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    Pinkerton (A)

    Uploaded by

    Namita Dey
    This document contains financial information for CPP for 1987-1988 including net revenue, cost of goods sold, gross profit, operating expenses, EBIT, taxes, net fixed assets, net working capital, and free cash flow. It also includes assumptions for discount rates, growth rates, and valuation of CPP using a two-stage DCF model with different scenarios for gross profit margins and net working capital. The valuation ranges from $96.97 million to $137.53 million depending on the assumptions used.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Pinkerton (A)

    Uploaded by

    Namita Dey
    2K views14 pages
    This document contains financial information for CPP for 1987-1988 including net revenue, cost of goods sold, gross profit, operating expenses, EBIT, taxes, net fixed assets, net working capital, and free cash flow. It also includes assumptions for discount rates, growth rates, and valuation of CPP using a two-stage DCF model with different scenarios for gross profit margins and net working capital. The valuation ranges from $96.97 million to $137.53 million depending on the assumptions used.

    Original Description:

    pinkerton

    Original Title

    Pinkerton (a)

    Copyright

    © © All Rights Reserved

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    This document contains financial information for CPP for 1987-1988 including net revenue, cost of goods sold, gross profit, operating expenses, EBIT, taxes, net fixed assets, net working capital, and free cash flow. It also includes assumptions for discount rates, growth rates, and valuation of CPP using a two-stage DCF model with different scenarios for gross profit margins and net working capital. The valuation ranges from $96.97 million to $137.53 million depending on the assumptions used.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    2K views14 pages

    Pinkerton (A)

    Uploaded by

    Namita Dey
    This document contains financial information for CPP for 1987-1988 including net revenue, cost of goods sold, gross profit, operating expenses, EBIT, taxes, net fixed assets, net working capital, and free cash flow. It also includes assumptions for discount rates, growth rates, and valuation of CPP using a two-stage DCF model with different scenarios for gross profit margins and net working capital. The valuation ranges from $96.97 million to $137.53 million depending on the assumptions used.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 14
    At a glance
    Powered by AI
    The document analyzes the financial performance and valuation of CPP and Pinkerton companies using various metrics like revenue, costs, profits, cash flows and ratios over multiple years.

    The analysis looks at metrics like revenue, gross profit, operating expenses, EBIT, EBIAT, FCFF, NWC, tax rate, net PPE, WACC for CPP and Pinkerton across years 1987-1992.

    The valuation uses DCF method with both positive and negative scenarios. It also calculates terminal value and equity value. Comparable company multiples are also referenced.

    page 3

    4 % sales
    page 3

    net rev
    cogs
    gross profit
    % of rev

    1987
    408.3
    381.7
    26.6
    6.51%

    operating exp % of rev

    6.51%

    net revenue
    net PPE
    delta net ppe
    NWC (% changes)
    NWC
    delta NWC
    NWC (% changes)
    NWC
    delta NWC

    Net revenue
    gross profit margin
    operating expenses
    EBIT
    EBIAT = 34 % tax
    less delta net ppe
    delta NWC
    FCFF
    delta NWC
    FCFF
    discounted FCFF
    discounted FCFF
    Discount Rate
    equity beta levered
    assume risk premium
    COE
    after tax COD
    debt
    equity
    D/V
    E/V

    1987
    408.3
    17.6

    37.7

    37.7

    1987
    408.3
    26.6
    27
    -0.4

    1988
    367.47
    14.6988
    -2.9012
    8.60%
    31.60242
    -6.09758
    9.50%
    34.90965
    -2.79035
    1988
    367.47
    31.23495
    22.0482
    9.18675
    6.063255
    -2.9012
    -6.09758
    15.062035
    -2.79035
    11.754805
    13.4269300469
    10.4787264436

    0.89
    5%
    13.03%
    using exh 5
    6.53%
    assume bond is A rated
    10.6
    70.2
    exh 4
    0.13118812
    0.86881188

    wacc
    D/E
    unleverd beta

    12.18%
    0.15099715
    0.80934245

    CPP
    debt.
    equity

    3.1
    18

    Pinkerton
    interest expense
    0.4
    long term debt at beginning of yr 4.1
    cost of debt
    9.80%
    levered beta
    Cost of equity

    positive scenario

    0.90133771
    13.09%
    1988
    0
    0
    0
    0

    EBIT
    EBIAT 34 % tax
    less CF adjusted
    FCFF
    discounted FCFF
    TV
    PV
    EV

    28.9642986
    16.3052847
    19.584187

    Final EV

    137.529014

    1988

    6.61%
    page 3

    Revenue
    operating expense
    op exp proj
    proj op. exp
    saving
    after tax saving
    dsicounted after tax saving

    367.47
    24.3
    6%
    22.0482
    2.2518
    1.486188
    1.3248503481

    PRICING
    1988
    449.13
    29.238363
    8.50%
    31.23495
    1.996587

    revenue
    current GPM
    revised GPM
    revised GPM
    increased GP

    408.3
    6.51%

    sales rev
    sales rev

    408.3
    408.3

    449.13
    367.47

    1987
    408.3
    37.7
    9.23%

    1988
    367.47

    Non cash Working capital

    Sales revenue
    NWC
    NWC % of SR
    revised NWC
    Revised NWC
    delta NWC
    delta NWC in positive scenario
    decrease in delta NWC
    Discounted NWC

    Particulars
    Cash
    A/R

    33.93
    8.60%
    31.60242
    -3.77
    -6.09758
    2.32758
    2.0749024842

    1989
    326.64
    13.0656
    -1.6332
    7.40%
    24.17136
    -7.43106
    9.50%
    31.0308
    -3.87885

    1990
    285.81
    11.4324
    -1.6332
    6.20%
    17.72022
    -6.45114
    9.50%
    27.15195
    -3.87885

    1991
    300.1005
    12.00402
    0.57162
    6.20%
    18.606231
    0.886011
    9.50%
    28.509548
    1.3575975

    1992
    315.10553 growth
    12.604221
    0.600201
    6.20%
    19.536543 positive scenario
    0.9303116
    9.50%
    29.935025
    negative scenario
    1.4254774

    1989
    326.64
    29.3976
    19.27176
    10.12584
    6.6830544
    -1.6332
    -7.43106
    15.747314
    -3.87885
    12.195104
    14.037817
    9.6910687

    1990
    285.81
    27.15195
    16.57698
    10.57497
    6.9794802
    -1.6332
    -6.45114
    15.06382
    -3.87885
    12.49153
    13.428521
    8.8490136

    1991
    300.1005
    30.760301
    17.405829
    13.354472
    8.8139517
    0.57162
    0.886011
    7.3563207
    1.3575975
    6.8847342
    6.557733
    4.347699

    1992
    315.10553
    32.298316
    18.27612
    14.022196
    9.2546493
    0.600201
    0.9303116
    positive scenario
    7.7241367
    1.4254774
    negative scenario
    7.2289709
    6.8856196
    4.0695074

    bond is A rated
    no. of shares outstanding * share price

    assuming data for Pinkerton same as CPP

    assume D/E same as pinkerton

    1989
    1.2
    0.792
    0
    0.792
    0.6293777

    1990
    1.5
    0.99
    0
    0.99
    0.7013171

    1991
    2
    1.32
    0
    1.32
    0.833578

    1992
    3
    1.98
    0
    1.98
    1.1146296

    1989

    1990

    1991

    1992

    326.64
    21.6
    5.90%
    19.27176
    2.32824
    1.5366384
    1.2211186
    TV
    PV
    EV

    285.81
    18.9
    5.80%
    16.57698
    2.32302
    1.5331932
    1.0861157
    24.727107
    13.919982
    19.520257

    300.1005
    19.845
    5.80%
    17.405829
    2.439171
    1.6098529
    1.0166196

    315.10553
    20.83725
    5.80%
    18.27612
    2.5611296
    1.6903455
    0.9515702

    1989
    489.5517
    31.869816
    9%
    29.3976
    -2.472216

    1990
    528.71584
    34.419401
    9.50%
    27.15195
    -7.267451

    1991
    565.72594
    36.828759
    10.25%
    30.760301
    -6.068458

    1992
    599.6695
    39.038485
    10.25%
    in positive scenario
    32.298316
    -6.740168

    489.5517
    326.64

    528.71584 565.72594 599.6695


    285.81
    300.1005 315.10553

    1989
    326.64

    1990
    285.81

    1991
    300.1005

    1992
    315.10553

    30.16
    7.40%
    24.17136
    -3.77
    -7.43106
    3.66106
    2.9093301

    26.39
    6.20%
    17.72022
    -3.77
    -6.45114
    2.68114
    1.8993225

    27.7095
    6.20%
    18.606231
    1.3195
    0.886011
    0.433489
    0.2737476

    29.094975
    6.20%
    19.536543
    1.385475
    0.9303115
    0.4551635
    0.2562316

    difference

    GPM
    operating exp growth

    5%

    1988
    8.50%
    8.50%
    6%

    1989
    9.00%
    8.75%
    5.90%

    Not changing
    sales revenue
    operating expense
    tax rate
    net ppe

    changing
    GPM
    NWC

    wacc

    12.18%

    TV
    discounted TV
    EV

    112.9920214794
    63.6082061015
    117.9448270089

    TV
    discounted TV
    EV

    105.748521064
    59.530519365
    96.9665345456

    1990
    9.50%
    9%
    5.80%

    1991
    10.25%
    9.50%
    5.80%

    selling price * selling volume = sales rve

    TV
    PV

    6.656290007
    3.7471200275

    1992
    10.25%
    9.50%
    5.80%

    d
    e
    value

    75
    25
    100

    1 value of eValue of frim - LTD


    2

    FCFE / (1+ PAT+depr-delta capex-delta NWC + loan - loan repayment


    Length of 2 stage model
    3 stage
    stable

    + loan - loan repayment / (1+ke)^n

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