Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018. $ millions Sales NOPAT NOA Forecast Horizon Period Reported 2018 2019 2020 2021 2022 $99,547 $106,515 $113,971 $121,949 $130,485 $133,095 Terminal Period 11,107 11,930 12,765 13.658 14,614 14,907 23,502 25,145 26,905 28,789 30,804 31,420 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $25,230 million. Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round until your final answer; round your final answer to two decimal places. Stock price per share: $ 0 x b. Home Depot stock closed at $174.86 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price?

Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018. $ millions Sales NOPAT NOA Forecast Horizon Period Reported 2018 2019 2020 2021 2022 $99,547 $106,515 $113,971 $121,949 $130,485 $133,095 Terminal Period 11,107 11,930 12,765 13.658 14,614 14,907 23,502 25,145 26,905 28,789 30,804 31,420 Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $25,230 million. Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round until your final answer; round your final answer to two decimal places. Stock price per share: $ 0 x b. Home Depot stock closed at $174.86 on March 28, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What are the firm's days' sales outstanding for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 $1,265 | Cash $780 Short-Term investments $92 | Accounts rec. Sales Revenue $1,180 $35 $20 $660 $20 $5 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $75 190 235 $50 Inventory $343 Total Current Assets $40 250 300 $405 $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $94 $77 Total assets $1,485 1,665 Net income $141 $116 Liabilities and Owner's Equity Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $78 $64 Accounts payable $125 $100 Accruals $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt 598 790 Total Liabilities $768 $940 Common stock 554 498 Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665
Question: Calculate and interpret liquidity ratios Calculate the inventory turnover, days in inventory, Accounts receivable turnover and the Average Collection period for the years ending June 30, 2020, and 2019 for the Green Construction Supplies Company. Assuming that they have a 60-day credit policy, evaluate their accounts receivable management and recommend ways to improve it. Evaluate their inventory management and suggest ways to improve it. Selected information ($) 2020 2019 2018 Net Sales (80% on credit) 430,000 720,000 640,000 Cost of Goods Sold 250000 350000 320000 Accounts Receivable 220,000 110,000 76,000 Allowance for doubtful accounts 35000 18000 14000 Bad debt expense 30000 12000 9000 Inventory 150000 100000 80000
Inventory Turnover Calculate the company's inventory turnover for 2020 and compare the result to the industry average.
(Profitability Ratio)What is the Net Profit Margin Ratio in 2020?
2021 2020 2019 2018 2017 Sales $703,787 $ 463,018 $370,414 $256,342 $191,300 Cost of goods sold 361,331 237,839 192,311 132,684 97,563 Accounts receivable 33,993 27,133 25,299 14,996 13,066 Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable.
(Profitability Ratio)What is the Return on Investment Ratio in 2019?
using the report given,provide and comment on the following: You meed to analyse the items under the consolidated statement of profit or loss both years 2019 and 2020. Provide an analysis using this part.
FAREnterprises Inc. Income Statements 2016 Leverage Calculations Calculate; The DOL 2019 2020 The DFL The DCL With both the interval method Years 2019 and 2020 and the Point method Years 2018, 2019, and 2020 Total Reverue Cost of Goods Sold 71,887 74,178 75, 387 55,a53 57.117 17,061 Gross Profit 16,534 17,339 Variable G&A 1,884 1,98 2,019 Fixed G&A 7,000 7,000 7,000 2020 1,500 650 Fined Depreciation 1500 1,500 Point Method 2018 2019 Fied Hent 650 650 DAL Operating Expenses 11,034 11.169 DOL 11,148 5,500 2,000 EBIT 5,913 6,170 DCL interest Espense 2,000 2,000 famings llefore Taxes 3,500 3,913 4,170 2020 1,668 2,500 Interval Method 2019 1,400 2,100 Income Tax Expense 1,565 2.348 DFL Net income DOL Tax late 40% DCL Share Data 10000 10000 10000 Basic Shares 0.21 0.23 0.25 Basic EPS
Here are the abbreviated financial statements for Planners Peanuts: Income Statenent, 2019 $3,980 1,540 Salea Costa Net income $2,440 Balance Sheet, Tear-End 2018 2019 2019 2018 $ 950 $1,180 Equity 2,280 2,020 $3,230 $3,200 Assets $3,230 $3,200 Debt Total $3,230 $3,200 Total If sales increase by 22% in 2020, and the company uses a strict percentage-of-sales planning model (meaning that all items on the Income and balance sheet also increase by 22%), what must be the balancing item? The balancing iten is (Cick to select) What will be Its value? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Value of the balancing item
Here are the abbreviated financial statements for Planner’s Peanuts: INCOME STATEMENT, 2019 Sales $ 5,000 Cost 3,900 Net income $ 1,100 BALANCE SHEET, YEAR-END 2018 2019 2018 2019 Assets $ 7,500 $ 12,100 Debt $ 833 $ 1,000 Equity 6,667 11,100 Total $ 7,500 $ 12,100 Total $ 7,500 $ 12,100 a. If sales increase by 10% in 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 10%), what must be the balancing item? b. What will be the value of this balancing item?
(Profitability Ratio)What is the Earnings Per Share in 2020?
Sales Cost of goods sold Accounts receivable Numerator: 2021 $ 446,762 225,881 21,623 Numerator: Compute trend percents for the above accounts, using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or unfavorable. Numerator: 1 1 1 1 1 1 1 2021: 2020: 2019: 2018: 2017: Is the trend percent for Net Sales favorable or unfavorable? 2020 $ 290,105 146,803 16,913 Trend Percent for Net Sales: 2019 $ 232,084 119,092 15,828 2021: 2020: 2019: 2018: 2017: Is the trend percent for Cost of Goods Sold favorable or unfavorable? Trend Percent for Cost of Goods Sold: 1 Denominator: 7 1 1 1 1 1 I 1 Denominator: Trend Percent for Accounts Receivable: Denominator: 1 1 1 1 2021: 2020: 2019: 2018: 2017: Is the trend percent for Accounts Receivable favorable or unfavorable? 2018 $ 167,570 84,885 9,820 = = = = = = = = = = 2017 $ 128,900 64,450 8,804 = Trend percent Trend percent Trend percent % % % % % % % % % % % % %…

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