What is going on at Whole Foods Market, and how does that affect Short? Use Exhibit 7 to comment on the forecasted return on capital (ROC). Identify and comment on whether the forecast is optimistic, pessimistic, or just right.

2 Exhibit 7 WHOLE FOODS MARKET Deutsche Bank Model (millions of USD, except per share figures) Forecast forecast 2014 2015 105% 12.6% At Fiscal Year End Store Growth Sales Growth EBITDA Margin Tax Rate Actual Actual Actual 2011 2012 2013 4.0% 7.7% 8.1% 12.2% 15.7% 10.4% 8.5% 9.0% 9.5% 38.1% 38.4% 38.8% 11.1% 9.4% 39.0% 14.0% 9.8% 39.0% 7.0 7.1 10.5 Current Asset Turnover Current Liabilities Turnove Net PP&E / Store Annual Dep. & Amort / Sto 7.0 10.5 6.4 1.00 5.6 10.9 6.5 0.93 6.5 10.7 6.7 0.94 10.5 6.7 0.94 6.7 0.94 423 Stores Sales EBITDA Dep. & Amort. EBIT Taxes Net Income Shares Outstanding Earnings per Share 311 335 10,108 11,699 8591,055 311 311 548 744 209 286 339 458 350 364 0.97 1.26 362 12,917 1,222 339 883 343 540 372 1.45 400 450 14,35116,360 1,352 1,600 376 976 1,176 459 596 717 372 1.60 1.93 381 372 2,304 1.406 Current Assets Current Liabilities Net Working Capital Net PP&E 1,453 880 573 1,997 2,103 977 1,126 2,193 1,980 1.088 892 2,428 2,050 1.238 812 2,680 3,018 Return on Capital 13.2% 13.8% 16.3% 17.1% 18.3%