Escolar Documentos
Profissional Documentos
Cultura Documentos
This case was prepared solely as the basis for class discussion. Cases are not intended
to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
Products
Washers and Dryers
Microwave Ovens
Washers
Dishwashers
Washers
Refrigerators and Cooking Appliances
Washers
Chest Freezers
Refrigerators and Freezers
Refrigerators and Freezers
Wave South
Italy
Portugal
Spain
Wave Central
Czech Republic
Hungary
Poland
Slovakia
Wave North
Denmark
Finland
Ireland
Norway
Sweden
United Kingdom
Start Date:
End Date:
West
South Central North
May-99 May-00 Mar-01 Jan-02
Apr-00 Feb-01 Dec-01 Aug-02
Exhibit 3
Wave
West
South
Central
North
Source:
DSI
45
51
67
55
Product
Availability
73.5%
83.1%
76.8%
83.2%
Company documents.
Units Sold
2,271,139
1,415,949
977,665
1,443,156
Revenue
Margin
(000s US$) (000s US$)
477,784
58,859
283,549
46,241
185,625
43,678
280,901
29,818
Exhibit 4
Wave
West
South
Central
North
Source:
2000
25%
Company documents.
2004
20%
40%
2005
20%
Exhibit 5
West
South
Central
North
2000
0.06%
0.00%
0.00%
0.00%
Source:
Company Documents
2000
West
South
Central
North
0.06
0.00
0.00
0.00
2001
0.25%
0.10%
0.00%
0.00%
2001
0.25
0.10
0.00
0.00
2002
0.25%
0.25%
0.13%
0.00%
2003
0.25%
0.25%
0.25%
0.13%
2004
0.25%
0.25%
0.25%
0.25%
2005
0.25%
0.25%
0.25%
0.25%
2002
0.25
0.25
0.13
0.00
2003
0.25
0.25
0.25
0.13
2004
0.25
0.25
0.25
0.25
2005
0.25
0.25
0.25
0.25
Exhibit 6
2001
2002
2003
2004
2005
190
411
442
474
506
Finance Headcount
81
135
216
324
405
405
Warehouse Space
18
72
155
230
274
288
102
512
922
1,024
1,024
1,024
Information Systems
420
840
840
1,280
1,280
1,280
621
1,749
2,544
3,300
3,457
3,503
Source:
Company Documents.
2006
2007
537
569
405
405
288
288
1,024
1,024
1,280
1,280
3,534
3,566
One measure of evaluating investment in project Atlantic is by calculating NPV. If the NPV of Investment in project Atlantic is > 0 th
For calculating NPV of the project we need to find the expected CF from the project.
Expected CF from the project can be found by taking the difference of expected CF without the project and expected CF with the p
Forecasted Income Statement for West Wave
Assuming Exhibit 3 is valid for 2000 and subsequent years
2000
# of Units sold
2271139
revenue/sales
477784000
margin/profit
58859000
cogs
418925000
cogs/unit
184.4559052
price/unit
210.3719764
margin/unit
25.91607119
margin % of revenue 12.31916515
DSI
45
Inventory in $
51648287.67
2001
2271139
477784000
58859000
418925000
184.4559052
210.3719764
25.91607119
12.31916515
45
51648287.67
2002
2271139
477784000
58859000
418925000
184.4559052
210.3719764
25.91607119
12.31916515
45
51648287.67
2003
2271139
477784000
58859000
418925000
184.4559052
210.3719764
25.91607119
12.31916515
45
51648287.67
Year
2004
2271139
477784000
58859000
418925000
184.4559052
210.3719764
25.91607119
12.31916515
45
51648287.67
2002
1415949
283549000
46241000
237308000
167.5964318
200.2536815
32.65724966
16.30793972
51
33158104.11
2003
1415949
283549000
46241000
237308000
167.5964318
200.2536815
32.65724966
16.30793972
51
33158104.11
Year
2004
1415949
283549000
46241000
237308000
167.5964318
200.2536815
32.65724966
16.30793972
51
33158104.11
2002
977665
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53023569
67
26056024.66
2003
977665
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53023569
67
26056024.66
Year
2004
977665
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53023569
67
26056024.66
2002
1443156
2003
1443156
Year
2004
1443156
2001
1415949
283549000
46241000
237308000
167.5964318
200.2536815
32.65724966
16.30793972
51
33158104.11
2001
977665
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53023569
67
26056024.66
# of Units sold
2000
1443156
2001
1443156
revenue/sales
margin/profit
cogs
cogs/unit
price/unit
margin/unit
margin % of revenue
DSI
Inventory in $
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
2001
2364031.68
498748071.2
62688468.73
436059602.5
184.4559052
210.9735146
26.51760947
12.57
87.43
37.20
44442238.94
2002
2414050.81
509300783.4
64014856.56
445285926.9
184.4559052
210.9735146
26.51760947
12.57
87.43
33.00
40258727.63
Year
2003
2414050.81
509300783.4
64014856.56
445285926.9
184.4559052
210.9735146
26.51760947
12.57
87.43
33.00
40258727.63
2004
2414050.81
509300783.4
64014856.56
445285926.9
184.4559052
210.9735146
26.51760947
12.57
87.43
33.00
40258727.63
2001
1429218.20
286548590
47016719.92
239531870.1
167.5964318
200.4932421
32.89681031
16.41
83.59
46.80
30712579.51
2002
1444382.99
290109610.3
48036174.4
242073435.9
167.5964318
200.8536597
33.2572279
16.56
83.44
42.00
27855025.5
Year
2003
1453860.99
292013300.9
48351386.34
243661914.6
167.5964318
200.8536597
33.2572279
16.56
83.44
39.00
26035108.68
2004
1453860.99
292013300.9
48351386.34
243661914.6
167.5964318
200.8536597
33.2572279
16.56
83.44
39.00
26035108.68
2001
977665.00
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53
76.47
67.00
26056024.66
2002
997014.62
189621187.6
44864819.91
144756367.7
145.1898145
190.188974
44.99915951
23.66
76.34
62.20
24668071.43
Year
2003
1016364.24
193605604.5
46039869.05
147565735.4
145.1898145
190.4884065
45.29859204
23.78
76.22
57.40
23206227.98
2004
1026039.05
195448543.6
46478124.32
148970419.3
145.1898145
190.4884065
45.29859204
23.78
76.22
55.00
22447597.42
south wave
2000
# of Units sold
1415949.00
revenue/sales
283549000
margin/profit
46241000
cogs
237308000
cogs/unit
167.5964318
price/unit
200.2536815
margin/unit
32.65724966
margin % of revenue
16.31
cogs % of revenue
83.69
DSI
51.00
Inventory in $
33158104.11
central wave
2000
# of Units sold
977665.00
revenue/sales
185625000
margin/profit
43678000
cogs
141947000
cogs/unit
145.1898145
price/unit
189.8656493
margin/unit
44.67583477
margin % of revenue
23.53
cogs % of revenue
76.47
DSI
67.00
Inventory in $
26056024.66
North Wave
Year
# of Units sold
revenue/sales
margin/profit
cogs
cogs/unit
price/unit
margin/unit
margin % of revenue
cogs % of revenue
DSI
Inventory in $
2000
1443156.00
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.62
89.38
55.00
37834424.66
2001
1443156.00
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.62
89.38
55.00
37834424.66
2002
1443156.00
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.62
89.38
55.00
37834424.66
2003
1458420.15
284285528.8
30546843.25
253738685.6
173.9818841
194.9270441
20.9451599
10.75
89.25
50.20
34897758.95
2004
1473684.30
287647656.5
31253285.35
256394371.2
173.9818841
195.1894693
21.2075852
10.87
89.13
45.40
31891245.07
minus W
minus C
FCF
Discoun
Discoun
PV of a
PV of fo
If the NPV of Investment in project Atlantic is > 0 then we can invest in it.
Year
2005
1415949
283549000
46241000
237308000
167.5964318
200.2536815
32.65724966
16.30793972
51
33158104.11
Year
2005
977665
185625000
43678000
141947000
145.1898145
189.8656493
44.67583477
23.53023569
67
26056024.66
Year
2005
1443156
2000
2271139
0.735
0.920
0.252
0.250
0.250
35727.95
35727.95
12.00
0.25
3.00
3.00
42.00
12.00
0.40
4.80
7.80
37.20
12.00
0.35
4.20
12.00
33.00
2000
1415949
0.831
0.920
0.107
0.250
0.000
0.00
0.00
2001
1415949
0.831
0.920
0.107
0.250
0.350
13269.20
13269.20
2002
1415949
0.831
0.920
0.107
0.250
0.400
15164.80
28433.99
12.00
0.00
0.00
0.00
51.00
12.00
0.35
4.20
4.20
46.80
12.00
0.40
4.80
9.00
42.00
2000
977665
0.768
0.920
0.198
0.250
0.000
0.00
0.00
2001
977665
0.768
0.920
0.198
0.250
0.000
0.00
0.00
2002
977665
0.768
0.920
0.198
0.250
0.400
19349.62
19349.62
12.00
0.00
0.00
0.00
67.00
12.00
0.00
0.00
0.00
67.00
12.00
0.40
4.80
4.80
62.20
280901000
29818000
251083000
173.9818841
194.6435451
20.66166097
10.61512775
55
37834424.66
2005
2414050.81
509300783.4
64014856.56
445285926.9
184.4559052
210.9735146
26.51760947
12.57
87.43
33.00
40258727.63
2005
1453860.99
292013300.9
48351386.34
243661914.6
167.5964318
200.8536597
33.2572279
16.56
83.44
39.00
26035108.68
2005
1026039.05
195448543.6
46478124.32
148970419.3
145.1898145
190.4884065
45.29859204
23.78
76.22
55.00
22447597.42
2000
1443156
0.832
0.920
0.106
0.250
0.000
0.00
0.00
2001
1443156
0.832
0.920
0.106
0.250
0.000
0.00
0.00
2002
1443156
0.832
0.920
0.106
0.250
0.000
0.00
0.00
12.00
0.00
0.00
0.00
55.00
12.00
0.00
0.00
0.00
55.00
12.00
0.00
0.00
0.00
55.00
2000
2001
6107909.00 6107909.00
1227859000 1227859000
178596000
178596000
1049263000 1049263000
148696841.1 148696841.1
2002
6107909.00
1227859000
178596000
1049263000
148696841.1
2000
2001
6143636.95 6214070.87
1235707478 1251822661
179854246.5 183201188.7
1055853232 1068621473
146011950 139045267.8
2002
6298604.42
1269932581
186733850.9
1083198730
130616249.2
Inventory savings
Reduction in DSI by ERP
% Improvement
Net DSI reduction
cumulative dsi
new dsi
# of Units sold
revenue/sales
margin/profit
cogs
inventory
# of Units sold
revenue/sales
margin/profit
cogs
inventory
2000
2001
2002
# of Units sold
35727.95
106161.87
190695.42
revenue/sales
7848478.195 23963661.21 42073581.37
margin/profit
1258246.477 4605188.652 8137850.869
cogs
6590231.718 19358472.56
33935730.5
inventory
-2684891.145 -9651573.34 -18080591.87
working capital for inventory
-2684891.145 -6966682.19 -8429018.535
negative cash flow from inventory means that cash has gone out from business for inventory
also FCF= NI+NCC-WC+Int(1-t)+capex
so we need to find NCC,CAPEX
capex of equipment
capex of software license
total capex
depreciation+amortization
1999
4300000
600000.00
4900000
2000
8600000
300000.00
8900000
980000
2005
1481316.38
289137357.2
31415143.23
257722213.9
173.9818841
195.1894693
21.2075852
10.87
89.13
43.00
30361795.07
1780000
Total Dep+Amortization
980000
2760000
Expenses
current employees
consultants
Task force
manage&maintenance
License maintenance
Total expenses
forecasted savings
operating expenses net
operating expenses
1999
2000
2250000
2250000
3511200.00 1663200.00
300000
600000
1200000
100000
6361200
5513200
621000
6361200
4892200
2001
2250000
1293600.00
600000
1800000
200000
6143600
1749000
4394600
Expenses
revenue
(cogs)
(Operating expenses)
(depreciation)
EBIT
taxes@40%
EBIAT
plus NCC
minus Working Capital inventry
minus Capex
FCF
Discount factor at 9%
Discounted cash flow
PV of all DCF
12.00
0.00
0.00
12.00
33.00
12.00
0.00
0.00
12.00
33.00
12.00
0.00
0.00
12.00
33.00
2003
1415949
0.831
0.920
0.107
0.250
0.250
9478.00
37911.99
2004
1415949
0.831
0.920
0.107
0.250
0.000
0.00
37911.99
2005
1415949
0.831
0.920
0.107
0.250
0.000
0.00
37911.99
12.00
0.25
3.00
12.00
39.00
12.00
0.00
0.00
12.00
39.00
12.00
0.00
0.00
12.00
39.00
2003
977665
0.768
0.920
0.198
0.250
0.400
19349.62
38699.24
2004
977665
0.768
0.920
0.198
0.250
0.200
9674.81
48374.05
2005
977665
0.768
0.920
0.198
0.250
0.000
0.00
48374.05
12.00
0.40
4.80
9.60
57.40
12.00
0.20
2.40
12.00
55.00
12.00
0.00
0.00
12.00
55.00
2003
1443156
0.832
0.920
0.106
0.250
0.400
15264.15
15264.15
2004
1443156
0.832
0.920
0.106
0.250
0.400
15264.15
30528.30
2005
1443156
0.832
0.920
0.106
0.250
0.200
7632.08
38160.38
12.00
0.40
4.80
4.80
50.20
12.00
0.40
4.80
9.60
45.40
12.00
0.20
2.40
12.00
43.00
Year
2003
2004
6107909.00
6107909.00
1227859000 1227859000
178596000
178596000
1049263000 1049263000
148696841.1 148696841.1
2005
6107909.00
1227859000
178596000
1049263000
148696841.1
Year
2003
2004
6342696.19
6367635.15
1279205218 1284410284
188952955.2 190097652.6
1090252262 1094312632
124397823.2 120632678.8
2005
6375267.22
1285899985
190259510.4
1095640475
119103228.8
Year
2003
2004
234787.19
259726.15
51346217.62 56551284.42
10356955.2 11501652.57
40989262.43 45049631.86
-24299017.9 -28064162.3
-6218425.98 -3765144.43
e out from business for inventory
2005
267358.22
58040985.09
11663510.45
46377474.64
-29593612.29
-1529450.002
2003
2004
2005
2006
2007
4100000
980000
0
980000
0
980000
1780000
1380000
4140000
1780000
1380000
820000
4960000
1780000
1380000
820000
4960000
1780000
1380000
820000
3980000
1380000
820000
2200000
820000
820000
2002
2250000
739200.00
600000
2400000
300000
6289200
2544000
3745200
2003
2004
2005
2006
2007
600000
3000000
400000
4000000
3300000
700000
300000
3000000
400000
3700000
3457000
243000
3000000
400000
3400000
3503000
-103000
3000000
400000
3400000
3534000
-134000
3000000
400000
3400000
3566000
-166000
2002
42073581.37
33935730.50
3745200
4140000
252650.87
101060.3477
151590.52
4140000
-8429018.54
4100000
8620609.06
0.772
6655110.192
2003
51346217.62
40989262.43
700000
4960000
4696955.20
1878782.079
2818173.12
4960000
-6218425.98
0
13996599.10
0.708
9909592.163
2004
2005
2006
56551284.42 58040985.09 58040985.09
45049631.86 46377474.64 46377474.64
243000
-103000
-134000
4960000
3980000
2200000
6298652.57
7786510.45 9597510.45
2519461.026 3114604.178 3839004.18
3779191.54
4671906.27 5758506.27
4960000
3980000
2200000
-3765144.435 -1529450.002
0
0
0
0
12504335.97 10181356.27 7958506.27
0.65
0.596
0.547
8127818.383 6068088.337 4353302.93
2007
58040985.09
46377474.64
-166000
820000
11009510.45
4403804.18
6605706.27
820000
0
0
7425706.27
0.502
3727704.548