As a securities analyst you have been asked to review a valuation of a closely held business, Wigwam Autoparts Heaven, Inc. (WAH), prepared by the Red Rocks Group (RRG). You are to give an opinion on the valuation and to support your opinion by analyzing each part of the valuation. WAH€™s sole business is automotive parts retailing. The RRG valuation includes a section called €œAnalysis of the Retail Autoparts Industry,€ based completely on the data in Table D and the following additional information:
€¢ WAH and its principal competitors each operated more than 150 stores at year-end 2009.
€¢ The average number of stores operated per company engaged in the retail autoparts industry is 5.3.
€¢ The major customer base for autoparts sold in retail stores consists of young owners of old vehicles. These owners do their own automotive maintenance out of economic necessity.

a. One of RRG€™s conclusions is that the retail autoparts industry as a whole is in the maturity stage of the industry life cycle. Discuss three relevant items of data from Table D that support this conclusion.
b. Another RRG conclusion is that WAH and its principal competitors are in the consolidation stage of their life cycle.
i. Cite three relevant items of data from Table D that support this conclusion.
ii. Explain how WAH and its principal competitors can be in a consolidation stage while their industry as a whole is in the maturitystage.

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2009 2008 2007 2006 2005 2004 2003 2000 1999 1998 Population 18-29 years old (percentage change) Number of households with income more than $35,000 (percentage change) Number of households with income less than $35,000 (percentage change) Number of cars 5-15 years old (percentage change) Automotive aftermarket industry retail sales (percentage change) Consumer expenditures on automotive parts and accessories (percentage change) Sales growth of retail autoparts companies with 100 or more stores Market share of retail autoparts companies with 100 or more stores -1.8% -2.0% -2.1% -1.4% -0.8% -0.9% -1.1% -0.9% -0.7% -0.3% 6.0% 4.0% 8.0% 4.5% 2.7% 3.1% 1.6% 3.6% 4.2% 2.2% 3.0% 0.9% 5.7% -1.0% -1.3% 1.9% 4.9% -6.0% 3.1% 2.3% 1.9% 3.7% -1.4% 3.3% 4.3% 2.5% 2.4% 2.6% 1.4% -2.3% 1.3% -1.3% -2.2% 0.2% 0.6% -8.0% 3.7% 0.1% 1.6% 2.4% 2.4% 1.8% 2.1% 6.5% 3.6% 9.2% 1.3% 62% 6.7% 6.5% 17.0% 16.0% 16.5% 14.0% 15.5% 16.8% 12.0% 15.7% 19.0% 16.0% 19.0% 18.5% 18.3% 18.1% 17.0% 17.2% 17.0% 16.9% 15.0% 14.0% Average operating margin of retail autoparts companies with 100 or more stores 12.0% 11.8% 11.2% 11.5% 10.6% 10.6% 10.0% 10.4% 9.8% 9.0% Average operating margin of all retail autoparts companies 5.5% 5.7% 5.6% 5.8% 6.0% 6.5% 7.0% 7.2% 7.1 % 7.2% Table D