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19oct2024 Financial Modelling-1

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8 views

19oct2024 Financial Modelling-1

Uploaded by

ahmedmurtaza1202
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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COMPUTING THE COST OF DEBT FOR KRAFT

2005/12/31 2004/12/31
Cash and cash equivalents 316,000,000 282,000,000

Short-term borrowings 805,000,000 1,818,000,000


Current portion of long-term debt 1,268,000,000 750,000,000
Due to Altria Group, Inc. and affiliates 652,000,000 227,000,000
Long-term debt 8,475,000,000 9,723,000,000

Interest and other debt expense, net 636,000,000 666,000,000

Total debt 11,200,000,000 12,518,000,000


net debt 10,884,000,000 12,236,000,000
net cost of debt 5.84% 5.44%
gross/cost of debt 5.68% 5.32%
COMPUTING THE WACC FOR KRAFT
Shares outstandin 1,669,880,755
Share price, end 27.75
Equity value, E 46,339,190,951
Net debt, D 10,884,000,000

WACC based on Gordon per-share dividends and interest from financial statements
Cost of equity, rE 16.79%
Cost of debt, rD 5.50%
Tax rate, TC 29.37%
WACC 14.33%

total equity 57,223,190,951


SETTING UP THE FINANCIAL STATEMENT MODEL
Sales growth 10%
Current assets/Sales 15%
Current liabilities/Sales 8%
Net fixed assets/Sales 77%
Costs of goods sold/Sales 50%
Depreciation rate 10%
Interest rate on debt 10.00%
Interest paid on cash and marketable securities 8.00%
Tax rate 40%
Dividend payout ratio 40%

Year 0 1 2 3 4
Income statement
Sales 1,000 1,100 1,210 1,331 1,464
Costs of goods sold (500) (550) (605) (666) (732)
Interest payments on debt (32) (32) (32) (32) (32)
Interest earned on cash and marketable securities 6
Depreciation (100)
; 374
Taxes (150)
Profit after tax 225
Dividends (90)
Retained earnings 135

Balance sheet
Cash and marketable securities 80
Current assets 150 165 182 200 220
Fixed assets
At cost 1,070
Depreciation (300)
Net fixed assets 770 847 932 1,025 1,127
Total assets 1,000

Current liabilities 80 88 97 106 117


Debt 320
Stock 450
Accumulated retained earnings 150
Total liabilities and equity 1,000

Current Ratio Inventory


Acid Test Ratio Debtors
Gross Profit Margin Prepaid
Net Profit Margin
ROE
ROA
ROCE
Total Debt to Equity
Total Debt to Total Assets
Self Financing Ratio
Cash Flow Ratio
Interest Cover Ratio
5 6

1,611 1,772
(805) (886)
(32) (32)

242 266

1,240 1,364

129 142

40% 66
30% 50
30% 50

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