remaining part of ffull question

5 Assess X Recalci X Bega C X T Step 2 x > . Recak X Course X W9 Tu X 5 Web Tr X (Soluti X (Soluti x b how to X + -> C @ File | C:/Users/anjal/Downloads/Assessment%20Brief%203%20(3).pdf E Assessment Brief 3 (3).pdf 5 / 21 - 93% + TABLE 8.2 Forecasted financial statement for Bega Cheese Prior Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Income statement ($'000) Sales 1015 318 1066 084 1 098 066 1 131 008 1 164 939 1 194 062 1 223 914 1 254 512 1 279 602 1 305 194 1 331 298 Net operating profit after tax 31 983 32 942 33 930 34 948 35 822 36 717 37 635 38 388 39 156 39 939 Net interest expense after tax 4 440 4 665 4 899 5143 5 371 5 607 5 852 6 076 6 306 6 543 2 Not income 27 542 28 277 29 031 29 805 30 451 31 110 31 783 32 312 32 850 33 396 - Preferred dividends 29 805 30 451 31 110 31 783 32 312 32 850 33 396 Net income to common 27 542 28 277 29 031 Beginning balance sheet ($'000) 95 948 101 791 104 844 107 466 110 152 112 906 115 164 117 467 119 817 Beg. net working capita 91 159 98 826 291 235 298 516 305 978 313 628 319 900 326 298 332 824 + Beg. net long-term assets 257 459 266 521 274 517 282 752 105 981 416 131 426 534 435 065 443 766 452 641 = Net operating assets 348 618 362 469 373 343 384 543 396 079 123 993 128 692 133 529 3 Net debt 90 617 95 202 99 981 104 961 109 615 114 436 119 429 Preference shares 296 366 301 695 307 104 311 071 315 074 319 112 Opening equity 271 851 278 140 284 562 291 118 Equity injections needed 405 981 416 131 426 534 435 065 443 766 452 641 = Net capital (beginning) 362 469 373 343 384 543 396 079 30 451 31 110 31 783 32 312 32 850 33 396 + Profit 27 542 28 277 29 031 29 805 (11 855) (12 068) (12 284) (12 443) (12 603) (12 764) - Div. distributions (10 874) (11 126) (11 382) (11 645) (13 268) (13 633) (15 532) (15 867) (16 209) (13 389) +/- Equity issues 9 899 (10 379) (10 730) (11 092) (12 912) 301 695 307 104 311 071 315 074 319 112 326 354 = Closing equity 271 851 78 140 284 562 291 118 296 366 416 131 426 534 435 065 443 766 452 641 466 220 = Net capital (closing) 373 343 384 543 396 079 405 981 Ratios 3.8% 8.8% 8.8% 8.8% 8.8% 8.8% Operating retum on assets (%) 8.8% 8.8% 8.8% 8.8% 10.3% 10.3% 10.3% 10.4% 10.4% 10.5% Roturn on equity (To 10.1% 10.2% 10.2% 10.2% 2.5% 2.5% 2.5% 2.0% 2.0% 2.0% Book value of assets growth (%%) 4.0% 3.0% 3.0% 3.0% 1.8% 1.8% 1.3% 1.3% 1.3% 2.3% Book value of equity growth (%) 2.3% 2.39% 2.3%% 1.8% 2.9 2.9 2.9 2.9 2.9 2.9 Net operating asset turnover 2.9 29 29 2.9 5 (Continued) 2:02 PM Search for anything O Eli OLAB 9 W 17 CA O ENG 19/05/20215 Assess X Recalci X Bega C X T Step 2 x > . Recak X * Course X W9 Tu X 5 Web Tr X (Soluti X (Soluti x b how to X + -> C @ File | C:/Users/anjal/Downloads/Assessment%20Brief%203%20(3).pdf E Assessment Brief 3 (3).pdf 6 / 21 - 93% + = Net capital (closing) 373 343 384 543 396 079 405 981 Ratios 8.89 8.8% 8.8% 8.8% 8.8% 8.8% Operating return on assets (%) 8.8% 8.8% 8.8%% 8.8% 10.3% 10.3% 10.3% 10.4% 10.4% 10.5% Roturn on equity (76) 10.1% 10.2% 10.2% 10.2% 2.5% 2.5% 2.5% 2.0% 2.0% 2.0% Book value of assets growth (%%) 4.0% 3.0% 3.0% 3.0% 1.8% 1.8% 1.3% 1.3% 1.3% 2.3% Book value of equity growth (%) 2.3% 2.3% 2.3% 1.8% 2.9 2.9 2.9 2.9 2.9 2.9 Net operating asset turnover 2.9 29 29 2.9 (Continued) 3 Assessment Brief ABN 49 003 577 302 CRICOS Code: 00161E RTO Code: 90458 Version 2: 11" October, 2019 Page 5 of 21 TEQSA Provider Number: PRV12051 TABLE 8.2 Forecasted financial statement for Bega Cheese (continued) Prior Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cash flows 5 Net income 27 542 28 277 29 031 29 805 30 451 31 110 31 783 32 312 32 850 33 396 - Change in net working capital (2 878) (2 965) (3 054) (2621) (2 687) (2 754) (2 258) (2 303) (2 349) (3 595) Change in net long-term assets 7 906 (8 235) (8 483) (7 281 (7 463) (7 649) (6 273) (6 398) (6 526) (9 985) Change in net debt 4 585 4 779 4 980 4 654 4 821 4 994 4 564 4 699 4 837 6 337 = Free cash flow to equity 21 253 21 856 22 475 24 557 25 122 25 700 27 817 28 310 28 812 26 154 Net operating profit after tax 31 983 32 942 33 930 34 948 35 822 36 717 37 635 38 388 39 156 39 939 6 10 070 12 754 2 5051 Search for anything O Eli 9 W 2:03 PM 17.C ENG 19/05/20215 Assess X Recalci X Bega C X T Step 2 x > . Recak X Course X W9 Tu X Web Tr X (Soluti X (Soluti x b how to X + -> C @ File | C:/Users/anjal/Downloads/Assessment%20Brief%203%20(3).pdf E Assessment Brief 3 (3).pdf 6 / 21 - 93% + TABLE 8.2 Forecasted financial statement for Bega Cheese (continued) Prior Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cash flows Net income 27 542 28 277 29 031 29 805 30 451 31 110 31 783 32 312 32 850 33 396 3 Change in net working capital (2 878) (2 965) (3 054) (2 621) (2 687) (2 754) (2 258) (2 303) (2 349) (3 595) Change in not long-term assets 7 996) (8 235) (8 483) 7 281) (7 463) (7 649) (6 273) (6 398 (6 526) (9 985) Change in net debt 4 585 4 779 4 980 4 654 4 821 4 994 4 564 4 699 4 837 6 337 = Free cash flow to equity 21 253 21 856 22 475 24 557 25 122 25 700 27 817 28 310 28 812 26 154 Net operating profit after tax 31 983 32 942 33 930 34 948 35 822 36 717 37 635 38 388 39 156 39 939 Change in net working capital (2 878) (2 965) (3 054) (2621) (2 687) (2 754) (2 258) (2 303) (2 349) (3 595) Change in net long-term assets (7 996) (8 235) (8 483) 7 281) (7 463) (7 649) (6 273) (6 398) (6 526) (9 985) = Free cash flow to capital 21 108 21 742 22 394 25 046 25 672 26 314 29 105 29 687 30 280 26 360 TABLE 8.3 Performance forecasts for Bega Cheese for the fiscal years 2014 to 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 Equity valuation Abrormal camings 3184 3 356 3 534 3721 3 896 4 078 4 267 4 440 4 619 4 804 Abnormal ROE (98) 1.2%% 1.2% 1.2% 1.3% 1.3% 1.4% 1.4% 1.4% 1.5% 1.5% Free cash flows to equity 21 253 21 856 22 475 24 557 25 122 25 700 27 817 28 310 28 812 26 154 Equity discount factor 0.9178 0.8423 0.7730 0.7095 0.651 0.5976 0.5484 0.5033 0.4620 0.4240 6 Equity growth factor 1.00 1.02 1.05 1.07 1.08 1.10 1.12 1.13 1.15 1.17 2:03 PM Search for anything O OLABAJO 9 W 17'C A D () ENG 19/05/20215 Assess X Recalci X Bega C X T Step 2 x > . Recak X * Course X W9 Tu X 5 Web Tr X (Soluti X (Soluti x b how to X + -> C @ File | C:/Users/anjal/Downloads/Assessment%20Brief%203%20(3).pdf E Assessment Brief 3 (3).pdf 7 / 21 93% + Requirements : You need to forecast Bega Cheese's condensed income statement, beginning balance sheet and free cash flows for a period of 10 years starting in fiscal year 2014 (year beginning July 2013). You will use forecasting assumptions and financial forecasts, which are repeated here in Tables 8.1 and 8.2, as a starting point to value Bega Cheese as of July 2013. Specifically , you are required to : 1. Calculate/recalculate( using given excel sheets: Requirement 1 Calculation sheet , Requirement 2 Calculation sheet , Requirement 3 Calculation sheet , Requirement 5 Calculation sheet ) according to the following assumptions provided in the questions. 2. answer the following 5 (five) questions in a report 1. How will the forecasts in Table 8.2 change if Bega Cheese to maintain a sales growth rate of 6% per year from 2014 to 2023 (and all the other assumptions are kept unchanged)? Use : Requirement 1 Calculation sheet 2. Recalculate the forecasts in Table 8.2 assuming that the NOPAT profit margin is held steady for the first five years of the forecast and then declines by 0.1 percentage points per year thereafter (keeping all the other assumptions unchanged). Use : Requirement 2 Calculation sheet 3. Recalculate the forecasts in Table 8.3 assuming that the ratio of net operating working capital to sales is 10% and the ratio of net long- term assets to sales is 30% for all the years from fiscal 2014 to fiscal 2023. Keep all the other assumptions unchanged. Use : Requirement 3 Calculation sheet 6 4. Calculate Bega Cheese's cash payouts to its shareholders in the years 2014-23 that are implicitly assumed in the projections in Table 8.2. Show detail calculations in a table 5. How will the abnormal earnings calculations in Table 8.3 change if the cost of equity assumption is changed to 10%? Use : Requirement 5 Calculation sheet Kent Institute Australia Pty. Ltd. Assessment Brief ABN 49 003 577 302 CRICOS Code: 00161E RTO Code: 90458 Version 2: 11" October, 2019 Page 7 of 21 TEQSA Provider Number: PRV12051 2:03 PM Search for anything O 9 17.C ENG 19/05/20215 Assess X Recalci X Bega C X T Step 2 x > . Recak X * Course X W9 Tu X 5 Web Tr X (Soluti X (Soluti x b how to X + -> C @ File | C:/Users/anjal/Downloads/Assessment%20Brief%203%20(3).pdf C E Assessment Brief 3 (3).pdf 8 / 21 - 93% + Format of the Report You at least should have the following details: a Assignment Cover page clearly stating group members' name and student ID Numbers A table of contents, executive summary A brief introduction or overview of what the report is about. Body of the report with the answers of the above questions ( Question 1 -5) e . Conclusion Diagrams and tables clearly labelled and explained. 6 ASSESSMENT SUBMISSION: This assessment is a group activity and students are required to work with their respective groups. No individual submission will be accepted. You will not receive any marks for this assignment if your group members collectively report against you for nonparticipation or non-cooperation. You have to nominate someone as your group leader to coordinate the assignment submission. The assignment must be submitted online in Moodle and Turnitin. All materials MUST be submitted electronically in Microsoft Word format. Other formats may not be readable by markers. Please be aware that any assessments submitted in other formats will be considered LATE and will lose marks until it is presented in MS 7 Word. No paper based or hardcopy submission will be accepted. Our Academic Learning Support (ALS) team would be happy to help you with understanding the task and all other assessment-related matters. For assistance and to book one-on-one meeting please email one of our ALS coordinators (Sydney ALS_SYD@kent.edu.au; Melbourne ALS_MELB@kent.edu.au ). For online help and support please click the following link and navigate Academic Learning Support in Moodle. http://online.kent.edu.au/cms/course/view.php?id=437 8 Kent Institute Australia Pty. Ltd. 9 2:03 PM Search for anything O Eli O LAB JO W 17.C ENG 19/05/2021