Share
Explore BrainMass

EVA and MVA

You must show all your work on this homework to receive credit.

Downloadable Financials Data
Return to Hoover's Annual Financials

Annual Financials
Income Statement (All dollar amounts in millions except per share amounts.)

Dec 04 Dec 03 Dec 02
Revenue 13,564.70 12,358.60 11,356.60
Costs of Goods Sold 9,039.40 8,236.10 7,831.80
Gross Profit 4,525.30 4,122.50 3,524.80
Gross Profit Margin 33.40% 33.40% 31.00%
SG&A Expense 3,726.20 3,403.90 2,817.70
Depreciation & Amortization 269.2 248.3 200.7
Operating Income 529.9 470.3 506.4
Operating Margin 3.90% 3.80% 4.50%
Nonoperating Income 37.7 29.6 25.7
Nonoperating Expenses 61.1 54.8 46.2
Income Before Taxes 461.1 445.1 479.2
Income Taxes 125.7 143 167.7
Net Income After Taxes 335.4 302.1 311.5

Net Profit Margin 2.50% 2.20% 2.70%

Dividends per Share ($) 0 0 0

Balance Sheet Dec 04 Dec 03 Dec 02
Cash 793.7 790.9 877.1
Net Recievables 1,303.90 1,112.40 771.6
Inventories 1,408.80 1,336.30 1,305.60
Other Current Assets 409.8 337 255.4
Total Current Assets 3,916.20 3,576.70 3,209.70
Net Fixed Assets 2,851.20 2,568.50 1,556.10
Total Assets 6,767.40 6,145.20 4,765.80

Accounts Payable 1,650.30 1,323.20 1,174.00
Short-Term Debt 15.1 12.9 16.1
Accruals 952.9 941.2 801.9
Total Current Liabilities 2,618.40 2,277.30 1,992.00
Long-Term Debt 583.7 829.3 412
Total Liabilities 3,544.30 3,351.20 2,468.70

Preferred Stock Equity 0 0 0
Common Stock Equity 3,223.00 2,794.10 2,297.10
Total Equity 3,223.00 2,794.10 2,297.10
Shares Outstanding (mil.) 312.3 310.2 308.5

For the company above, find the following for 2003 & 2004:

NOPAT
NOWC
Operating Capital
Net Cash Flow
Operating Cash Flow
Free Cash Flow
EVA (assume cost of capital of 8.5% for 2003, 9% for 2004)
MVA (assume a market price of $16.71 for Dec. 2003, and $17.36 for Dec. 2004)
(See attached file for full problem description)

Attachments

Solution Preview

You must show all your work on this homework to receive credit.

Downloadable Financials Data
Return to Hoover's Annual Financials

Annual Financials
Income Statement (All dollar amounts in millions except per share amounts.)

Dec 04 Dec 03 Dec 02
Revenue 13,564.70 12,358.60 11,356.60
Costs of Goods Sold 9,039.40 8,236.10 7,831.80
Gross Profit 4,525.30 4,122.50 3,524.80
Gross Profit Margin 33.40% 33.40% 31.00%
SG&A ...

Solution Summary

This provides the steps to calculate EVA and MVA, NOPAT, NOWC, Operating Capital, Net Cash Flow, Operating Cash Flow, Free Cash Flow

$2.19