Case 2 : Teuer Furniture (A) Discounted Cash Flow Valuation Section - A Group 4 PGP/19/016 PGP/19/102 PGP/19/148 PGP/19/176
Deepika Dudhey Shilpi Jain Manan Agrawal Thilak Kumar K
on
These spreadsheet exhibits relate to the case Teuer Furniture (A): Discounted Cash Flow Valuation, Case #KEL778. ©2015 by the Kellogg School of Management at Northwestern University. This case was prepared by Professor Mitchell A. Petersen. Teuer Furniture is a fictional company whose profile was created based on data from real industry leaders. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-7837600 outside the United States or Canada) or e-mail
[email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Kellogg Case Publishing.
low Valuation, Case
as prepared by as created based on cussion. Cases are not e or ineffective 545-7685 (or 617-783part of this publication d in any form or by any ermission of Kellogg
Exhibit 1: Teuer Furnitures Showrooms and Square Footage Stores Opened 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Stores 1 3 4 5 6 2 1 2 2 3 2 2 2
763655 764480
1 4 8 13 19 21 22 24 26 29 31 33 35
SQ FT Opened 17,200 17,600 18,500 21,100 22,100 15,500 14,500 14,700 15,400 16,300 16,000 16,000 15,000
1290960 48900
Total SQ FT 17,200 70,000 144,000 249,500 382,100 413,100 427,600 457,000 487,800 536,700 568,700 600,700 630,700
40 35 30 25 20 15 10 5 0 2003
2005
40
700,000
35
600,000
30
500,000
25
400,000
20
300,000
15
200,000
10
100,000
5 0 2003
2005
2007
2009
Number of Showrooms
2011
2013
Total Square Feet
0 2015
Exhibit 2: Economic Indicators: GDP and Furniture Sales Growth CPI index Inflation (CPI) GDP (T$) GDP growth Furniture sales ($B) Furniture sales growth
2002 180.9 10,642 94.44
2003 184.3 1.9% 11,142 4.7% 96.7 2.4%
2004 190.3 3.3% 11,853 6.4% 103.8 7.3%
2005 196.8 3.4% 12,623 6.5% 109.1 5.2%
2006 201.8 2.5% 13,377 6.0% 112.8 3.4%
2007 210.0 4.1% 14,029 4.9% 111.1 -1.5%
2008 210.2 0.1% 14,292 1.9% 99.6 -10.4%
2009 215.9 2.7% 13,974 -2.2% 86.3 -13.4%
2010 219.2 1.5% 14,499 3.8% 87.3 1.2%
2011 225.7 3.0% 15,076 4.0% 90.1 3.2%
2012 229.6 1.7% 15,685 4.0% 93.1 3.4%
10.0%
5.0%
0.0% 2003
2005
2007
2009
2011
2013
-5.0%
-10.0%
-15.0% GDP Growth
Furniture Sales Growth
Inflation (CPI)
2015
2017
2013 233.5 1.7% 16,238 3.5% 95.9 3.0%
2014 237.7 1.8% 17,049 5.0% 98.6 2.8%
2015 242.3 1.9% 18,012 5.6% 101.2 2.6%
2016 247.4 2.1% 19,021 5.6% 103.6 2.4%
2017 252.1 1.9% 20,078 5.6% 105.9 2.2%
2018 256.6 1.8% 21,101 5.1% 108.0 2.0%
2019 261.3 1.8%
110.2 2.0%
Exhibit 3: Teuer Furniture Income Statement 2003 Sales Cost of goods sold Selling, general and admin Advertising Depreciation Lease Corporate expense Taxable income Tax loss carry forward Taxes Net income Parameters: Corporate tax rate
Sales Growth
2004 2,057 -1,463 -410 -203 -72 -250 -185 -526 526 0 -526
2005 10,415 -7,057 -1,812 -1,019 -307 -1,080 -729 -1,588 2,114 0 -1,588
2006 26,701 -17,424 -4,958 -2,411 -669 -2,330 -1,602 -2,693 4,807 0 -2,693
2007 51,540 -30,730 -9,230 -4,588 -1,264 -4,240 -3,092 -1,604 6,411 0 -1,604
2008 79,191 -43,834 -13,576 -6,585 -2,075 -6,770 -4,751 1,600 4,811 0 1,600
2009 90,680 -47,290 -14,679 -7,532 -2,188 -7,380 -5,441 6,170 0 -543 5,626
2010 111,451 -49,068 -16,471 -8,367 -2,032 -7,712 -5,573 22,229 0 -8,892 13,337
2011 134,093 -55,487 -18,698 -9,545 -1,820 -8,450 -6,705 33,389 0 -13,356 20,033
2012 148,218 -61,955 -21,253 -10,744 -1,450 -9,320 -7,411 36,086 0 -14,434 21,651
406.44%
156.37%
93.03%
53.65%
14.51%
22.91%
20.32%
10.53%
40%
Exhibit 4: Teuer Furniture Balance Sheet 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0 671 671 358 1,029
751 3,151 3,902 1,461 5,364
3,479 8,216 11,695 2,969 14,663
8,675 15,125 23,800 5,270 29,070
16,946 20,908 37,853 8,065 45,918
25,272 21,715 46,987 6,914 53,900
29,059 24,868 53,927 5,119 59,046
36,625 26,808 63,433 3,839 67,272
42,421 29,216 71,637 3,142 74,779
48,200 33,343 81,543 3,920 85,463
236 29 265 0 764 1,029
1,158 145 1,303 0 4,061 5,364
2,781 358 3,139 0 11,525 14,663
5,119 658 5,777 0 23,293 29,070
7,228 958 8,186 0 37,732 45,918
7,767 1,055 8,822 0 45,079 53,900
8,277 1,203 9,480 0 49,565 59,046
9,133 1,359 10,493 0 56,779 67,272
9,986 1,519 11,505 0 63,274 74,779
11,364 1,682 13,046 0 72,417 85,463
Assets Accounts Receivable Inventory Total Current Assets PPE Total Assets Liabilities and Equity Accounts Payable Accrued Expenses Total Current Liabilities Debt Equity Total Liabilities and Equity Balance sheet check
Exhibit 5: Teuer Furniture Income Statement for Individual Showrooms # 2003
Avg Size 1
17,200
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Sales
2,057
3,754
5,224
6,148
6,341
5,503
5,636
5,871
6,034
6,235
6,430
6,618
6,799
6,971
7,133
7,299
CGS
1,463
2,309
3,018
2,394
2,753
2,311
2,194
2,150
2,416
2,476
2,554
2,629
2,700
2,769
2,833
2,899
SGA
410
640
857
856
815
765
767
687
791
848
874
900
925
948
970
993
203
334
399
434
422
423
391
401
457
449
463
477
490
502
514
526
72
72
72
72
72
0
0
0
65
65
65
65
65
0
0
0
250
250
250
250
250
250
302
302
302
302
302
302
365
365
365
365
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Sales
6,661
11,907
15,158
16,488
15,446
16,187
17,279
17,869
18,464
19,041
19,599
20,134
20,643
21,123
21,615
CGS
4,748
7,428
7,894
7,216
6,031
6,675
6,691
7,176
7,330
7,559
7,781
7,993
8,195
8,386
8,581
SGA
1,171
2,148
2,631
2,323
2,239
2,224
2,395
2,319
2,511
2,590
2,665
2,738
2,807
2,873
2,940
Advertising
685
971
1,266
1,213
1,235
1,241
1,245
1,287
1,329
1,371
1,411
1,450
1,486
1,521
1,556
Depreciation
235
235
235
235
235
0
0
0
187
187
187
187
187
0
0
830
830
830
830
830
830
1,003
1,003
1,003
1,003
1,003
1,003
1,212
1,212
1,212
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Sales
9,570
16,651
19,785
20,951
22,847
24,451
24,499
25,315
26,108
26,872
27,605
28,303
28,962
29,636
CGS
6,978
10,917
11,430
8,499
9,387
9,857
9,042
10,050
10,365
10,668
10,959
11,236
11,498
11,765
SGA
1,953
2,977
3,371
3,039
3,021
3,228
3,693
3,443
3,551
3,655
3,754
3,849
3,939
4,030
1,041
1,488
1,587
1,598
1,605
1,645
1,793
1,823
1,880
1,935
1,988
2,038
2,085
2,134
Advertising Depreciation Lease 2004
3
17,600
Lease 2005
4
18,500
Advertising Depreciation Lease 2006
5
21,100
Sales
363
363
363
363
363
0
0
0
301
301
301
301
301
0
1,250
1,250
1,250
1,250
1,250
1,250
1,510
1,510
1,510
1,510
1,510
1,510
1,825
1,510
1
2
3
4
5
6
7
8
9
10
11
12
13
13,583
21,142
23,592
29,702
34,105
34,824
35,984
37,110
38,197
39,239
40,231
41,167
42,125
CGS
9,526
11,229
13,594
9,902
13,259
13,932
14,286
14,733
15,164
15,578
15,972
16,343
16,724
SGA
2,767
4,016
4,237
3,780
4,895
4,946
4,894
5,047
5,195
5,337
5,471
5,599
5,729
1,400
1,784
1,964
2,014
2,327
2,287
2,591
2,672
2,750
2,825
2,897
2,964
3,033
594
594
594
594
594
0
0
0
490
490
490
490
490
1,910
1,910
1,910
1,910
1,910
1,910
2,309
2,309
2,309
2,309
2,309
2,309
2,791
1
2
3
4
5
6
7
8
9
10
11
12
Sales
15,435
22,001
30,466
39,628
43,541
45,542
46,967
48,343
49,662
50,917
52,102
53,315
CGS
11,205
14,801
16,422
15,232
17,856
18,080
18,646
19,192
19,716
20,214
20,685
21,166
SGA
3,050
3,878
5,471
5,166
5,917
6,194
6,388
6,575
6,754
6,925
7,086
7,251
1,578
1,986
2,458
2,748
3,109
3,279
3,382
3,481
3,576
3,666
3,751
3,839
812
812
812
812
812
0
0
0
655
655
655
655
2,530
2,530
2,530
2,530
2,530
2,530
3,058
3,058
3,058
3,058
3,058
3,058
1
2
3
4
5
6
7
8
9
10
11
Sales
3,187
5,176
7,244
9,257
10,461
10,921
11,241
11,547
11,839
12,115
12,397
CGS
2,053
3,467
4,421
3,764
4,153
4,336
4,462
4,584
4,700
4,809
4,921
SGA
Advertising Depreciation Lease 2007
6
22,100
Advertising Depreciation Lease 2008
2
15,500
522
951
1,225
1,243
1,423
1,485
1,529
1,570
1,610
1,648
1,686
Advertising
326
499
598
675
753
786
809
831
852
872
893
Depreciation
185
185
185
185
185
0
0
0
152
152
610
610
610
610
610
610
737
737
737
737
Lease 2009
1
14,500
152 737
1
2
3
4
5
6
7
8
9
10
Sales
1,437
2,507
3,540
4,481
5,054
5,266
5,410
5,546
5,676
5,808
CGS
1,021
1,652
1,887
1,779
2,007
2,091
2,148
2,202
2,253
2,306
SGA
257
480
615
609
687
716
736
754
772
790
158
227
303
323
364
379
389
399
409
418
79
79
79
79
79
0
0
0
64
280
280
280
280
280
280
338
338
338
Advertising Depreciation Lease 2010
2
14,700
64 338
1
2
3
4
5
6
7
8
9
Sales
3,008
5,300
7,288
9,207
10,364
10,778
11,050
11,307
11,570
CGS
2,226
3,526
4,096
3,655
4,115
4,279
4,387
4,489
4,593
SGA
623
1,028
1,261
1,252
1,410
1,466
1,503
1,538
1,574
Advertising
353
473
598
663
746
776
796
814
833
Depreciation
150
150
150
150
150
0
0
0
123
565
565
565
565
565
565
683
683
1
2
3
4
5
6
7
8
Sales
3,354
5,879
8,069
10,174
11,430
11,863
12,139
12,421
CGS
2,357
3,745
4,535
4,039
4,538
4,709
4,819
4,931
SGA
Lease 2011
2
15,400
683
701
1,076
1,396
1,384
1,555
1,613
1,651
1,689
Advertising
358
523
662
733
823
854
874
894
Depreciation
160
160
160
160
160
0
0
0
610
610
610
610
610
610
737
610
1
2
3
4
5
6
7
Sales
5,379
9,411
12,891
16,223
18,191
18,842
19,280
CGS
3,814
5,995
7,245
6,441
7,222
7,480
7,654
SGA
1,038
1,722
2,230
2,206
2,474
2,562
2,622
838
1,057
1,168
1,310
1,357
1,388
Lease 2012
3
16,300
Advertising
570
Depreciation
259
259
259
259
259
0
0
1,000
1,000
1,000
1,000
1,000
1,000
1,209
1
2
3
4
5
6
Sales
3,622
6,326
8,647
10,861
12,155
12,590
CGS
2,568
4,029
4,860
4,312
4,825
4,998
SGA
Lease 2013
2
16,000
699
1,158
1,496
1,477
1,653
1,712
Advertising
384
563
709
782
875
906
Depreciation
172
172
172
172
172
0
668
668
668
668
668
668
1
2
3
4
5
Sales
3,731
6,503
8,872
11,122
12,447
CGS
2,097
2,582
3,522
4,416
4,941
SGA
720
1,190
1,535
1,513
1,693
720
1,190
1,535
1,513
1,693
175
175
175
175
175
682
682
682
682
1
2
3
4
Sales
3,597
6,257
8,520
10,680
CGS
1,428
2,484
3,382
4,240
SGA
Lease 2014
2
16,000
Advertising Depreciation Lease 2015
2
15,000
682
694
1,145
1,474
1,453
Advertising
381
557
699
769
Depreciation
167
167
167
167
652
652
652
652
Lease
Parameters: Lease rate (2013) Lease inflation
20.88 2.0%
Exhibit 6: Teuer Furniture Balance Sheet for Individual Showrooms # 2003
Avg Size 1
17,200
Cap expenditure
2003 0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
5
6
7
8
9
10
11
12
13
14
15
2,040
1,700
1,745
1,742
1,902
2,020
2,083
2,144
2,203
2,259
2,311
324
671
1,090
1,330
1,206
1,167
980
972
1,082
1,027
1,090
1,216
1,251
236
396
448
405
403
350
345
370
369
390
416
29
49
62
61
61
53
54
57
58
PPE Cap expenditure
0
1,285
1,318
1,349
1,380
428
440
451
462
473
58
64
66
68
70
71
73
260
195
130
65
0
9
10
11
12
13
14
1
2
3
4
5
6
7
8
2,292
3,870
5,029
5,526
5,276
5,599
5,612
5,691
5,982
9,064
9,329
9,584
9,826
10,055
1,175
Accts receivable Inventory
2018
4 1,975
Accr expenses 17,600
2017
3 1,665
Accts payable
3
2016
2 1,187
Inventory
2004
2015
1 751
358
Accts receivable
936
2,061
3,590
4,304
3,352
2,851
3,042
3,248
3,397
3,619
3,598
3,704
3,805
3,901
3,992
4,085
Accts payable
762
1,255
1,421
1,124
1,025
1,090
1,124
1,139
1,153
1,232
1,268
1,303
1,336
1,367
1,399
Accr expenses
95
158
193
173
162
162
175
177
179
190
196
201
206
211
216
936
748
561
374
187
0
8
9
10
11
12
13
2005
4
18,500
Cap expenditure
0
1
2
3
4
5
6
7
1,814
Accts receivable
1,506 3,140
5,508
6,296
6,231
7,149
7,751
7,950
8,202
8,459
8,707
8,944
9,170
9,384
Inventory
3,296
5,271
4,640
3,975
4,075
4,427
4,354
5,114
4,934
5,078
Accts payable
1,078
1,760
1,742
1,381
1,523
1,572
1,565
1,631
1,689
Accr expenses
138
212
240
203
240
244
251
259
2006
5
21,100
Cap expenditure
0
1
2
3
4
5
6
5,217
5,349
5,473
5,600
1,739
1,786
1,832
1,874
1,918
261
268
276
283
289
296
1,506
1,205
904
603
301
0
7
8
9
10
11
12
2,971
Accts receivable
2,450 4,433
6,593
7,974
10,040
10,908
11,761
11,659
12,024
12,376
12,713
13,035
13,338
Inventory
4,344
6,518
6,635
5,870
6,689
6,854
6,348
7,013
7,218
7,415
7,603
7,779
7,960
Accts payable
1,533
2,227
2,181
1,889
2,165
2,325
2,377
2,401
2,472
2,539
2,603
2,664
2,726
Accr expenses
193
272
300
291
337
343
362
371
381
392
402
411
421
2,450
1,960
1,470
980
490
0
1
2
3
4
5
6
7
8
9
10
11
2007
6
22,100
Cap expenditure
4,058
Accts receivable
3,277 4,817
6,829
9,849
12,400
13,920
14,756
15,217
15,663
16,091
16,497
16,881
Inventory
5,232
6,246
8,710
7,320
8,121
9,022
8,876
9,135
9,385
9,622
9,846
10,075
Accts payable
1,732
2,480
2,712
2,631
2,712
2,919
3,039
3,128
3,214
3,295
3,372
3,450
Accr expenses
213
293
362
381
436
435
469
483
496
508
520
532
3,277
2,622
1,966
1,311
9
10
2008
2
15,500
Cap expenditure
0
1
2
3
4
5
6
7
8
1,048
1,758
2,212
2,905
3,389
3,538
3,642
3,741
3,836
3,925
1,028
1,711
2,147
1,727
349
547
662
924
Accts receivable Inventory Accts payable Accr expenses 2009
1
14,500
Cap expenditure
761 1,911
2,064
2,124
2,182
2,237
2,289
2,343
586
690
707
727
747
766
784
802
43
72
88
94
101
109
112
115
118
121
124
924
739
554
370
185
0
761
609
457
0
1
2
3
4
7
8
6
394
Accts receivable Inventory Accts payable Accr expenses 2010
5
2
14,700
Cap expenditure
484
840
1,191
1,452
1,638
1,706
1,753
1,797
1,839
488
882
881
823
955
995
1,022
1,048
1,073
1,097
171
261
327
367
376
281
327
341
350
359
21
34
43
44
50
53
54
55
394
315
236
158
79
0
0
1
2
3
4
5
6
57
58
322
258
7
752
Accts receivable Inventory
9
322
8 616
956
1,787
2,361
2,983
3,358
3,492
3,580
3,664
1,013
1,787
1,913
1,740
1,959
2,037
2,088
2,137
2,186
Accts payable
348
577
683
596
671
697
715
732
749
Accr expenses
44
71
91
92
103
108
110
113
116
752
602
451
301
150
0
0
1
2
3
4
5
6
7
1,093
1,905
2,614
3,296
3,703
3,844
3,933
1,067
1,795
2,158
387
623
2011
2
15,400
Cap expenditure Inventory Accts payable Accr expenses 2012
616
798
Accts receivable
3
16,300
Cap expenditure
1,923
2,160
2,242
2,294
2,347
739
658
740
768
786
804
47
76
99
102
114
118
121
124
798
638
479
319
160
0
0
1
2
3
4
5
6
1,743
3,049
4,177
5,256
5,894
6,105
1,293
Accts receivable Inventory
1,708
2,854
3,448
3,066
3,438
3,561
3,643
Accts payable
617
977
1,181
1,050
1,177
1,219
1,248
Accr expenses
79
123
158
162
182
188
192
1,293
1,034
776
517
259
0
0
1
2
3
4
5
1,174
2,050
2,802
3,519
3,938
1,918
2,313
657
2013
2
16,000
Cap expenditure
860
Accts receivable Inventory
2,053
2,297
2,379
792
703
787
815
83
106
108
121
126
688
516
344
172
0
0
1
2
3
4
Accts receivable
1,209
2,107
2,875
3,604
Inventory
1,229
1,677
2,102
2,352
421
574
720
805
114
147
145
163
701
526
350
175
0
1
2
3
Accts receivable
1,165
2,027
2,760
Inventory
2,018
Accts payable Accr expenses 860 2014
2
16,000
Cap expenditure
876
Accts payable Accr expenses 876 2015
2 Cap expenditure
15,000
837 1,182
1,610
Accts payable
405
551
Accr expenses
73
97
103
670
502
335
837
691
Exhibit 7: Teuer Furniture Cash Flow Assets 2003 Sales - Costs - Taxes Net income - Capital expenditure + Depreciation - Increase in NWC Cash flow to assets
0 -358 0 -406 -764
2004 2,057 -2,582 0 -526 -1,175 72 -2,193 -3,823
2005 10,415 -12,003 0 -1,588 -1,814 307 -5,957 -9,052
2006 26,701 -29,394 0 -2,693 -2,971 669 -9,467 -14,461
2007 51,540 -53,144 0 -1,604 -4,058 1,264 -11,645 -16,043
2008 79,191 -77,591 0 1,600 -924 2,075 -8,498 -5,747
2009 90,680 -84,510 -543 5,626 -394 2,188 -6,281 1,139
5.4033317 2.7158396 1.5892057 1.2300833 0.7297668 0.7391534 1.3523104
2010 111,451 -89,222 -8,892 13,337 -752 2,032 -8,494 6,123
2011 134,093 -100,704 -13,356 20,033 -1,122 1,820 -7,192 13,539
0.8466941 1.1630737
2012 148,218 -112,132 -14,434 21,651 -2,229 1,450 -8,365 12,508
Exhibit 8: Forecasting Sales Revenue and Costs Sales growth
CGS
SGA
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1
2 73.6% 72.9% 76.6% 73.8% 64.5% 60.5% 69.0% 70.4%
3 34.6% 29.2% 32.6% 28.8% 36.8% 35.6% 36.6%
4 19.5% 21.4% 22.2% 24.4% 26.1% 23.6%
5 15.1% 8.1% 7.8% 11.3% 6.3%
6 0.2% 3.6% 3.7% -1.3%
7 1.2% 3.4% -3.1%
70.2%
33.5%
22.9%
9.7%
1.5%
0.3%
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1 71.1% 71.3% 72.9% 70.1% 72.6% 64.4% 71.0% 74.0% 70.3% 70.9%
2 61.5% 62.4% 65.6% 53.1% 67.3% 67.0% 65.9% 66.5%
3 57.8% 52.1% 57.8% 57.6% 53.9% 61.0% 53.3%
4 38.9% 43.8% 40.6% 33.3% 38.4% 40.7%
5 43.4% 39.0% 41.1% 38.9% 41.0%
6 42.0% 41.2% 40.3% 40.0%
7 38.9% 38.7% 36.9%
63.7%
56.2%
39.7%
39.9%
39.5%
38.6%
Year 2003 2004 2005 2006 2007 2008 2009
1 19.9% 17.6% 20.4% 20.4% 19.8% 16.4% 17.9%
2 17.1% 18.0% 17.9% 19.0% 17.6% 18.4% 19.2%
3 16.4% 17.4% 17.0% 18.0% 18.0% 16.9% 17.4%
4 13.9% 14.1% 14.5% 12.7% 13.0% 13.4%
5 12.9% 14.5% 13.2% 14.4% 13.6%
6 13.9% 13.7% 13.2% 14.2%
7 13.6% 13.9% 15.1%
8 1.0% 0.0%
8 36.6% 40.2%
8 11.7% 13.0%
Advertising
2010 2011 Average
20.7% 20.9% 19.3%
19.4% 18.3%
17.3%
13.6%
13.6%
13.5%
13.4%
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1 9.9% 10.3% 10.9% 10.3% 10.2% 10.2% 11.0% 11.7% 10.7% 10.6%
2 8.9% 8.2% 8.9% 8.4% 9.0% 9.6% 9.1% 8.9%
3 7.6% 8.3% 8.0% 8.3% 8.1% 8.3% 8.6%
4 7.1% 7.4% 7.6% 6.8% 6.9% 7.3%
5 6.7% 8.0% 7.0% 6.8% 7.1%
6 7.7% 7.7% 6.7% 6.6%
7 6.9% 7.2% 7.3%
8.9%
8.2%
7.2%
8 6.8% 7.2%
9 -0.6%
9 40.0%
9 13.1%
9 7.6%
Exhibit 9: Forecasting Investment Accounts Receivable
Inventory
Accounts Payable
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1 36.5% 34.4% 32.8% 32.6% 31.2% 32.9% 33.7% 31.8% 32.6% 32.4%
2 31.6% 32.5% 33.1% 31.2% 31.0% 34.0% 33.5% 33.7%
3 31.9% 33.2% 31.8% 33.8% 32.3% 30.5% 33.6%
4 32.1% 33.5% 29.7% 33.8% 31.3% 31.4%
5 32.2% 34.2% 31.3% 32.0% 32.0%
6 30.9% 34.6% 31.7% 33.8%
7 31.0% 32.5% 32.4%
8 29.7% 31.9%
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1 45.9% 43.4% 47.2% 45.6% 46.7% 50.1% 47.8% 45.5% 45.3% 47.6%
2 47.2% 48.3% 48.3% 58.0% 42.2% 49.4% 53.4% 50.7%
3 44.0% 54.5% 40.6% 48.8% 53.0% 48.6% 46.7%
4 50.4% 46.4% 46.8% 59.3% 48.1% 45.9%
5 42.4% 47.3% 43.4% 50.4% 45.5%
6 42.4% 45.6% 44.9% 49.2%
7 44.3% 48.5% 48.2%
8 50.3% 47.3%
Year 2003 2004 2005 2006 2007 2008 2009
1 16.1% 16.1% 15.4% 16.1% 15.5% 17.0% 16.8%
2 17.2% 16.9% 16.1% 19.8% 16.8% 15.8% 15.8%
3 14.8% 18.0% 15.2% 16.0% 16.5% 15.0% 17.3%
4 16.9% 15.6% 16.2% 19.1% 17.3% 15.6%
5 14.6% 17.0% 16.2% 16.3% 15.2%
6 15.2% 16.3% 15.9% 16.7%
7 15.7% 16.8% 17.3%
8 17.2% 15.9%
Accrued Expenses
Construction costs
2010 2011 Average
15.6% 16.4% 16.3%
16.4%
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
1 4.7% 5.1% 4.6% 4.6% 4.6% 5.1% 5.2% 4.5% 4.4% 4.8%
2 5.1% 5.1% 4.7% 4.7% 5.0% 5.0% 4.8% 4.7%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Nominal 20.8 22.3 24.5 28.2 30.6 29.8 27.2 25.6 25.9 26.4 26.9 27.4 27.9
Real 25.9 26.8 28.6 32.0 33.5 32.6 28.9 26.8 26.4 26.4 26.4 26.4 26.4
Nominal
Real
3 4.9% 4.9% 4.8% 4.8% 4.6% 4.8% 4.7%
4 4.7% 4.9% 4.4% 5.0% 4.8% 4.9%
5 4.9% 4.7% 5.2% 4.7% 4.8%
6 4.5% 4.7% 5.0% 4.7%
7 4.6% 4.8% 4.6%
8 5.2% 4.9%
Refresh cost
2003 2004 Average
90.6% 79.6%
74.0% 66.0% 70.0%
9 31.5%
9 42.5%
9 15.3%
9 4.7%
Exhibit 10: Forecasting Parameters 1 Sales growth CGS (% sales) SGA (% sales, excluding dep & advertising) Advertising (% sales) Accounts Receivable (% sales) Inventory (% next year's CGS) Accounts Payable (% next year's CGS) Accrued expenses (next year's SGA adv) Depreciation (years) Refresh cost Corporate tax rate Corporate expenses Discount rate Long-term growth rate Shares outstanding (K)
70.9% 19.3% 10.6% 32.4% 47.6% 16.3% 4.8% 5 70.0% 40.0% 5.0% 12.1% 3.5% 9,945
2 70.2% 63.7% 18.3% 8.9%
3 33.5% 56.2% 17.3% 8.2%
4 22.9% 39.7% 13.6% 7.2%
5 9.7% 39.7% 13.6% 7.2%
6 1.5% 39.7% 13.6% 7.2%
7 0.3% 39.7% 13.6% 7.2%
Teuer Furniture Pro Forma Income Statement Sales CGS SGA (exc adv & dep) Advertising Depreciation Lease (stores) Corp Expense (inc lease/adv) Tax calculation Tax loss carry forwards Taxes Net income Parameters: Corporate tax rate Corporate expenses
2012 148,218 -61,955 -21,253 -10,744 -1,450 -9,320 -7,411 -14,434 0 -14,434 21,651
40% 5%
2013 165,028 69,809 23,296 12,238 1,084 10,719 8,251
2014 181,941 76,952 25,691 13,464 1,373 11,915 9,097
2015 199,623 83,512 28,136 15,061 1,959 12,724 9,981
2016 217,575 87,805 30,421 16,596 2,631 13,497 10,879
2017 231,545 91,925 32,112 17,674 2,559 13,825 11,577
2018 242,363 96,219 33,277 18,247 2,178 14,267 12,118
2019 251,183 99,721 34,161 18,882 1,828 14,516 12,559
15,852 23,778
17,380 26,069
19,300 28,950
22,298 33,447
24,749 37,124
26,423 39,634
27,807 41,710
Teuer Furniture Pro Forma Balance Sheet 2012
2013
2014
2015
2016
2017
2018
48,200 33,343 81,543 0 3,920 85,463
53,469 35,407 88,876 17,226 5,203 111,305
61,843 38,754 100,597 29,982 7,155 137,734
67,657 41,116 108,772 49,198 9,310 167,281
73,555 43,756 117,311 76,905 7,440 201,656
78,158 45,800 123,959 110,055 5,203 239,216
81,736 47,467 129,203 146,624 3,641 279,469
11,364 1,682 13,046 0 72,417 85,463
12,247 2,862 15,109 0 96,196 111,305
12,772 2,698 15,469 0 122,265 137,734
13,449 2,617 16,066 0 151,215 167,281
14,462 2,531 16,994 0 184,662 201,656
15,085 2,345 17,430 0 221,786 239,216
15,632 2,417 18,049 0 261,420 279,469
Assets Accounts Receivable Inventory Total Current Assets Cash (balance) PPE Total Assets Liabilities and Equity Accounts Payable Accrued Expenses Total Current Liabilities Debt Equity Total Liabilities and Equity Balance sheet check (A=L+E)
Teuer Furniture Pro Forma Cash Flow Assets Sales - Costs - Taxes Net income - Capital expenditure + Depreciation - Increase in NWC Cash flow assets
PV Terminal value Asset value Share value Parameters: Asset discount rate Long-term growth rate Shareholders (#) Shares outstanding (K)
2012 148,218 -112,132 -14,434 21,651 -2,229 1,450 -8,365 12,508 1 12,508.10 ₹ 328,148.97 ₹ 440,109.09 328,149 33.00
12.1% 3.5% 187 9,945
2013 165,028 -125,398 -15,852 23,778 -2,367 1,084 -5,269 17,226 0.89 15,367.05
2014 181,941 -138,492 -17,380 26,069 -3,325 1,373 -11,361 12,756 0.80 10,150.53
2015 199,623 -151,373 -19,300 28,950 -4,114 1,959 -7,579 19,216 0.71 13,641.07
2016 217,575 -161,829 -22,298 33,447 -761 2,631 -7,610 27,707 0.63 17,545.66
2017 231,545 -169,672 -24,749 37,124 -322 2,559 -6,212 33,149 0.56 18,726.10
2018 242,363 -176,306 -26,423 39,634 -616 2,178 -4,626 36,569 0.50 240,210.5
2012 TCA 81,543 TCL 13,046 WC 68,497 Increase in NWC
2013 88,876 15,109 73,766 5,269
2014 100,597 15,469 85,128 11,361
2015 108,772 16,066 92,707 7,579
2016 117,311 16,994 100,317 7,610
2017 123,959 17,430 106,528 6,212
2018 129,203 18,049 111,154 4,626
