FINC3015 Case Study 1 Tutorial Workshop Model

Disclaimer: The contents of this file have been prepared exclusively for the use
2022 Semester 1 FINC3015 students at the University of Sydney for tutorial /
workshop lessons. Numbers have been altered and are only to be used for the
purposes of teaching and should not be used as an indicative valuation of JBH

Legend
Black Formula
Blue Manual input
Green Links to another sheet
Assumptions
pared exclusively for the use of
sity of Sydney for tutorial /
d are only to be used for the
n indicative valuation of JBH.
 FINC3015 Tutorial Case Study: JB Hi-Fi Limited (ASX: JBH)
Financial Statements
Historical
(AU$m, June y/e) FY2018 FY2019 FY2020 FY2021

### Income Statement Assumptions

Revenue Assumptions
Revenue Growth 3.5% 11.6% 12.6%
Cost of Sales / Revenue 78.6% 78.5% 78.6% 77.8%
Occupancy Expense / Revenue 4.5% 4.3% 4.0% 3.3%
Sales and Marketing Expenses / Revenue 10.1% 10.3% 9.9% 9.5%
Administration Expenses / Revenue 0.6% 0.6% 0.5% 0.5%
Other Income / (Expenses) / Revenue 0.0% 0.1% 0.0% 0.0%
Depreciation Expense / Net PP&E 30.5% 31.3% 31.8%
Amortisation Expense / Net Intangibles 0.0% 0.0% 0.0%
Interest Rate on Cash 0.0% 0.9% 0.6%
Interest Rate on Debt 3.0% 8.3% No debt
Tax Rate (Tax / EBT) 28.7% 30.4% 31.8% 29.8%
Abnormals - (1) - -
Change in Shares Oustanding 0 (0) (0)
Dividend Payout Ratio 60.9% 66.0% 70.3% 65.7%

Income Statement
Revenue 6,854 7,095 7,919 8,916
Cost of Sales (5,384) (5,568) (6,225) (6,939)
Gross Profit 1,470 1,527 1,694 1,977
Occupancy Expense (306) (306) (313) (294)
Sales and Marketing Expenses (695) (731) (786) (846)
Administration Expenses (42) (45) (42) (41)
Other Income / (Expenses) 1 (10) - -
EBITDA (Pre-AASB 16) 428 435 553 797
Depreciation (61) (60) (60) (55)
Amortisation - - - -
EBIT 367 375 493 742
Interest Revenue 1 - 1 2
Interest Expense (15) (14) (36) (25)
Pre Tax Profit 353 361 458 719
Tax Expense (101) (110) (146) (214)
NPAT excl. Abnormals 251 251 312 505
Abnormals - (1) - -
Statutory NPAT 251 250 312 505

Weighted Average Diluted Number of Shares 116 116 116 116

Basic EPS (cents/share) 217 215 269 437
DPS (cents/share) 132 142 189 287
Dividends 152 157 172 310

x Balance Sheet Assumptions

Operating Assumptions
Cash / Revenue 1.05% 1.68% 3.18% 2.95%
Recievables (DSO) 11 12 10 9
Inventories (DIO) 60 58 43 49
Other Current Assets 43 35 35 36
Future Tax Benefit - 3 22 30
Other Non-Current Assets 57 41 681 575
Payables (DPO) 45 47 50 41
 Deferred Revenue / Revenue 2.20% 2.30% 2.48% 2.39%
Other Current Liabilities 101 52 295 365
Provisions 13 8 42 43
Other Non-Current Liabilities 145 131 659 549
Capex Assumptions
PP&E Growth Capex (7) (19) (3)
Depreciation (61) (60) (60) (55)
Intangibles Growth Capex - (6) -
Amortisation Expense - - - -
Change in Goodwill 11 0 0
Financing Assumptions
Issuances (Repayments) of Debt (30) (439) -
Change in Share Capital (7) (32) (10)
Change in Reserves 11 13 17

Balance Sheet
Current Assets
Cash 72 119 252 263
Excess Cash
Receivables 205 236 220 212
Inventories 891 887 739 939
Other Current Assets 43 35 35 36
Total Current Assets 1,211 1,277 1,246 1,449

Non Current Assets

Net PP&E 198 192 172 169
Gross PP&E 525 555 682 668
Accumulated Depreciation (326) (364) (510) (499)
Intangibles (ExGW) 290 290 284 284
Goodwill 736 747 747 747
Future Tax Benefit - 3 22 30
Other Non Current Assets 57 41 681 575
Total Non Current Assets 1,281 1,272 1,907 1,806
Total Assets 2,492 2,549 3,152 3,255

Current Liabilities
Overdraft
Payables & Accruals 665 712 854 777
Deferred Revenue 151 163 197 213
Other Current Liabilities 101 52 295 365
Total Current Liabilities 917 927 1,346 1,355

Non Current Liabilities

Long-Term Debt 469 439 - -
Provisions 13 8 42 43
Other Non Current Liabilities 145 131 659 549
Total Non Current Liabilities 627 578 701 592
Total Liabilities 1,544 1,505 2,047 1,947

Shareholder's Equity
Share Capital 442 435 403 393
Reserves 43 54 67 84
Retained Earnings 463 556 636 832
Total Equity 948 1,044 1,106 1,308
Total Liabilities + Equity 2,492 2,549 3,152 3,255

Total Assets 2,452 2,492 3,152 3,255

 Total Liabilities & Shareholder Equity 2,452 2,492 3,152 3,255
Balance Check YES YES YES YES

The Plug
Trial Assets
Trial Liabilities & Equity
The Plug

Cash Flow Statement

Operating Cash Flows
Sales 7,552 7,805 8,759 9,837
Payments to Suppliers and Employees (7,131) (7,374) (7,625) (9,097)
Interest and Bill Discounts Received 1 1 1 2
Interest and Other Finance Costs Paid (15) (14) (36) (25)
Income Taxes Paid (115) (116) (118) (159)
Cash from Operating Activities 292 302 981 559
Investing Cash Flows
Acquisitions - - - -
Capex (54) (59) (43) (58)
Proceeds from Sale of PPE 0 0 0 -
Cash from Investing Activities (54) (59) (43) (58)
Financing Cash Flows
Share Issuance 3 (7) 1 -
Proceeds (Repayments) of Debt (90) (31) (440) -
Debt Issue Costs (1) (1) (0) -
Share Buybacks - - - -
Share Issue Costs - - - -
Dividends Paid (152) (157) (172) (310)
Other Financing Cash Flows - - (195) (179)
Cash from Financing Activities (239) (195) (806) (489)

Net Increase in Cash 1 47 133 12

Cash at Beginning of Period 73 72 119 252
Effects of Exchange Rates 0 0 (0) -
Cash at End of Period 72 119 252 263
 Reminder: The assumptions in this model
are for illustrative purposes only. Your case
Forecast
study requires you to forumlate your own
view and assumptions
FY2022 FY2023E FY2024E FY2025E FY2026E FY2027E

3.5% 4.0% 4.0% 3.5% 3.0% 2.5%

77.5% 78.2% 78.2% 78.0% 77.8% 77.6%
3.3% 4.2% 4.2% 4.2% 4.2% 4.2%
9.5% 9.9% 9.9% 9.9% 9.9% 9.9%
0.5% 0.5% 0.5% 0.5% 0.5% 0.5%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
30.8% 31.1% 31.1% 31.1% 31.1% 31.1% D&A and Interest Calcs use prior year ending
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% balance (or average) - see RHS
0.0% 3.0% 3.0% 3.0% 3.0% 3.0%
No debt 8.0% 8.0% 8.0% 8.0% 8.0%
29.4% 30% 30% 30% 30% 30%
- 0 0 0 0 0
(1) 0 0 0 0 0
65.4% 65.6% 65.6% 65.6% 65.6% 65.6%

9,232 9,601 9,985 10,335 10,645 10,911 𝑅𝑒𝑣𝑒𝑛𝑢𝑒_(𝑡+1 )=𝑅𝑒𝑣𝑒𝑛𝑢𝑒_𝑡∗(1+𝑔)

(7,152) (7,507) (7,807) (8,060) (8,280) (8,465)
2,080 2,095 2,178 2,275 2,365 2,446 𝐶𝑂𝐺𝑆=𝐶𝑜𝑔𝑠/𝑅𝑒𝑣𝑒𝑛𝑢𝑒∗𝑅𝑒𝑣𝑒𝑛𝑢𝑒_𝑡
(303) (407) (424) (439) (452) (463)
(881) (949) (987) (1,021) (1,052) (1,078)
(42) (52) (52) (52) (53) (55) 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛=(𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛/(𝑛𝑒𝑡 𝑃𝑃&𝑒))∗𝑛𝑒𝑡
- - - - - -
855 687 716 764 808 850
(52) (53) - - - - 𝐴𝑚𝑜𝑟𝑡𝑖𝑠𝑎𝑡𝑖𝑜𝑛=(𝐴𝑚𝑜𝑟𝑡𝑖𝑠𝑎𝑡𝑖𝑜𝑛/(𝐼𝑛𝑡𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝑎𝑠𝑠𝑒𝑡𝑠
- - - - - -
803 634 716 764 808 850
- 4 - - - - 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑒𝑣𝑒𝑛𝑢𝑒=𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑜𝑛 𝑐𝑎𝑠ℎ
(20) (5) - - - - 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒=𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑜𝑛 𝑑𝑒𝑏𝑡
783 633 716 764 808 850
(230) (190) (215) (229) (243) (255)
552 443 501 535 566 595 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝑡𝑎𝑥 𝑟𝑎𝑡𝑒=(𝑡𝑎𝑥 𝑒𝑥𝑝𝑒𝑛𝑠𝑒)/𝐸𝐵𝑇
- - - - - -
552 443 501 535 566 595

114 114 114 114 114 114

484 388 439 468 496 521
316 255 288 307 325 342
310 291 329 351 371 390

1.36%
5
58
31
31
506
37
 2.75%
331
43
473

-
(52)
-
-
0

59
(46)
(61)

125.6

132.6
1,135.3
31.2
1,425

169
661
(492)
284
747
30.6
505.7
1,737
3,161

721.6
253.5
331.2
1,306

59.4
42.7
472.7
575
1,881

346.8
22.8
910.7
1,280
3,161

3,161
 3,161
YES

10,195
9,283.5)
1
(20)
(264)
9,911

-
(58)
0
(57)

-
60
(1)
(250)
(1)
(310)
(206)
(707)

(137)
263
(0)
126
 mptions in this model
urposes only. Your case
o forumlate your own
assumptions

alcs use prior year ending

average) - see RHS

𝑒𝑣𝑒𝑛𝑢𝑒_𝑡∗(1+𝑔)
𝑢𝑒∗𝑅𝑒𝑣𝑒𝑛𝑢𝑒_𝑡

𝑎𝑡𝑖𝑜𝑛/(𝑛𝑒𝑡 𝑃𝑃&𝑒))∗𝑛𝑒𝑡 𝑃𝑃&𝐸_(𝑡−1)

𝑡𝑖𝑜𝑛/(𝐼𝑛𝑡𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 (𝑛𝑒𝑡)))∗𝐼𝑛𝑡𝑎𝑛𝑔𝑖𝑏𝑙𝑒 𝑎𝑠𝑠𝑒𝑡𝑠_(𝑡−1 ) (𝑒𝑥 𝑔𝑜𝑜𝑑𝑤𝑖𝑙𝑙)

𝑒=𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑜𝑛 𝑐𝑎𝑠ℎ ∗(𝑐𝑎𝑠ℎ 𝑎𝑛𝑑 𝑒𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠)

𝑒=𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑜𝑛 𝑑𝑒𝑏𝑡+(𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡)

(𝑡𝑎𝑥 𝑒𝑥𝑝𝑒𝑛𝑠𝑒)/𝐸𝐵𝑇