FIN3334 FedEx Company Historical Financial Statements you should base on the case study guide, complete the our data analysis，and Calculate the NOA and NOP

FIN3334 FedEx Company Historical Financial Statements you should base on the case study guide, complete the our data analysis，and Calculate the NOA and NOPAT and the complete the form like example. Case Study Grading
Points
Items to be included in spreadsheet:
(1 ) Include 5 years of historical balance sheets and income statements
2
(1a) All spreadsheet data should be easily read and easily navigated. It should
all be on one spreadsheet, so the reader need not travel back and forth
between numerous sources.
6
(1b) On spreadsheets, all cells should contain their formulas, so the reader
can see what items are included in a total.
6
(1c) All spreadsheet totals should add up.
4
(1d) Retained earning should reconcile from one year to the next. In other
words: beginning retained earnings plus net income minus dividends should
equal ending retained earnings.
4
(2) Project 5 years of future balance sheets and income statements
2
(2a) In your balance sheets, separate out operating cash from excess cash and
cash equivalents.
4
(2b) In your projected balance sheets, assume no change in excess cash or
non operating assets.
na
(2c) Consider this report a first pass; and assume that there is no change in
long term debt obligations, notes payable, common stock ir treasury stock.
That will make your free cash flow computation easier.
na
(2d) If you are projecting a change in deferred tax assets or deferred tax
liabilities, explain why you are projecting that change. (Remember that, in the
long run, deferred tax assets and deferred tax liabilities zero out, since they
are all based upon timing differences which will reverse.)
na
(2e) If you are projecting a change in non-operating assets explain why.
2
(2f) To make your projected liabilities and equity equal to your projected
assets, include a line item between your liability section and equity section
called Flexible Financing. Generally, this will represent cumulative additional
funds needed AFN. And if it is negative, it will generally indicate cumulative
free cash flow. Use the Flexible financing account as a balancing account.
5
(2g) Assume no change in Other Accumulated Comprehensive Income. This
account appears in the equity section of the balance sheet and represents the
unrealized gain or loss on marketable securities and foreign exchange. It is
only a temporary account and should zero out over time.
na
(3a) Compute free cash flow for all years.
25
(3b) Show the disposition of free cash flow in all years, both historical and
projected.
15
First Submission
75
Note: The first phase counts for 75 percent of your case study
grade. If you fail to score at least 30 out of 40 points on parts 3(a)
and 3(b), you will not be eligible to continue with the case study
assignment and your cumulative grade will be limited to points
earned to that point.
Additional items to be included in final report.
Respond to each of these questions in the final report, repeating the question
number and question before responding.
(4a) In the historical period, were there any acquisitions? And if so, were they
stock for stock, assets for stock, etc.?
1
(4b) Did another firm acquire shares in your company in the historical
period? And if so, were they stock for stock, or assets for stock, etc.?
1
(4c) If the firm is growing, is its growth real, or is it merely growth through
acquisition?
2
(5a) Justify your revenue projections and your gross margin assumptions.
na
(5b) Explain which costs are fixed and which costs are variable and which
costs have a fixed and variable component. If some of your costs are fixed,
then there will be economies of scale, and your profit margins should
improve.
na
(5c) If the provision for income tax differs significantly from 40 percent,
explain why the difference.
na
(6) Analyze the firm in terms of Porters Five Forces: In other words outline to
what extent the firm’s growth and profitability might be limited by (i) the
power of its consumers, (ii) competition from rival producers, (iii) potential
competition from new entrants into its market, (iv) the power of its input
suppliers, or (v) the existence of substitute goods.
na
(7) If your firm is in the technology sector, explain the firm’s position in its
industry. Is it a market leader? And if so, is it a market leader based upon its
technological advantage? And what must the firm do to remain a leader in its
industry?
2
(8) Are there any legal problems, or outstanding lawsuits pending, or lawsuits
which have recently been settled? Explain. And explain what impact that
might have on future results.
na
(9) Do a ratio analysis to compare your firm with 3 firms in its industry, but
only report key ratios, which may include PE ratio, ROE, ROA, net profit
margin, gross profit margin. A comparative Du Pont analysis might be
helpful. But do not report other ratios, unless there is a significant difference.
If your company is trading at a significantly higher PE ration than other firms
in its industry, is there an opportunity to make acquisitions on a stock for
stock basis? Identify potential acquisition targets.
na
(9a) Ratio comparisons should be presented in tables which are self
explanatory.
na
(9b) Ratio comparisons should not be presented in narrative form.
na
(10) If the firm is facing possible insolvency, explain. If there is a possibility of
insolvency, you may wish to compute break even point.
2
(11) If your Flexible Financing account has a large positive balance, indicating
AFN, outline your plan for how the company will arrange outside financing.
Will it borrow on a short term basis, issue long term debt, or sell additional
shares? And do you estimate any problem with arranging that necessary
financing?
na
(12) If your Flexible Financing account has a large negative balance,
indicating FCF, how will you use that FCF? Will you begin to pay dividends?
Buy back stock? Use the FCF for acquisitions?
na
(13) Place a value on the stock of your firm and support your computation.
5
(13a) Any computations, such as valuation, should be done in the form of
tables which are easy to read. Use the same format as the valuation tables in
PowerPoint lecture slides. Tables should be self-explanatory. In other words,
the reader should not be forced to search the document for missing
information. Tables should clearly state your assumptions.
3
(13b) A separate table should be presented to compute Horizon value.
2
(13c) And a second table should be presented incorporating the FCF of years 15, along with the Horizon value, to arrive at valuation.
3
(13d) Your valuation should approximate the current market value of the
stock. If it does not approximate the current market value of the stock, then
you need to rework your projected cash flows and Horizon values, in order to
come up with a reasonable valuation.
4
(14) If you quote any analyst or news source, show your sources. Do not
plagiarize, as plagiarism is a serious breach of the academic honor code.
2
Total points possible
102
Comments
Liabilities and equity should include FFA and
should agrre with total assets.
Ten days of sales is reasonable, in the absence
of any other estimate.
Many students increased their excess cash
holdings.
By projecting all expenses as a fixed percentage
of sales, you are assuming that all costs are
variable and that there is no fixed component.
Generally, students did a really good job on
Porter’s Five Forces.
Only applied to Apple and Samsung.
If the reader has to guess where the numbers
came from, or if he has to navigate all over the
spreadsheet to see where the numbers came
from,it is not easy to read.
Direct quotation need to be in quotation marks
with footnotes.
Historical and Projected Financia
Ralph Lauren Corp.
Period
Income Statement
Revenues:
Total revenues
Cost of goods sold
Gross profit
Operating Expenses:
Selling, general and administrative
Equity in earnings
Non-recurring items
Unreconciled Amt.
Interest expense, net
Pre-tax income
Income taxes
Net income
Balance Sheet
Assets
Cash and equivalents
Short-term investments
Accounts receivable, net
Inventories
Other current assets
Total current assets
Fixed assets (net)
Intangibles
Goodwill
Long-term investments
Other fixed assets
Total assets
Accounts payable
Accrued expenses
Short-term debt
Other current liabilities
Total current liabilities
Long-term debt
Other liabilities
2012
2013
2014
2015
6,860
2,862
3,998
6,945
2,789
4,156
7,450
3,140
4,310
7,620
3,242
4,378
2,916
(9)
12
33
13
1,015
334
681
2,971
(10)
12
58
16
1,089
339
750
3,142
(9)
19
27
17
1,096
320
776
3,301
(11)
17
51
11
987
285
702
672
516
547
842
324
2,900
884
359
1,004
100
130
5,416
974
325
458
896
310
2,963
932
328
968
81
124
5,418
797
488
588
1,020
436
3,329
1,322
299
964
500
644
655
1,042
483
3,324
1,436
267
903
135
6,088
131
6,106
181
147
664
267
43
1,121
203
690
0
77
970
298
786
210
715
234
27
1,186
298
731
0
766
946
274
543
512
Total liabilities
Additional Fund Needed – Cumulative
(Surplus)
Shareholders’ equity
Common Stock
Paid-in capital
Retained earnings
Treasury stock
Total Liabilities and Equity
1,764
1,633
2,054
2,215
0
0
0
0
3,653
198
1,624
4,042
(2,212)
3,785
95
1,752
4,647
(2,709)
4,034
115
1,979
5,257
(3,317)
3,891
(164)
2,117
5,787
(3,849)
6,088
6,106
5,416
5,418
The first step in computing FCF is to restate do a Pen
That means to break the BS down into Net operating
stakeholder claims.
Note that assets are treated as a negative (since they
and equity are treated as positive (since they represe
Total assets
Less non operating assets
Marketable securities (short term
Investment)
Operating liabilities
Accounts payable
Accruals
Short term debt
Other Current liabilities
Other non current liabilities
Net operating assets
Non operating assets
Book value of the firm
Additional Fund Needed – Cumulative
(Surplus)
Long term debt
Common stock
Paid In capital
Retained earnings
Accumulated other(treasury sock)
(5,416)
516
(5,418)
325
(6,088)
488
(6,106)
644
181
0
0
766
543
(3,411)
147
664
267
43
512
(3,460)
203
690
0
77
786
(3,844)
210
715
234
27
731
(3,545)
(516)
(325)
(488)
(644)
(3,927)
(3,785)
(4,332)
(4,189)
0
0
0
0
274
198
1,624
4,042
(2,212)
0
95
1,752
4,647
(2,709)
298
115
1,979
5,257
(3,317)
298
(164)
2,117
5,787
(3,849)
Stakeholder claims
Total
Changes
3,927
3,785
4,332
4,189
0
0
0
0
The next step is to compute changes by subtracting o
(2)
(670)
(18)
(191)
163
156
(34)
664
267
(723)
(31)
(49)
56
26
(267)
34
274
(384)
7
25
234
(50)
(55)
299
Non operating assets
191
(163)
(156)
Book value of the firm
142
(547)
143
0
(274)
(103)
128
605
(497)
(142)
0
298
20
227
610
(608)
547
0
0
(279)
138
530
(532)
(143)
(0)
0
0
Total assets
Less non operating assets
Marketable securities (short term
Investment)
Operating liabilities
Accounts payable
Accruals
Short term debt
Other Current liabilities
Other non current liabilities
Net operating assets
Additional Fund Needed
Long term debt
Common stock
Paid In capital
Retained earnings
Accumulated other(treasury sock)
Stakeholder claims
Total
Computation of FCF
The final step is to use those change numbers to com
Net Income
Add back interest expense
Less tax on Interest expense
NOPAT
(Additions to Net operating assets)
FCF
750
16
(6)
760
(49)
711
776
17
(7)
786
(384)
402
702
11
(4)
709
299
1,008
Additional Fund Needed (Surplus)
(Pay off for long term debt)
0
(274)
0
298
0
0
Additional common stock
isssued/(Shares repurchased)
Additional Paid in capital
(Dividends paid)
(Interest paid net off tax)
(Increase) in non-operating assets
Increase/(Decrease) in accumulated
other
Dispositions of FCF
Total
(103)
128
(145)
(10)
191
20
227
(166)
(10)
(163)
(279)
138
(172)
(7)
(156)
(497)
(711)
(608)
(402)
(532)
(1,008)
0
0
0
Positive means source of cash and negative represen
ed Financial Statements
uren Corp.
2016
2017
2018
2019
2020
2021
7,405
3,218
4,187
7,553
3,282
4,271
7,704
3,348
4,356
7,858
3,415
4,443
8,015
3,483
4,532
8,176
3,553
4,623
3,389
(11)
192
28
15
552
156
396
3,457
(11)
0
3,526
(11)
0
3,596
(11)
0
3,668
(11)
0
3,742
(11)
0
15
788
315
473
15
804
322
483
15
821
328
493
15
838
335
503
15
855
342
513
456
629
517
1,125
326
3,053
1,583
244
918
296
6,213
465
629
527
1,148
333
3,101
1,615
249
936
0
302
6,203
474
629
538
1,170
339
3,164
1,647
254
955
0
308
6,327
484
629
549
1,194
346
3,227
1,680
259
974
0
314
6,454
494
629
560
1,218
353
3,291
1,713
264
994
0
320
6,583
503
629
571
1,242
360
3,357
1,748
269
1,014
0
327
6,715
151
898
116
33
1,198
597
674
154
916
116
34
1,220
597
687
157
934
116
34
1,242
597
701
160
953
116
35
1,264
597
715
163
972
116
36
1,287
597
730
167
991
116
36
1,311
597
744
2,469
2,504
2,540
2,576
2,614
2,652
0
(350)
(576)
(810)
(1,053)
(1,305)
3,744
(180)
2,258
6,015
(4,349)
4,049
(180)
2,258
6,320
(4,349)
4,363
(180)
2,258
6,634
(4,349)
4,688
(180)
2,258
6,959
(4,349)
5,022
(180)
2,258
7,293
(4,349)
5,368
(180)
2,258
7,639
(4,349)
6,213
6,203
6,327
6,454
6,583
6,715
(6,583)
(6,715)
o restate do a Penman restatement of the Balance Sheet
nto Net operating assets, non-operating assets, and
gative (since they represent a use of cash), and liabilities
since they represent a source of cash).
(6,213)
629
(6,203)
629
(6,327)
629
(6,454)
629
629
629
151
898
116
33
674
(3,712)
154
916
116
34
687
(3,667)
157
934
116
34
701
(3,755)
160
953
116
35
715
(3,845)
163
972
116
36
730
(3,937)
167
991
116
36
744
(4,031)
(629)
(629)
(629)
(629)
(629)
(629)
(4,341)
(4,296)
(4,384)
(4,474)
(4,566)
(4,660)
(350)
597
(180)
2,258
6,320
(4,349)
(576)
597
(180)
2,258
6,634
(4,349)
(810)
597
(180)
2,258
6,959
(4,349)
(1,053)
597
(180)
2,258
7,293
(4,349)
(1,305)
597
(180)
2,258
7,639
(4,349)
0
597
(180)
2,258
6,015
(4,349)
4,341
4,296
4,384
4,474
4,566
4,660
0
0
0
0
0
0
s by subtracting out the balances from the previous year.
(107)
10
(124)
(127)
(129)
(132)
(15)
0
0
0
0
0
(59)
183
(118)
6
(57)
(167)
3
18
0
1
13
45
3
18
0
1
14
(88)
3
19
0
1
14
(90)
3
19
0
1
14
(92)
3
19
0
1
15
(94)
15
0
0
0
0
0
(152)
45
(88)
(90)
(92)
(94)
0
299
(16)
141
228
(500)
152
(350)
0
0
0
305
0
(45)
(226)
0
0
0
315
0
88
(234)
0
0
0
325
0
90
(243)
0
0
0
335
0
92
(251)
0
0
0
345
0
94
0
0
(0)
0
0
0
e numbers to compute FCF and the Disposition of FCF.
396
15
(6)
405
(167)
238
473
15
(6)
482
45
527
483
15
(6)
492
(88)
403
493
15
(6)
502
(90)
411
503
15
(6)
512
(92)
420
513
15
(6)
522
(94)
428
0
299
(350)
0
(226)
0
(234)
0
(243)
0
(251)
0
(16)
141
(168)
(9)
15
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
(500)
(238)
0
(527)
0
(403)
0
(411)
0
(420)
0
(428)
0
0
(0)
0
negative represents a disposition, or distribution of cash.
0
(0)
https://finance.yahoo.com/quote/RL?ltr=1
(Data has been taken from this site)
Calculation of WACC
Beta
Risk-free Rate
Market risk premium
Cost of Equity
Weight of Equity
0.62
0.02
0.08
0.0696
0.8827
Cost of debt
Weight of debt
Tax Rate
0.06144
Hence, WACC
0.03
0.1173 (Weights were based on book values, and shou
0.4 (We have assumed 40% tax all over)
0.0021107
0.06355
Calculation of Horizon Value
FCF 2021
Growth
FCF 2022
WACC
Growth
HV 2021
428.39
0.02 (We have assumed 2% growth all over)
436.957
0.06355
0.02
10033.6
Calculation of Value of the Firm
Year
FCF
PViF
2017
2018
2019
2020
2021
HV
527
403
411
420
428
10034
0.940
0.884
0.831
0.782
0.735
0.735
Total value of the firm
Less Debt
Value of Equity
No. of Shares
Value per Share
Market value per share
PVCF
495 M
357
342
328
315
7,373
9,210
(713)
8,497
48
176.40
111.92
M
M
M
M
book values, and should have been based on market values)
Period Ending
Operating Revenue
Gross Profit
Selling, General and Administrative
Depreciation, Depletion and Amortization
Restructuring and Impairment Charges
Other Operating Expenses
Total Operating Expenses
Operating Income
Interest Expense
Interest and Investment Income
Other Income (Expense)
Total Other Income (Expense)
Income Before Income Taxes
Income Taxes
5/31/2014 5/31/2015 5/31/2016
45,567,000 47,453,000 50,365,000
45,567,000 47,453,000 50,365,000
16,171,000 17,110,000 18,581,000
2,587,000 2,611,000 2,631,000
276,000
22,994,000 25,589,000 26,076,000
41,752,000 45,586,000 47,288,000
3,815,000 1,867,000 3,077,000
-160,000
18,000
-15,000
-235,000
14,000
-19,000
-336,000
21,000
-22,000
-157,000 -240,000 -337,000
3,658,000 1,627,000 2,740,000
1,334,000
577,000
920,000
Consolidated Net Income (Loss)
2,324,000 1,050,000 1,820,000
Net Income (Loss) Attributable to Common Shareholders, Basic 2,324,000 1,050,000 1,820,000
Net Income (Loss) Attributable to Common Shareholders, Diluted2,324,000 1,050,000 1,820,000
Basic Earnings Per Share, As Reported
Diluted Earnings Per Share, As Reported
Basic Shares Outstanding
Diluted Shares Outstanding
NOPAT
7.56
7.5
307,000
310,000
3.7
3.65
283,000
287,000
6.59
6.51
276,000
279,000
2,324,000 1,050,000 1,820,000
5/31/2017 5/31/2018
60,319,000 65,450,000
60,319,000 65,450,000
21,542,000 23,207,000
2,995,000 3,095,000
380,000
30,745,000 33,898,000
55,282,000 60,580,000
5,037,000 4,870,000
-512,000
33,000
21,000
-558,000
48,000
-7,000
-458,000 -517,000
4,579,000 4,353,000
1,582,000
-219,000
2,997,000 4,572,000
2,997,000 4,572,000
2,997,000 4,572,000
11.27
11.1
266,000
270,000
17.12
16.81
267,000
272,000
2,997,000 4,572,000
Period Ending
5/31/2014
5/31/2015
5/31/2016
5/31/2017
2,908,000
5,460,000
463,000
522,000
330,000
3,763,000
5,719,000
498,000
3,534,000
7,252,000
496,000
3,969,000
7,599,000
514,000
355,000
707,000
546,000
9,683,000
10,335,000
11,989,000
12,628,000
Property, Plant and Equipment
Accumulated Depreciation
40,691,000
-21,141,000
42,864,000
-21,989,000
41,869,000
-22,734,000
45,230,000
-24,645,000
Property, Plant and Equipment, Net
19,550,000
20,875,000
19,135,000
20,585,000
2,790,000
3,810,000
1,047,000
1,511,000
6,747,000
5,149,000
2,939,000
7,154,000
5,396,000
2,789,000
33,070,000
36,531,000
45,959,000
48,552,000
1,971,000
1,277,000
1,000
2,063,000
2,066,000
1,436,000
19,000
2,435,000
2,944,000
1,972,000
29,000
3,063,000
2,752,000
1,914,000
22,000
3,230,000
5,312,000
5,956,000
8,008,000
7,918,000
4,736,000
3,484,000
2,114,000
2,147,000
7,249,000
4,893,000
1,210,000
2,230,000
13,733,000
6,227,000
1,567,000
2,640,000
14,909,000
4,487,000
2,485,000
2,680,000
17,793,000
21,538,000
32,175,000
32,479,000
32,000
2,643,000
-4,133,000
506,000
16,229,000
32,000
2,786,000
-4,897,000
172,000
16,900,000
32,000
2,892,000
-7,342,000
-169,000
18,371,000
32,000
3,005,000
-7,382,000
-415,000
20,833,000
15,277,000
15,277,000
33,070,000
14,993,000
14,993,000
36,531,000
13,784,000
13,784,000
45,959,000
16,073,000
16,073,000
48,552,000
164,000
212,000
0.1
800,000
318,000
185,000
207,000
0.1
800,000
318,000
178,000
218,000
0.1
800,000
318,000
252,000
237,000
0.1
800,000
318,000
29,036,000
32,030,000
39,952,000
42,570,000
Cash and Equivalents
Trade Receivables
Inventories
Deferred Tax Assets, Current
Prepaid Expenses and Other Current Assets
Total Current Assets
Goodwill
Intangible Assets, Net
Other Assets
Total Assets
Accounts Payable
Employee Related Liabilities, Current
Debt, Current
Accrued and Other Current Liabilities
Total Current Liabilities
Long-Term Debt and Capital Lease Obligations
Pension and Other Post-Retirement Liabilities
Deferred Taxes, Noncurrent
Other Noncurrent Liabilities
Total Liabilities
Common Stock
Additional Paid In Capital
Treasury Stock
Accumulated Other Comprehensive Income
Retained Earnings (Deficit)
Total Equity Attributable to Parent
Total Equity
Total Liabilities and Equity
Receivables Reserve
Inventories Reserve
Common Stock, Class A, Par Value
Common Stock, Class A, Shares Authorized
Common Stock, Class A, Shares Issued
NOA(OA-OL)
5/31/2018
3,265,000
8,481,000
525,000
1,070,000
13,341,000
55,121,000
-26,967,000
28,154,000
6,973,000
3,862,000
52,330,000
2,977,000
2,177,000
1,342,000
3…
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