Do you agree with the existing financial assumptions in the Deutsche Bank forecast? If so, why? If
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Do you agree with the existing financial assumptions in the Deutsche Bank forecast? If so, why? If not, what adjustments would you make to the model? Defend the basis of your forecast for Whole Foods’ performance.
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Ready M P24 D C E B 1 Exhibit 7 2 WHOLE FOODS MARKET 3 Deutsche Bank Model (millions of USD, except per share figures) 4 Actual Actual Actual 5 2012 2011 2013 6 At Fiscal Year End 4.0% 7.7% 8.1% Store Growth 7 12.2% 15.7% 10.4% Sales Growth 8 8.5% EBITDA Margin 9.0% 9.5% 9 38.1% Tax Rate 38.4% 38.8% 10 11 Current Asset Turnover 12 7.0 5.6 6.5 13 Current Liabilities Turnover 10.5 10.9 10.7 Net PP&E / Store 14 6.4 6.5 6.7 15 Annual Dep. & Amort. / Store 1.00 0.93 0.94 16 17 Stores 311 335 362 400 450 18 Sales 10,108 11,699 12,917 14,351 16,360 19 EBITDA 859 1,055 1,222 1,352 1,600 20 Dep. & Amort. 311 311 339 376 423 21 EBIT 548 744 883 976 1,176 22 209 286 343 381 459 23 Net Income 339 458 540 596 717 24 Shares Outstanding 350 364 372 372 372 25 Earnings per Share 0.97 1.26 1.45 1.60 1.93 26 27 Current Assets 1,453 2,103 1,980 2,050 2,304 28 Current Liabilities 880 977 1,088 1,238 1,406 29 Net Working Capital 573 1,126 892 812 898 30 Net PP&E 1,997 2,193 2,428 2,680 3,018 31 32 Return on Capital 13.2% 13.8% 16.3% 17.1% 18.3% 33 34 Source: Company Financial Reports, Deutsche Bank Analyst report and casewriter estimates 35 36 37 Title Page Exh 1 Exh 2 Exh 3 Exh 4 Exh 5 Taxes fx F G H Forecast Forecast 2014 2015 10.5% 12.6% 11.1% 14.0% 9.4% 9.8% 39.0% 39.0% 7.0 7.1 10.5 10.5 6.7 6.7 0.94 0.94 Exh 6 1 Exh 7 Ready M P24 D C E B 1 Exhibit 7 2 WHOLE FOODS MARKET 3 Deutsche Bank Model (millions of USD, except per share figures) 4 Actual Actual Actual 5 2012 2011 2013 6 At Fiscal Year End 4.0% 7.7% 8.1% Store Growth 7 12.2% 15.7% 10.4% Sales Growth 8 8.5% EBITDA Margin 9.0% 9.5% 9 38.1% Tax Rate 38.4% 38.8% 10 11 Current Asset Turnover 12 7.0 5.6 6.5 13 Current Liabilities Turnover 10.5 10.9 10.7 Net PP&E / Store 14 6.4 6.5 6.7 15 Annual Dep. & Amort. / Store 1.00 0.93 0.94 16 17 Stores 311 335 362 400 450 18 Sales 10,108 11,699 12,917 14,351 16,360 19 EBITDA 859 1,055 1,222 1,352 1,600 20 Dep. & Amort. 311 311 339 376 423 21 EBIT 548 744 883 976 1,176 22 209 286 343 381 459 23 Net Income 339 458 540 596 717 24 Shares Outstanding 350 364 372 372 372 25 Earnings per Share 0.97 1.26 1.45 1.60 1.93 26 27 Current Assets 1,453 2,103 1,980 2,050 2,304 28 Current Liabilities 880 977 1,088 1,238 1,406 29 Net Working Capital 573 1,126 892 812 898 30 Net PP&E 1,997 2,193 2,428 2,680 3,018 31 32 Return on Capital 13.2% 13.8% 16.3% 17.1% 18.3% 33 34 Source: Company Financial Reports, Deutsche Bank Analyst report and casewriter estimates 35 36 37 Title Page Exh 1 Exh 2 Exh 3 Exh 4 Exh 5 Taxes fx F G H Forecast Forecast 2014 2015 10.5% 12.6% 11.1% 14.0% 9.4% 9.8% 39.0% 39.0% 7.0 7.1 10.5 10.5 6.7 6.7 0.94 0.94 Exh 6 1 Exh 7
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