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    OIDD6360 - Peapod ROICTree

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    A J
    - Peapod reported a $14.9 million operating loss in Q1 2001 with a -152% return on invested capital. - Operating expenses were $22.9 million while operating revenue was only $8 million, leading to the large loss. - Peapod had 120,000 active customers, 205,000 total orders in the quarter, and 9 fulfillment centers serving those customers. - However, each fulfillment center had high fixed and variable expenses of over $1.3 million on average, contributing to Peapod's financial struggles.

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    OIDD6360 - Peapod ROICTree

    Uploaded by

    A J
    256 views6 pages
    - Peapod reported a $14.9 million operating loss in Q1 2001 with a -152% return on invested capital. - Operating expenses were $22.9 million while operating revenue was only $8 million, leading to the large loss. - Peapod had 120,000 active customers, 205,000 total orders in the quarter, and 9 fulfillment centers serving those customers. - However, each fulfillment center had high fixed and variable expenses of over $1.3 million on average, contributing to Peapod's financial struggles.

    Original Description:

    ROIC Tree for Peapod Case

    Original Title

    OIDD6360_Peapod ROICTree

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    © © All Rights Reserved

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    - Peapod reported a $14.9 million operating loss in Q1 2001 with a -152% return on invested capital. - Operating expenses were $22.9 million while operating revenue was only $8 million, leading to the large loss. - Peapod had 120,000 active customers, 205,000 total orders in the quarter, and 9 fulfillment centers serving those customers. - However, each fulfillment center had high fixed and variable expenses of over $1.3 million on average, contributing to Peapod's financial struggles.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    256 views6 pages

    OIDD6360 - Peapod ROICTree

    Uploaded by

    A J
    - Peapod reported a $14.9 million operating loss in Q1 2001 with a -152% return on invested capital. - Operating expenses were $22.9 million while operating revenue was only $8 million, leading to the large loss. - Peapod had 120,000 active customers, 205,000 total orders in the quarter, and 9 fulfillment centers serving those customers. - However, each fulfillment center had high fixed and variable expenses of over $1.3 million on average, contributing to Peapod's financial struggles.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    Peapod: Q1 2001

    Denotes operational metric

    Operating Income (EBIT)


    $ (14,948,000)
    Return (NOPAT)
    $ (14,948,000)
    1 - tax rate
    $0

    ROIC
    -152% Operating NWC
    $ (16,283,000)

    Invested Capital Operating Assets


    $ 9,833,000

    Operating Fixed Assets


    $ 26,116,000
    Operating Revenue (Gross Profit)
    $ 7,974,000

    Operating Expense
    $ 22,922,000

    Current assets
    $ 9,214,000

    Current liabilties
    $ 25,497,000

    PPE (net)
    $ 15,867,000

    Goodwill and other


    $ 10,249,000
    Number of customers (transacting in last 12 mo)
    120,000

    Number of orders
    205,000

    Fulfillment operations
    $ 12,443,000
    General and administrative
    $ 3,757,000
    Marketing and selling
    $ 3,019,000
    System development and maintenance
    $ 951,000
    Depreciation and amortization
    $ 1,991,000
    Non-recurring expenses
    $ 761,000
    Orders per customer
    1.71
    Gross profit per customer
    $ 66.45
    Average price per order
    Gross profit per order $ 121.64
    $ 38.90
    Average COGS per order
    $ 82.75

    Ghosh, Anirba
    Y:
    Isn't this $115 as
    given on the cas

    # of fulfillment centers Expense per fulfillment center


    9 $ 1,382,555.56

    Number of customers (trasacting in last 12 mo) SG&A expense per customer


    120,000 $ 31.31

    Marketing expense per customer


    $ 25.16
    Beginning inventory

    Purchase

    Ending inventory

    Ghosh, Anirban
    Y:
    Isn't this $115 as
    given on the case?

    Fixed costs of running each fulfillment center


    $ 450,000.00

    Fixed costs for delivery vans per fulfillment center


    $ 49,516.91

    Variable costs for wages & benefits to drivers


    $ 162,400.00

    Variable costs of running each fulfillment center


    $ 720,638.65
    Delivery days per quarter
    75

    Max. orders per truck


    23

    Number of trucks per shift


    1

    Number of shifts per day


    2

    Number of delivery vans per center


    7

    Fully loaded hourly wage


    $ 14.50

    Number of drivers (slow season)


    70

    Weekly hrs worked per delivery employee


    40

    Employees per fulfillment center


    92

    Weekly hrs worked per fulfillment employee


    40

    Avg. hourly wage per employee


    $ 16.32

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