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Valuation of Dillards Company:You have been hired as new analyst at Financial Services and have been asked to demonstrate your finance skills that you learned in the college. You have been assigned to James Thomas who is one of the top portfolio managers of the company. Your first assignment is to analysis Dillards department stores and recommend a buy/or sell price to Thomas. To value the company, you decided to use the two widely valuation models that you learned in your classes- discounted free cash flows and relative valuation based on comparable companies. However, you remembered that your instructor had told the class that these two valuation methods would result in widely different prices.

10 year bond %(risk free rate)	0.729
Market Cap	809.61M
Enterprise Value	1.15B
Beta	1.34
Profit Margin	1.75%
ROA	2.91%
ROE	6.73%
Revenue	6.34B
Revenue per share	250.09%
Gross Profit	2.11B
EBITDA	383.19M
Net Income	111.08M
Total Cash	277.08M
Cash Per Share	11.85
Total Debt	37.88
Current Ratio	1.99
BV per share	67.09
OCF	365.07M
Levered Free cash flow	252.41M
Float	7.66M

	TTM	2020	2019	2018
Total Revenue	6,343,211	6,343,211	6,503,349	6,503,349
Cost of Revenue	4,235,978	4,235,978	4,291,520	4,199,718
Gross Profit	2,107,233	2,107,233	2,211,829	2,222,958
Operating Expenses
Selling General and Administrative	1,717,392	1,717,392	1,719,826	1,720,157
Total Operating Expenses	1,939,741	1,939,741	1,943,641	1,951,752
Operating Income or Loss	167,492	167,492	268,188	271,206
Interest Expense	46,541	46,541	52,571	62,096
Total Other Income/Expenses Net	12,626	12,626	-7,708	4,063
Income Before Tax	133,891	133,891	207,962	212,689
Income Tax Expense	22,810	22,810	37,730	-7,800
Income from Continuing Operations	111,081	111,081	170,263	221,324
Net Income	111,081	111,081	170,263	221,324
Net Income available to common shareholders	111,081	111,081	170,263	221,324
Basic EPS		4.38	6.23	7.51
Diluted EPS		4.38	6.23	7.51
Basic Average Shares		25,364	27,300	29,500
Diluted Average Shares		25,364	27,300	29,500
EBITDA		404,741	486,382	508,468

Section 1-Discounted Cash flow Valuation: To value the stock using discounted cash flow model estimate the last three-year averages of the following ratios:

EBIT/Sales

Tax Rate Property and Equipment

Depreciation as a percent of property and equipment

Net Working Capital

Forecast future sales for the next five years. Using the forecasted sales estimate, the ratios of section-1 for the next five years.

Growth Estimates DDS Current Qtr. -73.40% Next Qtr. -25.90% Current Year -74.70% Next Year 182.20% Next 5 Years (per annum) -16.59% Past 5 Years (per annum) 1.50% Growth Estimates DDS Current Qtr. -73.40% Next Qtr. -25.90% Current Year -74.70% Next Year 182.20% Next 5 Years (per annum) -16.59% Past 5 Years (per annum) 1.50%