Question
US Dollars, Millions Performance Drivers / Assumptions Historical Forecast Year -2 -1 Base Year +1 +2 +3 +4 +5 % Growth in revenues 6.2% 9.7%
US Dollars, Millions Performance Drivers / Assumptions Historical Forecast Year -2 -1 Base Year +1 +2 +3 +4 +5 % Growth in revenues 6.2% 9.7% 8% 8% 8% 8% 8% CoGS % of revenue 51.7% 55.8% 58.6% 58% 57% 56% 55% 54% SG&A % of revenue 6.2% 7.8% 10.1% 12% 12% 12% 12% 12% R&D % of revenue 4.1% 5.2% 8.3% 8% 8% 8% 8% 8% D&A as % Revenue 6.9% 7.1% 10.1% 7% 7% 7% 7% 7% Effective interest rate 8.6% 5.5% 5.0% 6% 6% 6% 6% 6% Taxes 35.7% 42.9% 40.0% 40% 40% 40% 40% 40% Days Sales Outstanding 14.9 18.7 25.0 25 25 25 25 25 Days Inventory Outstanding 9.9 12.6 20.0 20 20 20 20 20 Days Payable Outstanding 12.0 8.4 10.0 10 10 10 10 10 CapEx as % Revenue 3% 2% 7% 7% 7% 7% 7% Working capital (excluding cash) 7.5 9.0 14.5 (3) (3) (3) (4) (4) Debt repaid 2 2 2 2 2 Dividend payout ratio 50% 50% 50% 50% 50% Min Required cash balance $5.00 Days in a year 360 Income Statements Historical Forecast Year -2 -1 Base Year +1 +2 +3 +4 +5 Revenues $145.0 $154.0 $169.0 $182.5 $197.1 $212.9 $229.9 $248.3 CoGS 75.0 86.0 99.0 105.9 112.4 119.2 126.5 134.1 Gross profits 70.0 68.0 70.0 76.7 84.8 93.7 103.5 114.2 SG&A 9.0 12.0 17.0 21.9 23.7 25.5 27.6 29.8 R&D 6.0 8.0 14.0 14.6 15.8 17.0 18.4 19.9 EBITDA 55.0 48.0 39.0 40.2 45.3 51.1 57.5 64.6 Depreciation & amortization 10.0 11.0 17.0 12.8 13.8 14.9 16.1 17.4 EBIT 45.0 37.0 22.0 27.4 31.5 36.2 41.4 47.2 Interest expenses 3.0 2.0 2.0 2.3 2.2 2.0 1.9 1.8 EBT 42.0 35.0 20.0 25.1 29.4 34.2 39.5 45.4 Taxes 15.0 15.0 8.0 10.0 11.8 13.7 15.8 18.2 Net income 27.0 20.0 12.0 15.1 17.6 20.5 23.7 27.2 Balance Sheets Historical Forecast Assets -2 -1 Base +1 +2 +3 +4 +5 Cash $3.0 $2.0 $1.0 $5.4 Accounts receivable $6.0 $8.0 $11.7 Inventory 4.0 3.0 5.5 Current assets 13.0 13.0 - 23.9 Gross PPE 35.0 40.0 44.0 Accumulated depreciation 12.0 14.0 18.0 Net PPE 23.0 26.0 26.0 Good will 32.0 40.0 40.0 Other assets 16.0 18.0 18.0 Total assets 84.0 97.0 102.2 107.9 Liabilities Accounts payable 2.5 2.0 2.8 2.9 3.1 3.3 3.5 3.7 Current liabilities 2.5 2.0 2.8 2.9 3.1 3.3 3.5 3.7 Long term debt 35.0 36.5 40.0 Provisions and other liabilities 10.0 12.0 15.0 Total liabilities 47.5 50.5 57.8 Shareholders equity Common stock 25.0 30.0 30.0 Retained earnings 11.5 16.5 14.5 Total shareholders equity 36.5 46.5 44.5 Total liabilities & shareholders equity 84.0 97.0 102.2 BALANCE CHECK - - 0.00 Cashflow Statements Forecast Year -2 -1 Base Year +1 +2 +3 +4 +5 Operating Activities Net income 27.0 20.0 12.0 Add depreciation & amortization Changes in operating assets/liabilities: Increase in accounts receivable Increase in inventory Increase in accounts payable Cash flow from operations Investing Activities Investments in PPE (CAPEX) Sale of PPE Investments in other assets Sale of other assets Cash flow from investment activities Financing Activities Issue of equity Equity retirement or treasury buybacks Dividends paid New debt / borrowings Retirement or repayment of debt Cash flow from financing activities Net cash flow for the year Beginning cash balance Ending cash balance Debt & Dividend Payment Schedule Forecast Year +1 +2 +3 +4 +5 Cash balance before debt & dividends 1.0 5.0 5.0 5.0 5.0 Debt drawn to meet min balance 6.0 2.0 2.0 2.0 2.0 Debt repaid 2.0 2.0 2.0 2.0 2.0 Dividends paid - - - - - Ending cash balance $1.0 5.0 5.0 5.0 5.0 5.0 Debt Schedules Forecast Long term debt +1 +2 +3 +4 +5 Opening balance 40.0 44.0 44.0 44.0 44.0 Debt added 6.0 2.0 2.0 2.0 2.0 Debt repaid 2.0 2.0 2.0 2.0 2.0 Ending balance 44.0 44.0 44.0 44.0 44.0 Interest 2.5 2.6 2.6 2.6 2.6
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