4. Forecastingandvaluation Construct pro-forma financial statements for XYZ Comp
ID: 2472468 • Letter: 4
Question
4. Forecastingandvaluation Construct pro-forma financial statements for XYZ Company for the fiscal years 2016 and 2017. (It is not required to complete a cash flow statement in 2015, but all lines required for 2016 and 2017). (each question below 8 points) Q1 balance sheet Q2 income statement, and Q3 cash flow statement Q4 Value the company using EVA valuation Q5 Value the company using DCF valuation Assumptions for forecast years: 1) T ax rate is 29% 2) Depreciation rate is 15% (use contemporaneous non-current assets as benchmark) 3) Sales grow with 3% per year 4) EBITDA margin is 35% 5) Cost of debt (interest paid on net interest bearing debt) is constant (use 2015 value) 6) Non-currentassetstosalesratiois40% 7) Current assets to sales ratio is 20% 8)Non interest bearing debt to sales ratio is 8% 9) Net interest bearing debt to total assets ratio is 30% 10)The complete free cash flow to equity is paid out as dividends 2015 value) 6) Non-current assets to sales ratio is 40% 7) Current assets to sales ratio is 20% 8) Non interest bearing debt to sales ratio is 8% 9) Net interest bearing debt to total assets ratio is 30% 10) The complete free cash flow to equity is paid out as dividends Income Statement 2016E 2017E 2 015 30 000 12000 18 000 -1 800 3 600 0 Net revenuel sales Cost of sales Gross profit SG&A; Net other operating incomelexpenses EBITDA Depreciation and amortization EBIT Tax on EBIT NOPAT Net financial expenses Tax 12 600 1 800 10 800 3 132 7 668 -216 63 7 515 Net incomel Profit after taxExplanation / Answer
Income Statement
2015
2016E
2017E
Net Revenue / Sales
30,000.00
30,900.00
31,827.00
Cost of sales
(12,000.00)
(12,850.00)
(13,550.00)
Gross Profit
18,000.00
18,050.00
18,277.00
SG&A
(1,800.00)
(2,500.00)
(3,500.00)
Net other Operating income / expenses
(3,600.00)
(4,735.00)
(3,638.00)
EBITDA
12,600.00
10,815.00
11,139.45
Depreciation and Amortizations
(1,800.00)
(1,854.00)
(1,909.00)
EBIT
10,800.00
8,961.00
9,230.45
Tax on EBIT
(3,132.00)
(2,598.69)
(2,676.83)
NOPAT
7,668.00
6,362.31
6,553.62
Net financial expenses
(216.00)
(216.00)
(216.00)
Tax
63.00
63.00
63.00
Net income / Profit after tax
7,515.00
6,209.31
6,400.62
Balance sheet
2015
2016E
2017E
Non-current assets, total
12,000.00
12,360.00
12,730.80
Current assets, Total
6,000.00
6,180.00
6,365.40
Total assets
18,000.00
18,540.00
19,096.20
Total Non-interest bearing debt
2,400.00
2,472.00
2,546.16
invested capital
15,600.00
16,068.00
16,550.04
Equity at begin
10,200.00
12,323.31
Profit after tax
6,209.31
6,400.62
Dividends
(4,086.00)
(4,364.00)
Equity at end
10,200.00
12,323.31
14,359.93
Net interest bearing debt
5,400.00
9,270.00
9,548.10
Invested capital
15,600.00
21,593.31
23,908.03
Cash flow statement
2015
2016E
2017E
NOPAT
6,362.31
6,553.62
Add:
Depreciation
1,854.00
1,909.00
Less:
Increase in current asset
(180.00)
(185.40)
Cash flow from Operations
8,036.31
8,277.22
Investment non-current assets
(360.00)
(370.60)
Free cash flow to the firm
(360.00)
(370.60)
Net financial expenses
(216.00)
(216.00)
Change interest bearing debt
(3,870.00)
(4,148.00)
free cash flow to equity
(4,086.00)
(4,364.00)
Dividends
(4,086.00)
(4,364.00)
Cash Surplus
3,590.31
3,542.62
Income Statement
2015
2016E
2017E
Net Revenue / Sales
30,000.00
30,900.00
31,827.00
Cost of sales
(12,000.00)
(12,850.00)
(13,550.00)
Gross Profit
18,000.00
18,050.00
18,277.00
SG&A
(1,800.00)
(2,500.00)
(3,500.00)
Net other Operating income / expenses
(3,600.00)
(4,735.00)
(3,638.00)
EBITDA
12,600.00
10,815.00
11,139.45
Depreciation and Amortizations
(1,800.00)
(1,854.00)
(1,909.00)
EBIT
10,800.00
8,961.00
9,230.45
Tax on EBIT
(3,132.00)
(2,598.69)
(2,676.83)
NOPAT
7,668.00
6,362.31
6,553.62
Net financial expenses
(216.00)
(216.00)
(216.00)
Tax
63.00
63.00
63.00
Net income / Profit after tax
7,515.00
6,209.31
6,400.62
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