,888) 1,804,138 (137,049) 10,465 1,677,555 (630,668) 0 1,046,887 0 0 0 1,046,887 18,782,789 (11,677,738) 7,105,051 0 (4,587,995) 2,517,056 (632,501) 1,884,555 (143,305) 10,934 1,752,184 (658,724) 0 1,093,460 0 0 0 1,093,460 19,594,097 (12,182,149) 7,411,948 0 (4,786,170) 2,625,778 (660,331) 1,965,447 (149,610) 11,407 1,827,243 (686,942) 0 1,140,301 0 0 0 1,140,301 20,408,132 (12,688,255) 7,719,877 0 (4,985,011) 2,734,866 (688,298) 2,046,568 (155,947) 11,880 1,902,501 (715,235) 0 1,187,266 0 0 0 1,187,266 21,222,328 (13,194,462) 8,027,866 0 (5,183,892) 2,843,975 (716,314) 2,127,661 (162,294) 12,354 1,977,721 (743,513) 0 1,234,207 0 0 0 1,234,207 22,034,005 (13,699,102) 8,334,903 0 (5,382,157) 2,952,747 (744,289) 2,208,457 (168,633) 12,827 2,052,651 (771,683) 0 1,280,968 0 0 0 1,280,968 22,840,386 (14,200,450) 8,639,937 0 (5,579,128) 3,060,809 (772,130) 2,288,678 (174,941) 13,296 2,127,034 (799,647) 0 1,327,387 0 0 0 1,327,387 23,638,608 (14,696,725) 8,941,884 0 (5,774,106) 3,167,777 (799,740) 2,368,037 (181,196) 13,761 2,200,602 (827,304) 0 1,373,298 0 0 0 1,373,298 24,425,740 (15,186,104) 9,239,635 0 (5,966,376) 3,273,260 (827,018) 2,446,241 (187,377) 14,219 2,273,084 (854,554) 0 1,418,530 0 0 0 1,418,530 25,198,797 (15,666,733) 9,532,063 0 (6,155,207) 3,376,856 (853,864) 2,522,992 (193,459) 14,669 2,344,202 (881,290) 0 1,462,912 0 0 0 1,462,912 25,954,760 (16,136,735) 9,818,025 0 (6,339,863) 3,478,162 (880,173) 2,597,989 (199,420) 15,109 2,413,678 (907,409) 0 1,506,269 0 0 0 1,506,269 26,733,403 (16,620,838) 10,112,566 0 (6,530,059) 3,582,506 (906,578) 2,675,928 (205,402) 15,563 2,486,089 (934,632) 0 1,551,457 0 0 0 1,551,457 Operating Cash and Market. Sec. Receivables Inventories Other Current Assets Total Current Assets PP&E (Net) Investments Intangibles Other Assets Total Assets 286,916 1,652,065 2,237,568 89,503 4,266,052 4,543,832 0 221,718 121,436 9,153,038 620,400 0 2,588,099 192,541 3,401,040 5,352,974 0 228,624 58,539 9,041,177 663,671 0 2,855,733 204,485 3,723,889 6,509,819 0 219,296 107,078 10,560,082 676,000 0 2,799,000 225,000 3,700,000 6,984,000 332,000 210,000 108,000 11,334,000 2,267,000 0 2,923,000 295,000 5,485,000 7,018,000 321,000 204,000 132,000 13,160,000 2,372,399 0 3,058,898 308,715 5,740,013 7,344,286 335,924 213,485 138,137 13,771,845 2,478,786 0 3,196,070 322,559 5,997,415 7,673,630 350,988 223,058 144,332 14,389,422 2,585,855 0 3,334,122 336,492 6,256,469 8,005,086 366,149 232,693 150,566 15,010,962 2,693,284 0 3,472,638 350,471 6,516,393 8,337,657 381,360 242,360 156,821 15,634,592 2,800,735 0 3,611,181 364,454 6,776,369 8,670,293 396,575 252,029 163,078 16,258,344 2,907,852 0 3,749,295 378,393 7,035,541 9,001,901 411,743 261,668 169,315 16,880,167 3,014,271 0 3,886,509 392,241 7,293,021 9,331,344 426,811 271,245 175,511 17,497,932 3,119,614 0 4,022,334 405,949 7,547,896 9,657,454 441,727 280,724 181,645 18,109,447 3,223,492 0 4,156,272 419,466 7,799,231 9,979,034 456,436 290,072 187,693 18,712,466 3,325,514 0 4,287,815 432,742 8,046,071 10,294,863 470,882 299,252 193,634 19,304,702 3,425,279 0 4,416,449 445,724 8,287,453 10,603,709 485,009 308,230 199,443 19,883,843 3,528,037 0 4,548,943 459,096 8,536,076 10,921,820 499,559 317,477 205,426 20,480,358 Current Debt Accounts Payable Income Taxes Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Deferred Taxes Total Liabilities Minority Interest Preferred Stock Paid in Common Capital (Net) Retained Earnings Total Common Equity Total Liabilities and Equity 107,941 829,971 166,908 641,635 1,746,455 1,046,104 185,340 217,801 3,195,700 0 0 1,586,485 4,370,853 5,957,338 9,153,038 18,841 934,376 233,263 732,178 1,918,658 1,040,057 235,537 243,530 3,437,782 0 0 123,861 5,479,534 5,603,395 9,041,177 12,701 835,985 124,254 798,508 1,771,448 2,051,875 372,705 262,451 4,458,479 0 0 (461,782) 6,563,385 6,101,603 10,560,082 17,000 881,000 105,000 812,000 1,815,000 2,053,000 407,000 320,000 4,595,000 0 0 (663,000) 7,402,000 6,739,000 11,334,000 16,000 1,188,000 184,000 1,002,000 2,390,000 2,052,000 488,000 377,000 5,307,000 0 0 (550,000) 8,403,000 7,853,000 13,160,000 16,744 1,243,233 192,555 1,048,586 2,501,118 2,147,403 510,688 394,528 5,553,737 0 0 (1,231,779) 9,449,887 8,218,108 13,771,845 17,495 1,298,984 201,189 1,095,608 2,613,277 2,243,700 533,590 412,220 5,802,786 0 0 (1,956,711) 10,543,347 8,586,636 14,389,422 18,250 1,355,093 209,880 1,142,932 2,726,155 2,340,615 556,638 430,025 6,053,433 0 0 (2,726,118) 11,683,648 8,957,529 15,010,962 19,009 1,411,390 218,599 1,190,415 2,839,413 2,437,856 579,763 447,891 6,304,922 0 0 (3,541,245) 12,870,914 9,329,669 15,634,592 19,767 1,467,699 227,320 1,237,907 2,952,693 2,535,116 602,893 465,760 6,556,461 0 0 (4,403,239) 14,105,121 9,701,883 16,258,344 20,523 1,523,833 236,014 1,285,253 3,065,623 2,632,075 625,951 483,573 6,807,222 0 0 (5,313,145) 15,386,090 10,072,945 16,880,167 21,274 1,579,601 244,652 1,332,289 3,177,816 2,728,401 648,859 501,271 7,056,347 0 0 (6,271,891) 16,713,476 10,441,585 17,497,932 22,018 1,634,804 253,202 1,378,850 3,288,874 2,823,753 671,536 518,789 7,302,951 0 0 (7,280,278) 18,086,774 10,806,496 18,109,447 22,751 1,689,241 261,633 1,424,764 3,398,388 2,917,780 693,897 536,064 7,546,129 0 0 (8,338,967) 19,505,304 11,166,337 18,712,466 23,471 1,742,704 269,914 1,469,856 3,505,945 3,010,125 715,858 553,030 7,784,958 0 0 (9,448,473) 20,968,216 11,519,743 19,304,702 24,175 1,794,985 278,011 1,513,952 3,611,123 3,100,429 737,334 569,621 8,018,507 0 0 (10,609,150) 22,474,485 11,865,336 19,883,843 24,900 1,848,835 286,352 1,559,371 3,719,457 3,193,442 759,454 586,709 8,259,062 0 0 (11,804,647) 24,025,942 12,221,296 20,480,358 0 4,370,853 1,108,681 0 0 5,479,534 5,479,534 1,083,851 0 0 6,563,385 6,563,385 885,000 0 (46,385) 7,402,000 7,402,000 991,000 0 10,000 8,403,000 8,403,000 1,046,887 0 0 9,449,887 9,449,887 1,093,460 0 0 10,543,347 10,543,347 1,140,301 0 0 11,683,648 11,683,648 1,187,266 0 0 12,870,914 12,870,914 1,234,207 0 0 14,105,121 14,105,121 1,280,968 0 0 15,386,090 15,386,090 1,327,387 0 0 16,713,476 16,713,476 1,373,298 0 0 18,086,774 18,086,774 1,418,530 0 0 19,505,304 19,505,304 1,462,912 0 0 20,968,216 20,968,216 1,506,269 0 0 22,474,485 22,474,485 1,551,457 0 0 24,025,942 891,624 (49,664) 841,960 0.3744 7,111,383 1,154,045 5,957,338 1,155,183 (46,502) 1,108,681 0.3752 6,662,293 1,058,898 5,603,395 1,145,266 (61,415) 1,083,851 0.3778 8,166,179 2,064,576 6,101,603 971,947 (86,947) 885,000 0.3789 8,809,000 2,070,000 6,739,000 1,074,623 (83,623) 991,000 0.3759 9,921,000 2,068,000 7,853,000 1,132,413 (85,526) 1,046,887 0.3759 10,382,255 2,164,147 8,218,108 1,182,890 (89,430) 1,093,460 0.3759 10,847,831 2,261,195 8,586,636 1,233,666 (93,365) 1,140,301 0.3759 11,316,395 2,358,866 8,957,529 1,284,586 (97,319) 1,187,266 0.3759 11,786,534 2,456,864 9,329,669 1,335,488 (101,281) 1,234,207 0.3759 12,256,765 2,554,883 9,701,883 1,386,204 (105,236) 1,280,968 0.3759 12,725,542 2,652,598 10,072,945 1,436,560 (109,173) 1,327,387 0.3759 13,191,260 2,749,675 10,441,585 1,486,374 (113,076) 1,373,298 0.3759 13,652,266 2,845,770 10,806,496 1,535,464 (116,933) 1,418,530 0.3759 14,106,867 2,940,530 11,166,337 1,583,641 (120,729) 1,462,912 0.3759 14,553,339 3,033,596 11,519,743 1,630,718 (124,449) 1,506,269 0.3759 14,989,939 3,124,604 11,865,336 1,679,639 (128,182) 1,551,457 0.3759 15,439,638 3,218,342 12,221,296 Balance Sheet Statement of Retained Earnings Beg. Retained Earnings +Net Income -Common Dividends +/-Clean Surplus Plug (Ignore) =End. Retained Earnings Values for Dupont Analysis and Valuation Net Operating Income Net Financial Expense Net Income Effective Tax Rate Net Operating Assets Net Financial Obligations Total Common Equity Raw Data Inputs cut-and-paste raw data block from DataMaker file here Company Name and Ticker Common Shares Outstanding Fiscal Year End (YYYY-MM-DD) Sales (Net) Cost of Goods Sold R&D Expense SG&A Expense Depreciation & Amortization Interest Expense Non-Operating Income (Loss) Income Taxes Minority Interest in Earnings Other Income (Loss) Ext. Items & Disc. Ops. Preferred Dividends Operating Cash and Market. Sec. Receivables Inventories Other Current Assets PP&E (Net) Investments Intangibles Other Assets Current Debt Accounts Payable Income Taxes Payable Other Current Liabilities Long-Term Debt Other Liabilities Deferred Taxes Minority Interest Preferred Stock Paid in Common Capital (Net) Retained Earnings Common Dividends KOHL'S CORP 307,000 2006/01/31 13,402,217 (8,670,484) 0 (3,007,842) (307,710) (79,383) 8,992 (503,830) 0 0 0 0 286,916 1,652,065 2,237,568 89,503 4,543,832 0 221,718 121,436 107,941 829,971 166,908 641,635 1,046,104 185,340 217,801 0 0 1,586,485 4,370,853 0 KSS 2007/01/31 15,544,184 (9,890,513) 0 (3,451,196) (387,674) (74,427) 34,071 (665,764) 0 0 0 0 620,400 0 2,588,099 192,541 5,352,974 0 228,624 58,539 18,841 934,376 233,263 732,178 1,040,057 235,537 243,530 0 0 123,861 5,479,534 0 2008/01/31 16,473,734 (10,459,549) 0 (3,757,563) (452,145) (98,712) 36,296 (658,210) 0 0 0 0 663,671 0 2,855,733 204,485 6,509,819 0 219,296 107,078 12,701 835,985 124,254 798,508 2,051,875 372,705 262,451 0 0 (461,782) 6,563,385 0 2009/01/31 16,389,000 (10,334,000) 0 (3,978,000) (541,000) (140,000) 29,000 (540,000) 0 0 0 0 676,000 0 2,799,000 225,000 6,984,000 332,000 210,000 108,000 17,000 881,000 105,000 812,000 2,053,000 407,000 320,000 0 0 (663,000) 7,402,000 0 A Windows vs Macintosh issue can cause the fiscal year end dates to be off by roughly 4 years. If this occurs, select and copy the 1462 cell 2010/01/31 below, select the cells with the dates, choose Paste Special Values and 17,178,000 select Subtract or Add. (10,680,000) 0 1462 (4,196,000) (590,000) (134,000) 10,000 (597,000) 0 0 0 0 2,267,000 0 2,923,000 295,000 7,018,000 321,000 204,000 132,000 16,000 1,188,000 184,000 1,002,000 2,052,000 488,000 377,000 0 0 (550,000) 8,403,000 0 Ratio Analysis Company Name Fiscal Year End Date KOHL'S CORP Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 2006/01/31 2007/01/31 2008/01/31 2009/01/31 2010/01/31 2011/01/31 2012/01/31 2013/01/31 2014/01/31 2015/01/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 2021/01/31 2022/01/31 Annual Growth Rates Sales Assets Common Equity Earnings Free Cash Flow to Investors Sustainable Growth Rate 16.0% -1.2% -5.9% 31.7% 6.0% 16.8% 8.9% -2.2% -122.4% 18.5% -0.5% 7.3% 10.4% -18.3% #N/A 13.8% 4.8% 16.1% 16.5% 12.0% -109.7% 13.6% 4.6% 4.6% 4.6% 5.6% #N/A 13.0% 4.5% 4.5% 4.5% 4.4% 6.9% 13.0% 4.3% 4.3% 4.3% 4.3% 6.7% 13.0% 4.2% 4.2% 4.2% 4.1% 6.4% 13.0% 4.0% 4.0% 4.0% 4.0% 6.2% 13.0% 3.8% 3.8% 3.8% 3.8% 6.0% 13.0% 3.7% 3.7% 3.7% 3.6% 5.8% 12.9% 3.5% 3.5% 3.5% 3.5% 5.6% 12.9% 3.3% 3.3% 3.3% 3.3% 5.4% 12.9% 3.2% 3.2% 3.2% 3.1% 5.2% 12.9% 3.0% 3.0% 3.0% 3.0% 5.0% 12.9% 3.0% 3.0% 3.0% 3.0% 3.0% 12.9% 0.192 0.188 0.168 0.185 0.181 0.154 0.138 0.135 0.115 0.136 0.135 0.115 0.130 0.129 0.112 0.130 0.129 0.111 0.130 0.129 0.111 0.130 0.129 0.111 0.130 0.129 0.111 0.130 0.129 0.111 0.129 0.129 0.111 0.129 0.128 0.111 0.129 0.128 0.111 0.129 0.128 0.111 0.129 0.128 0.110 0.129 0.128 0.110 0.063 0.071 1.709 1.574 0.192 0.066 1.681 1.675 0.185 0.054 1.497 1.705 0.138 0.058 1.403 1.679 0.136 0.058 1.335 1.676 0.130 0.058 1.334 1.676 0.130 0.058 1.333 1.676 0.130 0.058 1.332 1.676 0.130 0.058 1.331 1.676 0.130 0.058 1.330 1.676 0.130 0.058 1.329 1.676 0.129 0.058 1.328 1.676 0.129 0.058 1.327 1.676 0.129 0.058 1.326 1.676 0.129 0.058 1.325 1.676 0.129 0.058 1.325 1.676 0.129 0.067 0.074 2.257 0.168 0.042 0.126 0.191 0.192 0.070 2.222 0.154 0.039 0.115 0.267 0.185 0.059 1.931 0.115 0.042 0.072 0.322 0.138 0.063 1.834 0.115 0.040 0.074 0.284 0.136 0.063 1.771 0.112 0.040 0.071 0.263 0.130 0.063 1.769 0.111 0.040 0.071 0.263 0.130 0.063 1.768 0.111 0.040 0.071 0.263 0.130 0.063 1.767 0.111 0.040 0.071 0.263 0.130 0.063 1.765 0.111 0.040 0.071 0.263 0.130 0.063 1.764 0.111 0.040 0.071 0.263 0.130 0.063 1.763 0.111 0.040 0.070 0.263 0.129 0.063 1.761 0.111 0.040 0.070 0.263 0.129 0.063 1.760 0.111 0.040 0.070 0.263 0.129 0.063 1.758 0.111 0.040 0.070 0.263 0.129 0.063 1.757 0.110 0.040 0.070 0.263 0.129 0.063 1.757 0.110 0.040 0.070 0.263 0.129 0.353 0.129 0.106 0.066 0.067 0.364 0.142 0.117 0.073 0.074 0.365 0.137 0.110 0.068 0.070 0.369 0.127 0.094 0.058 0.059 0.378 0.134 0.100 0.062 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.063 0.063 0.378 0.134 0.100 0.062 0.063 0.378 0.134 0.100 0.062 0.063 0.378 0.134 0.100 0.062 0.063 0.378 0.134 0.100 0.062 0.063 2.257 7.530 19.396 89.043 31.441 3.141 2.222 9.505 0.000 94.985 30.119 2.777 1.931 8.476 0.000 99.863 30.490 2.429 1.834 6.853 0.000 97.778 34.949 2.454 1.771 5.647 0.000 97.677 39.222 2.503 1.769 5.643 0.000 97.753 39.269 2.501 1.768 5.638 0.000 97.828 39.315 2.499 1.767 5.634 0.000 97.904 39.362 2.498 1.765 5.630 0.000 97.980 39.408 2.496 1.764 5.625 0.000 98.057 39.456 2.494 1.763 5.621 0.000 98.133 39.503 2.492 1.761 5.617 0.000 98.210 39.550 2.490 1.760 5.612 0.000 98.287 39.598 2.488 1.758 5.608 0.000 98.364 39.645 2.486 1.757 5.603 0.000 98.442 39.693 2.484 1.757 5.603 0.000 98.442 39.693 2.484 0.194 0.189 1.421 2.740 0.338 1.083 0.814 0.307 0.734 0.771 0.263 0.831 1.015 0.263 0.800 0.781 0.263 0.798 0.780 0.263 0.797 0.780 0.263 0.796 0.779 0.263 0.795 0.779 0.263 0.794 0.778 0.263 0.792 0.778 0.263 0.791 0.777 0.263 0.790 0.776 0.263 0.789 0.776 0.263 0.787 0.775 0.263 0.787 0.775 2.443 1.110 17.840 21.716 1.773 0.323 24.384 29.592 2.102 0.375 18.280 22.861 2.039 0.372 10.971 14.836 2.295 0.949 12.776 17.179 2.295 0.949 13.164 17.578 2.295 0.949 13.151 17.564 2.295 0.949 13.137 17.551 2.295 0.949 13.124 17.537 2.295 0.949 13.110 17.524 2.295 0.949 13.096 17.510 2.295 0.949 13.083 17.496 2.295 0.949 13.069 17.483 2.295 0.949 13.055 17.469 2.295 0.949 13.041 17.455 2.295 0.949 13.028 17.441 2.295 0.949 13.028 17.441 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Profitability Return on Equity Return on Equity (b4 non-recurring) Return on Net Operating Assets Basic Dupont Model Net Profit Margin x Total Asset Turnover x Total Leverage = Return on Equity Advanced Dupont Model Net Operating Margin x Net Operating Asset Turnover = Return on Net Operating Assets Net Borrowing Cost (NBC) Spread (RNOA - NBC) Financial Leverage (LEV) ROE = RNOA + LEV*Spread Margin Analysis Gross Margin EBITDA Margin EBIT Margin Net Operating Margin (b4 non-rec.) Net Operating Margin Turnover Analysis Net Operating Asset Turnover Net Working Capital Turnover Avge Days to Collect Receivables Avge Inventory Holding Period Avge Days to Pay Payables PP&E Turnover Analysis of Leverage - Long-Term Capital Structure Debt to Equity Ratio FFO to Total Debt CFO to Total Debt Analysis of Leverage - Short-Term Liquidity Current Ratio Quick Ratio EBIT Interest Coverage EBITDA Interest Coverage Fiscal Year Cash Flow Analysis ($000) Company Name KOHL'S CORP Fiscal Year End Date Pro Forma Statement of Cash Flows Operating: Net Income +Depreciation & Amortization +Increase in Deferred Taxes +Increase in Other Liabilities +Minority Interest in Earnings +Preferred Dividends =Funds From Operations -Increase in Receivables -Increase in Inventory -Increase in Other Current Assets +Increase in Accounts Payable +Increase in Taxes Payable +Increase in Other Curr. Liabilities =Cash From Operations Actual 2007/01/31 Actual 2008/01/31 Actual 2009/01/31 Actual 2010/01/31 Forecast 2011/01/31 Forecast 2012/01/31 Forecast 2013/01/31 Forecast 2014/01/31 Forecast 2015/01/31 Forecast 2016/01/31 Forecast 2017/01/31 Forecast 2018/01/31 Forecast 2019/01/31 Forecast 2020/01/31 Forecast 2021/01/31 1,108,681 387,674 25,729 50,197 0 0 1,572,281 1,652,065 (350,531) (103,038) 104,405 66,355 90,543 3,032,080 1,083,851 452,145 18,921 137,168 0 0 1,692,085 0 (267,634) (11,944) (98,391) (109,009) 66,330 1,271,437 885,000 541,000 57,549 34,295 0 0 1,517,844 0 56,733 (20,515) 45,015 (19,254) 13,492 1,593,315 991,000 590,000 57,000 81,000 0 0 1,719,000 0 (124,000) (70,000) 307,000 79,000 190,000 2,101,000 1,046,887 604,888 17,528 22,688 0 0 1,691,991 0 (135,898) (13,715) 55,233 8,555 46,586 1,652,751 1,093,460 632,501 17,692 22,901 0 0 1,766,554 0 (137,172) (13,844) 55,751 8,635 47,022 1,726,946 1,140,301 660,331 17,806 23,048 0 0 1,841,485 0 (138,052) (13,933) 56,109 8,690 47,324 1,801,624 1,187,266 688,298 17,865 23,125 0 0 1,916,555 0 (138,516) (13,980) 56,297 8,719 47,483 1,876,559 1,234,207 716,314 17,869 23,130 0 0 1,991,520 0 (138,543) (13,982) 56,308 8,721 47,492 1,951,517 1,280,968 744,289 17,814 23,058 0 0 2,066,130 0 (138,115) (13,939) 56,134 8,694 47,345 2,026,250 1,327,387 772,130 17,697 22,908 0 0 2,140,123 0 (137,213) (13,848) 55,768 8,637 47,037 2,100,503 1,373,298 799,740 17,518 22,676 0 0 2,213,232 0 (135,825) (13,708) 55,204 8,550 46,561 2,174,013 1,418,530 827,018 17,275 22,361 0 0 2,285,185 0 (133,938) (13,518) 54,437 8,431 45,914 2,246,511 1,462,912 853,864 16,966 21,961 0 0 2,355,703 0 (131,543) (13,276) 53,463 8,281 45,093 2,317,721 1,506,269 880,173 16,591 21,476 0 0 2,424,508 0 (128,634) (12,982) 52,281 8,097 44,096 2,387,366 Investing: -Capital Expenditures -Increase in Investments -Purchases of Intangibles -Increase in Other Assets =Cash From Investing (1,196,816) 0 (6,906) 62,897 (1,140,825) (1,608,990) 0 9,328 (48,539) (1,648,201) (1,015,181) (332,000) 9,296 (922) (1,338,807) (624,000) 11,000 6,000 (24,000) (631,000) (931,174) (14,924) (9,485) (6,137) (961,720) (961,844) (15,064) (9,573) (6,195) (992,676) (991,788) (15,161) (9,635) (6,234) (1,022,817) (1,020,868) (15,212) (9,667) (6,255) (1,052,003) (1,048,950) (15,215) (9,669) (6,256) (1,080,090) (1,075,897) (15,168) (9,639) (6,237) (1,106,941) (1,101,574) (15,069) (9,576) (6,196) (1,132,415) (1,125,850) (14,916) (9,479) (6,134) (1,156,380) (1,148,598) (14,709) (9,348) (6,049) (1,178,703) (1,169,693) (14,446) (9,181) (5,940) (1,199,260) (1,189,019) (14,126) (8,978) (5,809) (1,217,932) Financing: +Increase in Debt -Dividends Paid to Minority Interest -Dividends Paid on Preferred +Increase in Pref. Stock -Dividends Paid on Common +/-Net Issuance of Common Stock +/-Clean Surplus Plug (Ignore) =Cash From Financing (95,147) 0 0 0 0 (1,462,624) 0 (1,557,771) 1,005,678 0 0 0 0 (585,643) 0 420,035 5,424 0 0 0 0 (201,218) (46,385) (242,179) (2,000) 0 0 0 0 113,000 10,000 121,000 96,147 0 0 0 0 (681,779) 0 (585,632) 97,048 0 0 0 0 (724,931) 0 (627,883) 97,671 0 0 0 0 (769,408) 0 (671,737) 97,999 0 0 0 0 (815,126) 0 (717,127) 98,018 0 0 0 0 (861,994) 0 (763,976) 97,715 0 0 0 0 (909,906) 0 (812,191) 97,077 0 0 0 0 (958,746) 0 (861,669) 96,095 0 0 0 0 (1,008,387) 0 (912,292) 94,760 0 0 0 0 (1,058,690) 0 (963,930) 93,066 0 0 0 0 (1,109,506) 0 (1,016,440) 91,008 0 0 0 0 (1,160,677) 0 (1,069,669) 333,484 286,916 620,400 43,271 620,400 663,671 12,329 663,671 676,000 1,591,000 676,000 2,267,000 105,399 2,267,000 2,372,399 106,387 2,372,399 2,478,786 107,069 2,478,786 2,585,855 107,429 2,585,855 2,693,284 107,450 2,693,284 2,800,735 107,118 2,800,735 2,907,852 106,419 2,907,852 3,014,271 105,342 3,014,271 3,119,614 103,879 3,119,614 3,223,492 102,021 3,223,492 3,325,514 99,765 3,325,514 3,425,279 Net Change in Cash + Beginning Cash Balance = Ending Cash Balance Free Cash Flow to Common Equity Net Income - Increase in Common Equity +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Common Equity 1,108,681 353,943 0 1,462,624 1,083,851 (498,208) 0 585,643 885,000 (637,397) (46,385) 201,218 991,000 (1,114,000) 10,000 (113,000) 1,046,887 (365,108) 0 681,779 1,093,460 (368,529) 0 724,931 1,140,301 (370,893) 0 769,408 1,187,266 (372,140) 0 815,126 1,234,207 (372,213) 0 861,994 1,280,968 (371,062) 0 909,906 1,327,387 (368,641) 0 958,746 1,373,298 (364,911) 0 1,008,387 1,418,530 (359,841) 0 1,058,690 1,462,912 (353,406) 0 1,109,506 1,506,269 (345,592) 0 1,160,677 Computation based on SCF: +Cash From Operations -Increase in Cash +Cash From Investing +Increase in Debt -Dividends Paid to Minority Interest -Dividends Paid on Preferred +Increase in Preferred Stock +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Common Equity 3,032,080 (333,484) (1,140,825) (95,147) 0 0 0 0 1,462,624 1,271,437 (43,271) (1,648,201) 1,005,678 0 0 0 0 585,643 1,593,315 (12,329) (1,338,807) 5,424 0 0 0 (46,385) 201,218 2,101,000 (1,591,000) (631,000) (2,000) 0 0 0 10,000 (113,000) 1,652,751 (105,399) (961,720) 96,147 0 0 0 0 681,779 1,726,946 (106,387) (992,676) 97,048 0 0 0 0 724,931 1,801,624 (107,069) (1,022,817) 97,671 0 0 0 0 769,408 1,876,559 (107,429) (1,052,003) 97,999 0 0 0 0 815,126 1,951,517 (107,450) (1,080,090) 98,018 0 0 0 0 861,994 2,026,250 (107,118) (1,106,941) 97,715 0 0 0 0 909,906 2,100,503 (106,419) (1,132,415) 97,077 0 0 0 0 958,746 2,174,013 (105,342) (1,156,380) 96,095 0 0 0 0 1,008,387 2,246,511 (103,879) (1,178,703) 94,760 0 0 0 0 1,058,690 2,317,721 (102,021) (1,199,260) 93,066 0 0 0 0 1,109,506 2,387,366 (99,765) (1,217,932) 91,008 0 0 0 0 1,160,677 Financing Flows: +Dividends Paid -Net Issuance of Common Stock = Free Cash Flow to Common Equity 0 1,462,624 1,462,624 0 585,643 585,643 0 201,218 201,218 0 (113,000) (113,000) 0 681,779 681,779 0 724,931 724,931 0 769,408 769,408 0 815,126 815,126 0 861,994 861,994 0 909,906 909,906 0 958,746 958,746 0 1,008,387 1,008,387 0 1,058,690 1,058,690 0 1,109,506 1,109,506 0 1,160,677 1,160,677 1,155,183 449,090 0 1,604,273 1,145,266 (1,503,886) 0 (358,620) 971,947 (642,821) (46,385) 282,741 1,074,623 (1,112,000) 10,000 (27,377) 1,132,413 (461,255) 0 671,158 1,182,890 (465,577) 0 717,314 1,233,666 (468,564) 0 765,102 1,284,586 (470,139) 0 814,447 1,335,488 (470,232) 0 865,257 1,386,204 (468,777) 0 917,427 1,436,560 (465,718) 0 970,842 1,486,374 (461,006) 0 1,025,368 1,535,464 (454,601) 0 1,080,863 1,583,641 (446,472) 0 1,137,169 1,630,718 (436,600) 0 1,194,118 3,032,080 (333,484) (1,140,825) 74,427 (27,925) 0 1,604,273 1,271,437 (43,271) (1,648,201) 98,712 (37,297) 0 (358,620) 1,593,315 (12,329) (1,338,807) 140,000 (53,053) (46,385) 282,741 2,101,000 (1,591,000) (631,000) 134,000 (50,377) 10,000 (27,377) 1,652,751 (105,399) (961,720) 137,049 (51,523) 0 671,158 1,726,946 (106,387) (992,676) 143,305 (53,875) 0 717,314 1,801,624 (107,069) (1,022,817) 149,610 (56,245) 0 765,102 1,876,559 (107,429) (1,052,003) 155,947 (58,627) 0 814,447 1,951,517 (107,450) (1,080,090) 162,294 (61,014) 0 865,257 2,026,250 (107,118) (1,106,941) 168,633 (63,397) 0 917,427 2,100,503 (106,419) (1,132,415) 174,941 (65,768) 0 970,842 2,174,013 (105,342) (1,156,380) 181,196 (68,120) 0 1,025,368 2,246,511 (103,879) (1,178,703) 187,377 (70,443) 0 1,080,863 2,317,721 (102,021) (1,199,260) 193,459 (72,730) 0 1,137,169 2,387,366 (99,765) (1,217,932) 199,420 (74,971) 0 1,194,118 0 74,427 (27,925) 0 0 1,462,624 95,147 0 1,604,273 0 98,712 (37,297) 0 0 585,643 (1,005,678) 0 (358,620) 0 140,000 (53,053) 0 0 201,218 (5,424) 0 282,741 0 134,000 (50,377) 0 0 (113,000) 2,000 0 (27,377) 0 137,049 (51,523) 0 0 681,779 (96,147) 0 671,158 0 143,305 (53,875) 0 0 724,931 (97,048) 0 717,314 0 149,610 (56,245) 0 0 769,408 (97,671) 0 765,102 0 155,947 (58,627) 0 0 815,126 (97,999) 0 814,447 0 162,294 (61,014) 0 0 861,994 (98,018) 0 865,257 0 168,633 (63,397) 0 0 909,906 (97,715) 0 917,427 0 174,941 (65,768) 0 0 958,746 (97,077) 0 970,842 0 181,196 (68,120) 0 0 1,008,387 (96,095) 0 1,025,368 0 187,377 (70,443) 0 0 1,058,690 (94,760) 0 1,080,863 0 193,459 (72,730) 0 0 1,109,506 (93,066) 0 1,137,169 0 199,420 (74,971) 0 0 1,160,677 (91,008) 0 1,194,118 1,814,801 (693,689) 25,729 1,146,841 387,674 34,071 0 0 1,568,586 1,126,315 (1,196,816) 0 (6,906) 62,897 50,197 0 1,604,273 1,804,477 (695,507) 18,921 1,127,891 452,145 36,296 0 0 1,616,332 (463,919) (1,608,990) 0 9,328 (48,539) 137,168 0 (358,620) 1,536,000 (593,053) 57,549 1,000,496 541,000 29,000 0 0 1,570,496 63,142 (1,015,181) (332,000) 9,296 (922) 34,295 (46,385) 282,741 1,712,000 (647,377) 57,000 1,121,623 590,000 10,000 0 0 1,721,623 (1,209,000) (624,000) 11,000 6,000 (24,000) 81,000 10,000 (27,377) 1,804,138 (682,190) 17,528 1,139,476 604,888 10,465 0 0 1,754,829 (144,639) (931,174) (14,924) (9,485) (6,137) 22,688 0 671,158 1,884,555 (712,599) 17,692 1,189,648 632,501 10,934 0 0 1,833,083 (145,994) (961,844) (15,064) (9,573) (6,195) 22,901 0 717,314 1,965,447 (743,187) 17,806 1,240,065 660,331 11,407 0 0 1,911,803 (146,931) (991,788) (15,161) (9,635) (6,234) 23,048 0 765,102 2,046,568 (773,862) 17,865 1,290,571 688,298 11,880 0 0 1,990,749 (147,425) (1,020,868) (15,212) (9,667) (6,255) 23,125 0 814,447 2,127,661 (804,527) 17,869 1,341,003 716,314 12,354 0 0 2,069,671 (147,454) (1,048,950) (15,215) (9,669) (6,256) 23,130 0 865,257 2,208,457 (835,080) 17,814 1,391,191 744,289 12,827 0 0 2,148,307 (146,998) (1,075,897) (15,168) (9,639) (6,237) 23,058 0 917,427 2,288,678 (865,415) 17,697 1,440,961 772,130 13,296 0 0 2,226,387 (146,039) (1,101,574) (15,069) (9,576) (6,196) 22,908 0 970,842 2,368,037 (895,424) 17,518 1,490,131 799,740 13,761 0 0 2,303,632 (144,561) (1,125,850) (14,916) (9,479) (6,134) 22,676 0 1,025,368 2,446,241 (924,997) 17,275 1,538,519 827,018 14,219 0 0 2,379,757 (142,552) (1,148,598) (14,709) (9,348) (6,049) 22,361 0 1,080,863 2,522,992 (954,020) 16,966 1,585,938 853,864 14,669 0 0 2,454,471 (140,004) (1,169,693) (14,446) (9,181) (5,940) 21,961 0 1,137,169 2,597,989 (982,380) 16,591 1,632,200 880,173 15,109 0 0 2,527,482 (136,908) (1,189,019) (14,126) (8,978) (5,809) 21,476 0 1,194,118 Free Cash Flow to all Investors Net Operating Income - Increase in Net Operating Assets +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Computation based on SCF: Cash From Operations -Increase in Operating Cash +Cash from Investing +Interest Expense -Tax Shield on Interest +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Financing Flows: +Dividends on Common Stock +Interest Expense -Tax Shield on Interest +Dividends on Preferred Stock +Dividends Paid to Minority Interest -Net Issuance of Common Stock -Net Issuance of Debt -Net Issuance of Preferred Stock =Free Cash Flow to Investors Traditional Computation of FCF: EBIT -Taxes on EBIT +Increase in Deferred Taxes = NOPLAT +Depreciation & Amortization +Non-Operating Income (Loss) +Other Income (Loss) +Ext. Items & Disc. Ops. =Gross Cash Flow -Increase in Working Capital -Capital Expenditures -Increase in Investments -Purchases of Intangibles -Increase in Other Assets +Increase in Other Liabilities +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Credit Analysis Company Name Fiscal Year End Date Analysis of Leverage - Long-Term Capital Structure Debt to Equity Ratio FFO to Total Debt CFO to Total Debt Analysis of Leverage - Short-Term Liquidity Current Ratio Quick Ratio EBIT Interest Coverage EBITDA Interest Coverage Analysis of Credit Risk Net Income to Total Assets implied default probability Total Liabilities to Total Assets implied default probability Quick Ratio implied default probability EBIT to Interest Expense implied default probability Inventory Holding Period implied default probability Annual Sales Growth implied default probability Average Implied Default Probability Fiscal Year KOHL'S CORP Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 2006/01/31 2007/01/31 2008/01/31 2009/01/31 2010/01/31 2011/01/31 2012/01/31 2013/01/31 2014/01/31 2015/01/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 2021/01/31 2022/01/31 0.194 0.189 1.421 2.740 0.338 1.083 0.814 0.307 0.734 0.771 0.263 0.831 1.015 0.263 0.800 0.781 0.263 0.798 0.780 0.263 0.797 0.780 0.263 0.796 0.779 0.263 0.795 0.779 0.263 0.794 0.778 0.263 0.792 0.778 0.263 0.791 0.777 0.263 0.790 0.776 0.263 0.789 0.776 0.263 0.787 0.775 0.263 0.787 0.775 2.443 1.110 17.840 21.716 1.773 0.323 24.384 29.592 2.102 0.375 18.280 22.861 2.039 0.372 10.971 14.836 2.295 0.949 12.776 17.179 2.295 0.949 13.164 17.578 2.295 0.949 13.151 17.564 2.295 0.949 13.137 17.551 2.295 0.949 13.124 17.537 2.295 0.949 13.110 17.524 2.295 0.949 13.096 17.510 2.295 0.949 13.083 17.496 2.295 0.949 13.069 17.483 2.295 0.949 13.055 17.469 2.295 0.949 13.041 17.455 2.295 0.949 13.028 17.441 2.295 0.949 13.028 17.441 0.092 2.0% 0.349 2.5% 1.110 4.0% 17.84 1.5% 94.19 5.5% 0.0% 4.2% 3.3% 0.123 2.0% 0.380 2.5% 0.323 9.0% 24.38 1.0% 95.51 5.5% 16.0% 3.2% 3.9% 0.103 2.0% 0.422 3.0% 0.375 9.0% 18.28 1.5% 99.65 5.5% 6.0% 3.0% 4.0% 0.078 2.0% 0.405 3.0% 0.372 9.0% 10.97 1.5% 98.86 5.5% -0.5% 4.2% 4.2% 0.075 2.0% 0.403 3.0% 0.949 4.2% 12.78 1.5% 99.90 5.5% 4.8% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.16 1.5% 99.90 5.5% 4.6% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.15 1.5% 99.90 5.5% 4.5% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.14 1.5% 99.90 5.5% 4.3% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.12 1.5% 99.90 5.5% 4.2% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.11 1.5% 99.90 5.5% 4.0% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.10 1.5% 99.90 5.5% 3.8% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.08 1.5% 99.90 5.5% 3.7% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.07 1.5% 99.90 5.5% 3.5% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.06 1.5% 99.90 5.5% 3.3% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.04 1.5% 99.90 5.5% 3.2% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.03 1.5% 99.90 5.5% 3.0% 3.2% 3.2% 0.076 2.0% 0.403 3.0% 0.949 4.2% 13.03 1.5% 99.90 5.5% 3.0% 3.2% 3.2% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Lookup Table of default probabilitydecile 1 min decile 2 min decile 3 min decile 4 min decile 5 min decile 6 min decile 7 min decile 8 min decile 9 min decile 10 NI to TA thresholds -0.448 -0.161 -0.049 0.001 0.022 0.038 0.056 0.079 0.118 NI to TA default rates 0.083 0.08 0.072 0.055 0.045 0.030 0.025 0.020 0.020 0.020 TL to TA thresholds 0.175 0.283 0.385 0.476 0.558 0.633 0.709 0.816 1.030 TL to TA default rates 0.02 0.022 0.025 0.030 0.035 0.045 0.055 0.070 0.090 0.100 Quick Ratio thresholds 0.382 0.522 0.809 0.994 1.200 1.470 1.890 2.530 4.550 Quick Ratio default rates 0.09 0.065 0.05 0.042 0.040 0.035 0.025 0.020 0.015 0.010 EBIT to Int thresholds -17.4 -3.6 -0.139 1.25 2.210 3.380 5.210 9.160 23.800 EBIT to Int default rates 0.075 0.09 0.085 0.070 0.050 0.030 0.021 0.018 0.015 0.010 Inv Holding thresholds 0.365 2.56 14.24 31.39 50 70.080 91.980 121.540 174.470 Inv Holding default rates 0.03 0.035 0.039 0.040 0.042 0.045 0.049 0.055 0.060 0.070 Sales Growth thresholds -0.203 -0.063 0.003 0.05 0.098 0.158 0.244 0.398 0.797 Sales Growth default rates 0.069 0.055 0.042 0.032 0.030 0.030 0.032 0.042 0.050 0.065 Forecasting Assumptions Company Name KOHL'S CORP Forecast 2019/01/31 Forecast 2020/01/31 TERMINAL YEAR Forecast 2021/01/31 Estimated Price/Share=$70.43 Fiscal Year End Date Actual 2006/01/31 Implied Return on Equity Income Statement Assumptions Sales Growth Cost of Goods Sold/Sales R&D/Sales SG&A/Sales Dep&Amort/Avge PP&E and Intang. Net Interest Expense/Avge Net Debt Non-Operating Income/Sales Effective Tax Rate Minority Interest/After Tax Income Other Income/Sales Ext. Items & Disc. Ops./Sales Pref. Dividends/Avge Pref. Stock Balance Sheet Assumptions Working Capital Assumptions Ending Operating Cash/Sales Ending Receivables/Sales Ending Inventories/COGS Ending Other Current Assets/Sales Ending Accounts Payable/COGS Ending Taxes Payable/Sales Ending Other Current Liabs/Sales Other Operating Asset Assumptions Ending Net PP&E/Sales Ending Investments/Sales Ending Intangibles/Sales Ending Other Assets/Sales Other Operating Liability Assumptions Other Liabilities/Sales Deferred Taxes/Sales Financing Assumptions Current Debt/Total Assets Long-Term Debt/Total Assets Minority Interest/Total Assets Preferred Stock/Total Assets Dividend Payout Ratio Actual 2007/01/31 Actual Actual 2008/01/31 2009/01/31 Actual 2010/01/31 Forecast Forecast 2011/01/31 2012/01/31 Forecast 2013/01/31 Forecast Forecast 2014/01/31 2015/01/31 Forecast 2016/01/31 Forecast Forecast 2017/01/31 2018/01/31 0.192 0.185 0.138 0.136 0.130 0.130 0.130 0.130 0.130 0.130 0.129 0.129 0.129 0.129 0.129 16.0% 63.6% 0.0% 22.2% 7.5% 6.7% 0.2% 37.5% 0.0% 0.0% 0.0% 0.0% 6.0% 63.5% 0.0% 22.8% 7.3% 6.3% 0.2% 37.8% 0.0% 0.0% 0.0% 0.0% -0.5% 63.1% 0.0% 24.3% 7.8% 6.8% 0.2% 37.9% 0.0% 0.0% 0.0% 0.0% 4.8% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 4.6% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 4.5% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 4.3% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 4.2% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 4.0% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.8% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.7% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.5% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.3% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.2% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 3.0% 62.2% 0.0% 24.4% 8.2% 6.5% 0.1% 37.6% 0.0% 0.0% 0.0% 0.0% 2.1% 12.3% 25.8% 0.7% 9.6% 1.2% 4.8% 4.0% 0.0% 26.2% 1.2% 9.4% 1.5% 4.7% 4.0% 0.0% 27.3% 1.2% 8.0% 0.8% 4.8% 4.1% 0.0% 27.1% 1.4% 8.5% 0.6% 5.0% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 13.2% 0.0% 27.4% 1.7% 11.1% 1.1% 5.8% 33.9% 0.0% 1.7% 0.9% 34.4% 0.0% 1.5% 0.4% 39.5% 0.0% 1.3% 0.6% 42.6% 2.0% 1.3% 0.7% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 40.9% 1.9% 1.2% 0.8% 1.4% 1.6% 1.5% 1.6% 2.3% 1.6% 2.5% 2.0% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 2.8% 2.2% 1.2% 11.4% 0.0% 0.0% 0.0% 0.2% 11.5% 0.0% 0.0% 0.0% 0.1% 19.4% 0.0% 0.0% 0.0% 0.1% 18.1% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 0.1% 15.6% 0.0% 0.0% 0.0% 64.7% 0.0% 22.4% 0.1% 37.4% 0.0% 0.0% 0.0% Valuation Parameters Estimated Price/Share=$70.43 Company Name: KOHL'S CORP Required Valuation Parameters (to compute value of common equity): Enter Cost of Equity Capital: Enter Value of Contingent Claims on Common Equity ($000): Enter Date of Valuation: Enter Dilution Factor for Splits Occurring Since Latest Fiscal Year End: Optional Valuation Parameters (to compute value to all investors): Enter Cost of Net Debt: Enter Cost of Preferred Stock: Enter Cost of Minority Interest: Adjust the Weighted Average Cost of Capital Input such that the two equity values below are approximately equal: 10.00% 0 2017/10/12 1.00 8.00% 9.00% 10.00% 9.3720% up Residual Income Valuation ($000) Company Name Most Recent Fiscal Year End Date of Valuation Cost of Common Equity Teriminal Growth Rate KOHL'S CORP 1/31/2010 10/12/2017 10.00% 3.00% Fiscal Year of Forecast Valuation to Common Equity Net Income Common Equity at Beginning of Year Residual Income Present Value of Residual Income Present Value Beyond 10 Years Present Value of First 10 Years Common Equity as of 1/31/2010 Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share 2011/01/31 2012/01/31 2013/01/31 2014/01/31 2015/01/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 1,093,460 8,218,108 271,649 224,503 1,140,301 8,586,636 281,637 211,598 1,187,266 8,957,529 291,513 199,108 1,234,207 9,329,669 301,241 187,047 1,280,968 9,701,883 310,780 175,427 1,327,387 10,072,945 320,092 164,258 1,373,298 10,441,585 329,139 153,546 1,418,530 10,806,496 337,881 143,294 137,049 2,068,000 (28,391) (26,288) 1,438,346 143,305 2,164,147 (29,827) (25,572) 149,610 2,261,195 (31,285) (24,835) 155,947 2,358,866 (32,762) (24,081) 162,294 2,456,864 (34,255) (23,313) 168,633 2,554,883 (35,758) (22,534) 174,941 2,652,598 (37,267) (21,745) 181,196 2,749,675 (38,778) (20,950) 187,377 2,845,770 (40,285) (20,153) Dividends to Preferred Stockholders Beginning Book Value of Preferred Stock Residual Income to Preferred Stock Present Value of Preferred Residual Income Value of Preferred Stock 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Minority Interest in Earnings Beginning Book Value of Minority Interest Residual Income to Minority Interest Present Value of MI Residual Income Value of Minority Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,132,413 9,921,000 202,617 185,255 13,073,149 (1,438,346) 0 0 11,634,803 21,623,281 0 21,623,281 307,000 307,000 $70.43 1,182,890 10,382,255 209,865 175,440 1,233,666 10,847,831 217,007 165,865 1,284,586 11,316,395 224,013 156,549 1,335,488 11,786,534 230,854 147,505 1,386,204 12,256,765 237,500 138,748 1,436,560 12,725,542 243,922 130,289 1,486,374 13,191,260 250,089 122,137 Valuation to All Investors Cost of Debt Cost of Preferred Stock Cost of Minority Interest After Tax Weighted Average Cost of Capital Net Interest Expense to Net Debtholders Beginning Book Value of Debt Residual Interest Expense Present Value of Residual Interest Income Value of Debt Net Operating Income Beginning Net Operating Assets Residual Income to all Investors Present Value of Residual Investor Income Entity Value Less Value of Debt Less Value of Preferred Stock Less Value of Minority Interest Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share 1,046,887 7,853,000 261,587 237,806 1,951,370 1,830,093 2021/01/31 1,462,912 11,166,337 346,279 133,505 2022/01/31 1,506,269 11,519,743 354,295 124,178 1,551,457 11,865,336 364,924 116,276 199,420 3,033,596 (43,268) (18,557) 205,402 3,124,604 (44,566) (17,698) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,535,464 13,652,266 255,973 114,298 1,583,641 14,106,867 261,546 106,779 1,630,718 14,553,339 266,779 99,583 1,679,639 14,989,939 274,782 93,781 7,853,000 11,634,463 21,622,650 0 21,622,650 307,000 307,000 $70.43 8.00% 9.00% 10.00% 9.37% 193,459 2,940,530 (41,784) (19,354) DCF Valuations ($000) Company Name Most Recent Fiscal Year End Date of Valuation Cost of Common Equity Terminal Growth Rate KOHL'S CORP 1/31/2010 10/12/2017 10.00% 3.00% Fiscal Year of Forecast Valuation to Common Equity Free Cash Flow to Common Equity Present Value of FCF Present Value Beyond 10 Years Present Value of First 10 Years Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share 2011/01/31 2012/01/31 2013/01/31 2014/01/31 2015/01/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 2021/01/31 2022/01/31 724,931 599,117 769,408 578,067 815,126 556,742 861,994 535,231 909,906 513,618 958,746 491,988 1,008,387 470,420 1,058,690 448,988 1,109,506 427,762 1,160,677 406,810 1,195,497 380,922 40,902 37,872 1,438,346 46,257 39,658 51,940 41,232 57,948 42,593 64,276 43,745 70,918 44,690 77,863 45,432 85,101 45,977 92,617 46,331 100,393 46,501 108,412 46,496 111,664 44,343 Free Cash Flow to Preferred Stock Present Value of FCF to Preferred Stock Value of Preferred Stock 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Free Cash Flow to Minority Interest Present Value of FCF to Minority Interest Value of Minority Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 671,158 613,647 13,073,149 (1,438,346) 0 0 11,634,803 21,623,281 0 21,623,281 307,000 307,000 $70.43 717,314 599,649 765,102 584,791 814,447 569,165 865,257 552,859 917,427 535,963 970,842 518,567 1,025,368 500,761 1,080,863 482,631 1,137,169 464,262 1,194,118 445,738 1,229,941 419,769 Valuation to All Investors Cost of Net Debt Cost of Preferred Stock Cost of Minority Interest After Tax Weighted Average Cost of Capital Free Cash Flow to Debt Present Value of FCF to Debt Value of Debt Free Cash Flows to Investors Present Value of FCF to Investors Entity Value Less Value of Net Debt Less Value of Preferred Stock Less Value of Minority Interest Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share 681,779 619,799 6,392,730 5,241,733 11,634,463 21,622,650 0 21,622,650 307,000 307,000 $70.43 8.00% 9.00% 10.00% 9.37% EPS Forecaster ($000, except per share amounts) Company Name Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecasted Price at Valuation Date KOHL'S CORP 307,000 307,000 $70.43 Fiscal Year of Forecast Net Income Common Equity Issued (Repurchased) Forecasted Price at Year End New Shares Issued (Repurchased) Shares Outstanding at End of Year Forecast EPS Consensus Analyst Forecast of EPS Forecast FiveAnalyst Year Growth RateofinGrowth EPS Consensus Forecast Rate Forecast 2011/01/31 1,046,887 (681,779) $23.26 (29,309) 277,691 $3.58 18% Forecast 2012/01/31 1,093,460 (724,931) $25.59 (28,331) 249,361 $4.15 Forecast 2013/01/31 1,140,301 (769,408) $28.15 (27,335) 222,026 $4.84 Forecast 2014/01/31 1,187,266 (815,126) $30.96 (26,327) 195,699 $5.68 Forecast 2015/01/31 1,234,207 (861,994) $34.06 (25,310) 170,390 $6.74 Although Although not not aa necessary necessary input input for for eVal, eVal, we we recommend recommend that that you you find find the the analyst analyst forecasts forecasts for for your your company company and and store store them them in in the the yellow-shaded yellow-shaded cells cells for for comparison comparison purposes. purposes. To obtain analyst forecasts, click here Forecast 2016/01/31 1,280,968 (909,906) $37.46 (24,288) 146,102 $8.09 Model Summary Historical Data For: KOHL'S CORP Most Recent Fiscal Year End: Average ROE (last five years) Sales Growth (last five years) 2010/01/31 16.27% 6.40% Forecast Data: Forecast Horizon This Year's ROE Terminal Year's ROE This Year's Sales Growth Terminal Year's Sales Growth This Year's Forecast EPS Forecast 5 Year EPS Growth 10 years 13.03% 12.88% 4.65% 3.00% $3.58 17.72% Valuation Data: Cost of Equity Capital Valuation Date Estimated Price/Share Estimated Price/Earnings Ratio Estimated Market/Book Ratio 10.00% 2017/10/12 $70.43 19.67 2.75 Cut-and-Paste the yellow block of case data into the Raw Data Input section on the lower part of the eVal financial statemen America Online Netflix Salton Nordstrom Amazon.com Overstock City Screens Ross Stores Four Models Royal Caribbean Country Cinema Kohls Company Name and Ticker AMERICA ONLINE INC AOL Common Shares Outstan