Whole Foods Market Assignment

1. Build a range of Whole Foods intrinsic value using
   1. Conventional grocer peers
   2. Supercenters and Wholesalers
2. Compute the WACC for Whole Foods using peer betas of
   1. Organic grocer peers
   2. Conventional & Supercenters/Wholesaler peers.

Make sure to label your variables clearly and add comments or textbox when appropriate so that your work can easily be followed. Turn in your spreadsheet on Blackboard.

Exhibit 7
WHOLE FOODS MARKET
Deutsche Bank Model (millions of USD, except per share figures)
						1	2	3	4	5	6	7
		Actual	Actual	Actual		Forecast	Forecast	Forecast	Forecast	Forecast	Forecast	Forecast
	At Fiscal Year End	2011	2012	2013		2014	2015	2016	2017	2018	2019	2020
	Store Growth	4.0%	7.7%	8.1%
	Sales Growth	12.2%	15.7%	10.4%
	EBITDA Margin	8.5%	9.0%	9.5%
	Tax Rate	38.1%	38.4%	38.8%
	NFA @% of sales	19.8%	18.7%	18.8%
	Nowc as % of sales	5.7%	9.6%	6.9%
	dep+am	3.1%	2.7%	2.6%
	Current Asset Turnover	7.0	5.6	6.5
	Current Liabilities Turnover	10.5	10.9	10.7
	Net PP&E / Store	6.4	6.5	6.7
	Annual Dep. & Amort. / Store	1.00	0.93	0.94
	Stores	311	335	362
	Sales	10,108	11,699	12,917
	EBITDA	859	1,055	1,222
	Dep. & Amort.	311	311	339
	EBIT	548	744	883
	Taxes	209	286	343
	Net Income	339	458	540
	Shares Outstanding	350	364	372
	Earnings per Share	0.97	1.26	1.45
	Current Assets	1,453	2,103	1,980
	Current Liabilities	880	977	1,088
	Net Working Capital	573	1,126	892
	changes in nowc
	Net PP&E	1,997	2,193	2,428
	changes in pp&E
	Return on Capital	13.2%	13.8%	16.3%
Source: Company Financial Reports, Deutsche Bank Analyst report and casewriter estimates
	fcf=ebit*(1-t)-(change in nfa+change in nowc)