Debt is in the case study

MBA 830 Unit 3 Case Study Appendix A MBA 830 UNIT 3 CASE STUDY The owner of a private firm has requested that you estimate the value of the fim so that it can be markcted for sale. The firm creates custom, made-to-order furniture. The firm's most recent Furniture Company Incone & FCF Amalysis (S in thousands) results are shown in Appendix A Most Recent Management expects revenues, cost of goods sold, operating expenses,depreciation (and amortization, and capital expenditures to grow 20% annually for the next five year remaining at 40% for each year. Balance sheet items in the most recent year include Sio million of outstanding, interest-bearing debe and $10 million book value of equity. The outstanding debe with taxes 5 20,000 Cost of Goods Sold is expected to remain constant for this analysis, and management anticipates no changes in 15 working capital. Frec cash flows are estimated to grow at 5% after de five year period Industry averages for market value of equity are thretims book valuc,for beta are 1.30, and Sor Gross Profit Margin the Treasury bond rate is assumed to be 7%. Profit Margin 4,500 22.5% 2,000 500 General Operating Expenses Based on this information and the information covered in Unit 3, prepare a DCF and Market Multiple analysis (in Excel) to help the owner etimate firm value. Please make sure to include Depreciation & your calculations for the following items: Total Operating Expenses Annaal Free Cash Flows Interest Expenses 1,000 . Cost of deb .Cost of equity Incoene before Taxes WAC Terminal Value Firm Value, Debe Value, and Equity Valuc Tax Rate Would the owner prefer the DCF or Market Multiple approach to valsation? Why? Net lacomse Add: After Tax Interest Expense Less: Capital Expenditures Add: Depreciation Add: Decrease (Increase) in AR Add: Decrease (Increase) in Inv Add: Increase (Decrease) in AP $ 600 (1,000) 500 Unlevered Free Cash Flows MBA 830 Unit 3 Case Study Appendix A MBA 830 UNIT 3 CASE STUDY The owner of a private firm has requested that you estimate the value of the fim so that it can be markcted for sale. The firm creates custom, made-to-order furniture. The firm's most recent Furniture Company Incone & FCF Amalysis (S in thousands) results are shown in Appendix A Most Recent Management expects revenues, cost of goods sold, operating expenses,depreciation (and amortization, and capital expenditures to grow 20% annually for the next five year remaining at 40% for each year. Balance sheet items in the most recent year include Sio million of outstanding, interest-bearing debe and $10 million book value of equity. The outstanding debe with taxes 5 20,000 Cost of Goods Sold is expected to remain constant for this analysis, and management anticipates no changes in 15 working capital. Frec cash flows are estimated to grow at 5% after de five year period Industry averages for market value of equity are thretims book valuc,for beta are 1.30, and Sor Gross Profit Margin the Treasury bond rate is assumed to be 7%. Profit Margin 4,500 22.5% 2,000 500 General Operating Expenses Based on this information and the information covered in Unit 3, prepare a DCF and Market Multiple analysis (in Excel) to help the owner etimate firm value. Please make sure to include Depreciation & your calculations for the following items: Total Operating Expenses Annaal Free Cash Flows Interest Expenses 1,000 . Cost of deb .Cost of equity Incoene before Taxes WAC Terminal Value Firm Value, Debe Value, and Equity Valuc Tax Rate Would the owner prefer the DCF or Market Multiple approach to valsation? Why? Net lacomse Add: After Tax Interest Expense Less: Capital Expenditures Add: Depreciation Add: Decrease (Increase) in AR Add: Decrease (Increase) in Inv Add: Increase (Decrease) in AP $ 600 (1,000) 500 Unlevered Free Cash Flows