FINM7044 Assignment 1 Group Company Model

Profit and loss statement of Adelaide Brighton Ltd
1 2
Actual Actual Actual Plan Plan
in € million Year t-2 t-1 t0 t1 t2
Revenues 1,165.0 1,347.0 1,485.0 1,522.1 1,570.8
(+) Changes in finished goods, inventories and work in progres 14.4 17.2 11.8 -5.2 3.1
Total revenues 1,179.4 1,364.2 1,496.8 1,516.9 1,573.9
(-) Cost of materials 590.1 691.0 759.8 773.6 802.7
(-) Cost of purchased services 48.0 71.3 61.0 68.3 67.7
Gross profit 541.3 601.9 676.0 675.0 703.5
(-) Personnel expenses 318.4 341.1 365.2 375.1 386.8
(-) Depreciation 43.1 46.4 56.6 64.8 68.5
(-) Amortization of goodwill 7.4 10.1 10.1 10.1 10.1
(-) Other operating expenses 129.7 163.7 179.6 184.7 190.4
(+) Other operating income 13.2 16.7 11.3 12.8 12.0
Earnings before interest and taxes (EBIT) 55.9 57.3 75.8 53.1 59.8
(+) Income from participations 7.0 10.2 15.8 0.0 0.0
(+) Interest income 1.1 1.2 1.1 1.0 1.1
(-) Interest expenses 12.9 12.6 16.5 16.4 15.7
(+) Financial result -4.8 -1.2 0.4 -15.4 -14.7
Earnings before taxes (EBT) 51.1 56.1 76.2 37.8 45.1
(-) Taxes on income 18.2 19.3 27.5 14.6 17.4
Earnings after taxes (EAT) 32.9 36.8 48.7 23.2 27.7
Minority interests 0.0 0.6 0.9 0.0 0.0
Net income (EATM) 32.9 36.2 47.8 23.2 27.7
(+) Balance sheet profit at the beginning of the financial year 41.0 54.1 65.8 83.1 95.8
(-) Allocation to reserves 4.5 5.3 6.1 3.5 4.2
(-) Dividend payments 15.3 19.2 24.4 6.9 8.3
Balance sheet profit at the end of the financial year 54.1 65.8 83.1 95.8 111.1
Total Assets of Adelaide Brighton Ltd
Intangible 74.4 117.8 106.8 96.7 86.6
Thereof goodwill 60.7 100.0 89.9 79.8 69.7
Thereof other intangible assets 13.7 17.8 16.9 16.9 16.9
Tangible assets 184.8 197.8 241.3 255.0 282.0
Thereof land and buildings 95.5 98.7 113.1 120.0 130.0
Thereof technical equipment and machines 41.6 46.3 61.3 65.0 75.0
Thereof other tangible assets 47.7 52.8 66.9 70.0 77.0
Financial assets 10.3 14.9 13.1 13.1 13.1
Fixed assets 269.5 330.5 361.2 364.8 381.7
Raw materials and supplies 54.0 56.5 62.5 63.7 66.1
Work in progress 32.2 38.6 44.0 42.5 44.1
Finished goods and merchandise 27.5 38.3 44.7 41.0 42.5
Prepayments on inventories 0.0 1.1 0.9 0.9 0.9
Inventories 113.7 134.5 152.1 148.1 153.6
Trade receivables 150.2 159.3 233.5 240.2 243.2
Receivables from partners 4.2 6.1 4.1 4.1 4.1
Other assets 21.1 44.5 43.7 44.1 45.6
Receivables and other assets 175.5 209.9 281.3 288.4 292.8
Liquid assets 32.2 35.9 32.9 35.5 39.2
Current assets 321.4 380.3 466.3 472.0 485.6
Total assets 590.9 710.8 827.5 836.8 867.3
Check sum 0.0 0.0 0.0 0.0 0.0

Total equity and liabilities of Adelaide Brighton Ltd
Subscribed capital 64.5 80.0 80.0 80.0 80.0
Reserve 10.0 15.3 21.4 24.9 29.0
Net income for the year 54.1 65.8 83.1 95.8 111.1
Equity 128.6 161.1 184.5 200.7 220.1
Minority interests 0.0 11.8 13.0 13.0 13.0
Long-term provisions 35.3 36.2 39.5 42.5 45.5
Short-term provisions 50.3 49.4 63.6 65.5 67.5
Provisions 85.6 85.6 103.1 108.0 113.0
Long-term bank debt 75.9 87.8 117.2 105.0 115.0
Short-term bank debt 60.3 75.8 69.5 75.0 75.0
Other long-term interest-bearing liabilities 0.0 0.0 0.0 0.0 0.0
Short-term bank debt 2.0 1.5 3.2 3.1 3.2
Trade payables 117.6 158.5 167.2 169.3 175.0
Payables to partners 60.4 34.5 65.2 56.0 43.0
Payables to affiliated companies 10.2 11.9 7.8 7.8 7.8
Other liabilities 50.3 82.3 96.8 98.9 102.1
Liabilities 376.7 452.3 526.9 515.1 521.2
Total equity and liabilities 590.9 710.8 827.5 836.8 867.3
Check sum 0.0 0.0 0.0 0.0 0.0

3 4 5
Plan Plan Plan
t3 t4 t5
1,676.1 1,758.2 1,830.3
5.9 4.5 3.9
1,682.0 1,762.7 1,834.2
857.8 899.0 935.4
69.0 72.3 75.2
755.2 791.5 823.6
406.9 423.8 439.4
75.7 79.2 81.9
10.1 10.1 10.1
198.2 209.3 220.2
9.8 7.4 2.4
74.0 76.4 74.4
0.0 0.0 0.0
1.2 1.2 1.2
15.1 13.7 11.9
-13.9 -12.5 -10.6
60.1 63.9 63.7
23.2 24.7 24.6
36.9 39.2 39.1
0.0 0.0 0.0
36.9 39.2 39.1
111.1 131.4 152.9
5.5 5.9 5.9
11.1 11.8 11.7
131.4 152.9 174.4

Plan Plan Plan
t3 t4 t5
76.5 66.4 56.3
59.6 49.5 39.4
16.9 16.9 16.9
295.0 305.0 305.0
130.0 130.0 130.0
80.0 85.0 85.0
85.0 90.0 90.0
13.1 13.1 13.1
384.6 384.5 374.4
70.6 74.0 76.1
47.1 49.4 51.4
45.4 47.6 49.5
0.9 0.9 0.9
164.0 171.9 177.9
259.4 272.2 283.3
4.1 4.1 4.1
48.6 51.0 53.1
312.2 327.2 340.5
40.3 41.4 46.9
516.5 540.6 565.3
901.1 925.1 939.7
0.0 0.0 0.0

Plan Plan Plan
t3 t4 t5
80.0 80.0 80.0
34.6 40.4 46.3
131.4 152.9 174.4
245.9 273.4 300.7
13.0 13.0 13.0
48.5 51.5 54.5
72.1 75.6 78.7
120.6 127.1 133.2
110.0 95.6 82.0
65.0 60.0 55.0
0.0 0.0 0.0
3.4 3.6 3.7
186.4 195.3 203.2
40.0 35.0 22.0
7.8 7.8 7.8
108.9 114.3 119.0
521.6 511.6 492.7
901.1 925.1 939.7
0.0 0.0 0.0

in € million t-2 t-1 t0 t1 t2 t3 t4 t5
revenues 1165.0 1347.0 1485.0 1522.1 1570.8 1676.1 1758.2 1830.3
EBITDA 106.4 113.8 142.5 128.1 138.4 159.9 165.7 166.4
EBITA 63.3 67.4 85.9 63.2 69.9 84.1 86.5 84.5
EBIT 55.9 57.3 75.8 53.1 59.8 74.0 76.4 74.4
EBT 51.1 56.1 76.2 37.8 45.1 60.1 63.9 63.7
EAT 32.9 36.8 48.7 23.2 27.7 36.9 39.2 39.1
EATM 32.9 36.2 47.8 23.2 27.7 36.9 39.2 39.1
in % of total revenues t-2 t-1 t0 t1 t2 t3 t4 t5
EBITDA 9.1% 8.4% 9.6% 8.4% 8.8% 9.5% 9.4% 9.1%
EBITA 5.4% 5.0% 5.8% 4.2% 4.5% 5.0% 4.9% 4.6%
EBIT 4.8% 4.3% 5.1% 3.5% 3.8% 4.4% 4.3% 4.1%
EBT 4.4% 4.2% 5.1% 2.5% 2.9% 3.6% 3.6% 3.5%
EAT 2.8% 2.7% 3.3% 1.5% 1.8% 2.2% 2.2% 2.1%
EATM 2.8% 2.7% 3.2% 1.5% 1.8% 2.2% 2.2% 2.1%
cost of materials 590.1 691.0 759.8 773.6 802.7 857.8 899.0 935.4
cost of purchased services 48.0 71.3 61.0 68.3 67.7 69.0 72.3 75.2
personnel expenses 318.4 341.1 365.2 375.1 386.8 406.9 423.8 439.4
depreciation 43.1 46.4 56.6 64.8 68.5 75.7 79.2 81.9
other operating expenses 129.7 163.7 179.6 184.7 190.4 198.2 209.3 220.2
in % of total revenues t-2 t-1 t0 t1 t2 t3 t4 t5
cost of materials 50.0% 50.7% 50.8% 51.0% 51.0% 51.0% 51.0% 51.0%
cost of purchased services 4.1% 5.2% 4.1% 4.5% 4.3% 4.1% 4.1% 4.1%
personnel expenses 27.0% 25.0% 24.4% 24.7% 24.6% 24.2% 24.0% 24.0%
depreciation 3.7% 3.4% 3.8% 4.3% 4.4% 4.5% 4.5% 4.5%
other operating expenses 11.0% 12.0% 12.0% 12.2% 12.1% 11.8% 11.9% 12.0%
Calculation of the Adelaide Brighton Ltd working capital
in Mio. € t-2 t-1 t0 t1 t2 t3 t4 t5
raw materials and supplies 54.0 56.5 62.5 63.7 66.1 70.6 74.0 76.1
unfinished goods and services 32.2 38.6 44.0 42.5 44.1 47.1 49.4 51.4
finished goods and merchandise 27.5 38.3 44.7 41.0 42.5 45.4 47.6 49.5
prepayments 0.0 1.1 0.9 0.9 0.9 0.9 0.9 0.9
trade receivables 150.2 159.3 233.5 240.2 243.2 259.4 272.2 283.3
receivables from affiliated companies 4.2 6.1 4.1 4.1 4.1 4.1 4.1 4.1
other current assets 21.1 44.5 43.7 44.1 45.6 48.6 51.0 53.1
payments received 2.0 1.5 3.2 3.1 3.2 3.4 3.6 3.7
trade payables 117.6 158.5 167.2 169.3 175.0 186.4 195.3 203.2
other short-term liabilities 50.3 82.3 96.8 98.9 102.1 108.9 114.3 119.0
working capital 119.3 102.1 166.2 165.2 166.0 177.4 185.9 192.5
working capital ratio 10.2% 7.6% 11.2% 10.9% 10.6% 10.6% 10.6% 10.5%
Calculation of the Adelaide Brighton Ltd capital expenditure
in Mio. € t-2 t-1 t0 t1 t2 t3 t4 t5

Intangible assets 74.4 117.8 106.8 96.7 86.6 76.5 66.4 56.3
Fixed assets 184.8 197.8 241.3 255.0 282.0 295.0 305.0 305.0
Depreciation 43.1 46.4 56.6 64.8 68.5 75.7 79.2 81.9
Amortization 7.4 10.1 10.1 10.1 10.1 10.1 10.1 10.1
Capital Expenditure 112.9 99.2 78.5 95.5 88.7 89.2 81.9
Calculation of the Adelaide Brighton Ltd financial debt
Long-term bank debt 75.9 87.8 117.2 105.0 115.0 110.0 95.6 82.0
Short-term bank deb 60.3 75.8 69.5 75.0 75.0 65.0 60.0 55.0
Other long-term interest-bearing liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Payables to partners* 60.4 34.5 65.2 56.0 43.0 40.0 35.0 22.0
Payables to affiliated companies* 10.2 11.9 7.8 7.8 7.8 7.8 7.8 7.8
Financial debt 206.8 210.0 259.7 243.8 240.8 222.8 198.4 166.8
*The payables to partners and affiliated companies are assumed to be loans granted to the Adelaide Brighton Ltd. The type of liability
(loan vs. trade payables) has to be put into question for the company analysis.
Cash flow statement
in € million t-1 t0 t1 t2 t3 t4 t5
EATM 36.2 47.8 23.2 27.7 36.9 39.2 39.1

Depreciation and amortisation on intangible assets 56.5 66.7 74.9 78.6 85.8 89.3 92.0
Change in accruals 0.0 17.5 4.9 5.1 7.5 6.5 6.1
Change in trade receivables -9.1 -74.2 -6.7 -3.0 -16.3 -12.7 -11.2
Change in receivables from affiliated companies -1.9 2.0 0.0 0.0 0.0 0.0 0.0
Change in other assets -23.4 0.8 -0.4 -1.4 -3.1 -2.4 -2.1
Change in raw materials and supplies -20.8 -17.6 4.0 -5.5 -10.4 -7.9 -6.0
Change in payments received -0.5 1.7 -0.1 0.1 0.2 0.2 0.1
Change in trade payables 40.9 8.7 2.1 5.7 11.3 8.9 7.9
Change in other liabilities 32.0 14.5 2.1 3.2 6.8 5.3 4.7
Cash inflow from operating activities 109.9 67.9 103.9 110.5 118.9 126.5 130.7
Change in intangible assets 43.4 -11.0 -10.1 -10.1 -10.1 -10.1 -10.1
Change in tangible assets 13.0 43.5 13.7 27.0 13.0 10.0 0.0
Change in financial assets -4.6 1.8 0.0 0.0 0.0 0.0 0.0
Depreciation and amortisation on intangible assets 56.5 66.7 74.9 78.6 85.8 89.3 92.0
Cash outflow from investing activities 108.3 101.0 78.5 95.5 88.7 89.2 81.9
Change interest-bearing liabilities 3.2 49.7 -15.9 -3.0 -18.0 -24.4 -31.6
Dividends / capital contribution -3.7 -24.4 -6.9 -8.3 -11.1 -11.8 -11.7
Change in minorities 11.8 1.2 0.0 0.0 0.0 0.0 0.0
Cash inflow/outflow from financing activities 11.3 26.5 -22.8 -11.3 -29.1 -36.2 -43.3
Net cash flow 12.9 -6.6 2.6 3.7 1.1 1.1 5.5
Liquid assets as at 1 January 32.2 35.9 32.9 35.5 39.2 40.3 41.4
Liquid assets as at 31 January 35.9 32.9 35.5 39.2 40.3 41.4 46.9
Difference !=! Net cash flow 3.7 -3.0 2.6 3.7 1.1 1.1 5.5
Checksum 9.2 -3.6 0.0 0.0 0.0 0.0 0.0

WACC Approach (constant capital structure)
Cost of equity Cost of debt
Risk-free interest rate
Risk-free return (15-30 years) 5.00%
Cost of debt
General market risk Risk-free return (15-30 years) 5.00%
Forecast Beta (levered Beta) 0.79 + Risik premium 1.50%
* Market risk premium 5.50% = 9.35% = Cost of debt before taxes 6.50% = 3.99%
= Individual market risk premium 4.35% - Corporate taxes 2.51%
= Cost of debt after taxes 3.99%
Company-specific risk
Individual risk agio 0.00%
Equity ratio Err:522 Debt ratio Err:522
Weighted Average Cost of Capital (WACC)
Err:522
WACC Approach (target capital structure)
Cost of equity Cost of debt
Cost of debt
General market risk Risk-free return (15-30 years) 5.00%
Forecast Beta (levered Beta) 0.79 + Risik premium 1.50%
* Market risk premium 5.50% = 9.35% = Cost of debt before taxes 6.50% = 3.99%
= Individual market risk premium 4.35% - Corporate taxes 2.51%
= Cost of debt after taxes 3.99%
Equity ratio Err:522 Debt ratio Err:522
Weighted Average Cost of Capital (WACC)
Err:522
Enterprise value at the valuation date Err:522
Interest-bearing liabilities at the valuation date 266.6
Equity value at the valuation date Err:522
Equity ratio at the valuation date Err:522
Debt ratio at the valuation date Err:522
Terminal Value Err:522
Interest-bearing liabilities in the terminal value 168.5
Equity value in the terminal value Err:522
Equity ratio in the terminal value Err:522
Debt ratio in the terminal value Err:522
TV(%) Err:522
Weighting of the capital structure in the terminal value Err:522
Weighting of the current capital structure Err:522
Weighted average equity ratio Err:522

APV Approach
Cost if equity
General market risk
Forecast Beta (unlevered Beta) 0.64
* Market risk premium 5.50% = 8.52%
= Individual market risk premium 3.52%

Equity Approach
Cost if equity
General market risk
Forecast Beta (levered Beta) 0.79
* Market risk premium 5.50% = 9.35%
= Individual market risk premium 4.35%

WACC Approach (constant capital structure)
in € million t1 t2 t3 t4 t5 TV
1 2 3 4 5 5
Discount rate Err:522
Multiple Err:522 Err:522 Err:522 Err:522 Err:522 Err:522
Operating free cash flow 34.9 24.0 38.7 44.9 55.3 41.2
NPV of the cash flows and terminal value Err:522 Err:522 Err:522 Err:522 Err:522 Err:522
+ Sum of the present values of the cash flows Err:522
+ Present value of Terminal Value Err:522
Share of TV in the sum of the cash flows Err:522
= Enterprise Value Err:522
+ Cash position (liquid assets) 33.3
+ Non-operating assets 0.0
= Entity Value Err:522
- Interest-bearing liabilities 266.6
= Equity value 31/08 year 1 Err:522

WACC Approach (target capital structure)
1 2 3 4 5 5
Discount rate Err:522
Multiple Err:522 Err:522 Err:522 Err:522 Err:522 Err:522
NPV of the cash flows and terminal value Err:522 Err:522 Err:522 Err:522 Err:522 Err:522
+ Sum of the present values of the cash flows Err:522
+ Present value of Terminal Value Err:522
Share of TV in the sum of the cash flows Err:522
= Enterprise Value Err:522
= Entity Value Err:522
= Equity value 31/08 year 1 Err:522

APV Approach
1 2 3 4 5 5
Discount rate 8.52%
Multiple 0.9723 0.8960 0.8256 0.7608 0.7011 0.7011
Terminal Value 547.8
NPV of the cash flows and terminal value 33.9 21.5 31.9 34.2 38.8 384.0
Discount rate (tax shield) 6.50%
Multiple 0.9787 0.9190 0.8629 0.8102 0.7608 0.7608
Cash flows of the tax shield 6.3 6.1 5.8 5.3 4.6 4.2
Terminal value 65.1
Present value of cash flows of the tax shield and terminal value of the tax 6.2 5.6 5.0 4.3 3.5 49.5
+ Present value of the operating free cash flows 160.3
+ Present value of the terminal value (oFCF) 384.0
+ Present value of the cash flows of the tax shield 24.6
+ Present value of the terminal value (tax shield) 49.5
= Enterprise Value 618.5
= Entity Value 651.8
= Equity value 31/08 year 1 385.2

Equity Approach
1 2 3 4 5 5
Discount rate 9.35%
Multiple 0.9697 0.8868 0.8110 0.7417 0.6783 0.6783
Flow to equity 8.9 11.4 11.5 12.1 16.4 36.1
Terminal value 433.1
Present value of flows to equity and present value of the terminal value 8.6 10.1 9.3 9.0 11.1 293.8
+ Present value of flows to equity 48.2
+ Present value of the terminal value 293.8
Share of TV in the sum of the cash flows 85.9%

Calculation of the Adelaide Brighton Ltd operating free cash flows
Earnings before interest and taxes (EBIT) 53.1 59.8 74.0 76.4 74.4 75.1
- Adjusted taxes on EBIT 20.5 23.1 28.6 29.5 28.7 29.0
= NOPLAT 32.6 36.7 45.4 46.9 45.6 46.1
+ Depreciation and amortization 74.9 78.6 85.8 89.3 92.0 92.9
+ Changes in long-term provisions 3.0 3.0 3.0 3.0 3.0 0.0
+ Changes in short-term provisions 1.9 2.1 4.5 3.5 3.1 0.8
= Gross cash flow 112.4 120.4 138.8 142.7 143.7 139.8
- Capital expenditure 78.5 95.5 88.7 89.2 81.9 96.7
- Changes in working capital -1.0 0.9 11.3 8.5 6.5 1.9
= Operating free cash flow 34.9 24.0 38.7 44.9 55.3 41.2
Calculation of the Automotive Supplier GmbH’s flows to equity
Earnings before interest and taxes (EBIT) 53.1 59.8 74.0 76.4 74.4 75.1
- Interest expenses 16.4 15.7 15.1 13.7 11.9 11.0
= Earnings before taxes (EBT)* 36.8 44.1 59.0 62.7 62.5 64.1
- Taxes on EBT* 14.2 17.0 22.8 24.2 24.2 24.8
= Earnings after taxes (EAT) 22.6 27.0 36.2 38.5 38.3 39.4
+ Depreciation and amortization 74.9 78.6 85.8 89.3 92.0 92.9
+ Changes in long-term provisions 3.0 3.0 3.0 3.0 3.0 0.0
+ Changes in short-term provisions 1.9 2.1 4.5 3.5 3.1 0.8
- Capital expenditure 78.5 95.5 88.7 89.2 81.9 96.7
- Changes in working capital -1.0 0.9 11.3 8.5 6.5 1.9
+ Changes in financial debt -15.9 -3.0 -18.0 -24.4 -31.6 1.7
= Flow to equity 8.9 11.4 11.5 12.1 16.4 36.1
Operating free cash flow (entity approach) 34.9 24.0 38.7 44.9 55.3 41.2
- Interest expenses 16.4 15.7 15.1 13.7 11.9 11.0
+ Corporate tax savings on debt interest 6.3 6.1 5.8 5.3 4.6 4.2
+ Decrease/increase in interest-bearing liabilities -15.9 -3.0 -18.0 -24.4 -31.6 1.7
= Flow to equity (equity approach) 8.9 11.4 11.5 12.1 16.4 36.1
Growth rate in the terminal value 1% 1% Enity Approach Equity Approach
Determination of oFCF oFCF FtE FtE
in € million year 5 TV year 5 TV
Total revenues (reported) 1830.3 1848.6
EBIT 74.4 75.1 74.4 75.1

- Interest expenses (6.5%)* 11.9 11.0
- Corporate taxes on EBIT 28.7 29.0
- Corporate taxes on EBT 24.2 24.8
+ Depreciation and amortization 92.0 92.9 92.0 92.9
Short-term provisions 78.7 79.5 78.7 79.5
+ Changes in short-term provisions 3.1 0.8 3.1 0.8
Long-term provisions 54.5 54.5 54.5 54.5
+ Changes in long-term provisions 3.0 0.0 3.0 0.0
Tangible fixed assets 361.3 364.9 361.3 364.9
- Capital expenditure (investments in fixed assets) 81.9 96.6 81.9 96.6
Working capital 192.5 194.4 192.5 194.4
- Changes in working capital 6.5 1.9 6.5 1.9
= Operating free cash flow 55.3 41.3
Financial debt 166.8 166.8
+ Changes in financial debt -31.6 1.7
= Flow to equity 16.4 36.3
=> Terminal value** Err:522 434.7
*Attention: In the calculation of the interest expenses in year 5, the financial debt at the end of year 4 is here included as well.
The interest expenses in the terminal value in the equity approach is calculated by multiplying the interest rate of 6.5% with the financial debt position
in the terminal value (€ 168.5m)
** For the determination of the discount rates necessary for the calculation of the TV compare 3.3
Profit and loss statement of Adelaide Brighton Ltd (actual)
Actual Actual Actual
in € million year t-2 t-1 t0
Revenues 1,165.0 1,347.0 1,485.0
(+) Changes in finished goods, inventories and work in progress 14.4 17.2 11.8
Total revenues 1,179.4 1,364.2 1,496.8
(-) Cost of materials 590.1 691.0 759.8
(-) Cost of purchased services 48.0 71.3 61.0
Gross profit 541.3 601.9 676.0
(-) Personnel expenses 318.4 341.1 365.2
(-) Depreciation 43.1 46.4 56.6
(-) Amortization of goodwill 7.4 10.1 10.1
(-) Other operating expenses 129.7 163.7 179.6
(+) Other operating income 13.2 16.7 11.3
Earnings before interest and taxes (EBIT) 55.9 57.3 75.8
(+) Income from participations 7.0 10.2 15.8
(+) Interest income 1.1 1.2 1.1
(-) Interest expenses 12.9 12.6 16.5
Earnings before taxes (EBT) 51.1 56.1 76.2
(-) Taxes on income 18.2 19.3 27.5
Earnings after taxes (EAT) 32.9 36.8 48.7
Minority interests 0.0 0.6 0.9
Net income (EATM) 32.9 36.2 47.8
(+) Balance sheet profit at the beginning of the financial year 41.0 54.1 65.8
(-) Allocation to reserves 4.5 5.3 6.1
(-) Dividend payments 15.3 19.2 24.4
Balance sheet profit at the end of the financial year 54.1 65.8 83.1
Total Assets of Adelaide Brighton Ltd (actual)
Intangible 74.4 117.8 106.8
Thereof goodwill 60.7 100.0 89.9
Thereof other intangible assets 13.7 17.8 16.9
Tangible assets 184.8 197.8 241.3
Thereof land and buildings 95.5 98.7 113.1
Thereof technical equipment and machines 41.6 46.3 61.3
Thereof other tangible assets 47.7 52.8 66.9
Financial assets 10.3 14.9 13.1
Fixed assets 269.5 330.5 361.2
Raw materials and supplies 54.0 56.5 62.5
Work in progress 32.2 38.6 44.0
Finished goods and merchandise 27.5 38.3 44.7
Prepayments on inventories 0.0 1.1 0.9
Inventories 113.7 134.5 152.1
Trade receivables 150.2 159.3 233.5
Receivables from partners 4.2 6.1 4.1
Other assets 21.1 44.5 43.7
Receivables and other assets 175.5 209.9 281.3
Liquid assets 32.2 35.9 32.9
Current assets 321.4 380.3 466.3
Total assets 590.9 710.8 827.5

Total equity and liabilities (actual)
Subscribed capital 64.5 80.0 80.0
Reserve 10.0 15.3 21.4
Net income for the year 54.1 65.8 83.1
Equity 128.6 161.1 184.5
Minority interests 0.0 11.8 13.0
Long-term provisions 35.3 36.2 39.5
Short-term provisions 50.3 49.4 63.6
Provisions 85.6 85.6 103.1
Long-term bank debt 75.9 87.8 117.2
Short-term bank debt 60.3 75.8 69.5
Other long-term interest-bearing liabilities 0.0 0.0 0.0
Short-term bank debt 2.0 1.5 3.2
Trade payables 117.6 158.5 167.2
Payables to partners 60.4 34.5 65.2
Payables to affiliated companies 10.2 11.9 7.8
Other liabilities 50.3 82.3 96.8
Liabilities 376.7 452.3 526.9
Total equity and liabilities 590.9 710.8 827.5

Profit and loss statement of Adelaide Brighton Ltd: Assumptions
Actual Actual Actual Plan Plan Plan Plan Plan
year t-2 t-1 t0 t1 t2 t3 t4 t5
Growth of revenues in % 15.6% 10.2% 2.5% 3.2% 6.7% 4.9% 4.1%
Changes in finished goods, inventories and work in progress -5.2 3.1 5.9 4.5 3.9
Cost of materials to total revenues in % 50.0% 50.7% 50.8% 51.0% 51.0% 51.0% 51.0% 51.0%
Cost of purchased services to total revenues in % 4.1% 5.2% 4.1% 4.5% 4.3% 4.1% 4.1% 4.1%
365.2
thereof variable 60% 219.1 14.76% 14.76% 14.76% 14.76% 14.76%
thereof fixed 40% 146.1 150.5 155.0 159.6 164.4 169.3
growth of fixed personnel expenses in % 3.0% 3.0% 3.0% 3.0% 3.0%
Depreciation expense ratio (average year -1 and 0 of fixed assets of the previous year) 25.1% 28.6% 26.9% 26.9% 26.9% 26.9% 26.9%
Amortization of goodwill 7.4 10.1 10.1 10.1 10.1 10.1 10.1 10.1
Other operating expenses 179.6
variable 30% 53.9 3.63% 3.63% 3.63% 3.63% 3.63%
fixed 70% 125.7 129.5 133.4 137.4 141.5 145.7
growth of fixed other operating expenses in % 3.0% 3.0% 3.0% 3.0% 3.0%
fixed costs 0.0 0.0 0.0 4.0 4.0
Other operating income 13.2 16.7 11.3 12.8 12.0 9.8 7.4 2.4
Income from participations 7.0 10.2 15.8 0.0 0.0 0.0 0.0 0.0
Interest rate (deposit) 3.7% 3.1% 3.0% 3.0% 3.0% 3.0% 3.0%
Interest ration (loans) 6.0% 7.0% 6.5% 6.5% 6.5% 6.5% 6.5%
Tax rate 35.6% 34.4% 36.1% 38.65% 38.65% 38.65% 38.65% 38.65%
Minority interests 0.0 0.6 0.9 0.0 0.0 0.0 0.0 0.0
Allocation to reserves ratio 13.7% 14.6% 12.8% 15.0% 15.0% 15.0% 15.0% 15.0%
Pay-out ratio 30.0% 30.0% 30.0% 30.0% 30.0%

Total Assets of Adelaide Brighton Ltd: Assumptions
Intangibel assets 74.4 117.8 106.8 96.7 86.6 76.5 66.4 56.3
thereof goodwill 60.7 100.0 89.9 79.8 69.7 59.6 49.5 39.4
thereof other intangible assets 13.7 17.8 16.9 16.9 16.9 16.9 16.9 16.9
Tangible assets 184.8 197.8 241.3 241.3 255.0 282.0 295.0 305.0
thereof land and buildings 95.5 98.7 113.1 120.0 130.0 130.0 130.0 130.0
thereof technical equipment and machines 41.6 46.3 61.3 65.0 75.0 80.0 85.0 85.0
thereof other tangible assets 47.7 52.8 66.9 70.0 77.0 85.0 90.0 90.0
Financial assets 10.3 14.9 13.1 13.1 13.1 13.1 13.1 13.1
Raw materials and supplies 54.0 56.5 62.5 63.7 66.1 70.6 74.0 76.1
Work in progress 32.2 38.6 44.0 42.5 44.1 47.1 49.4 51.4
Finished goods and merchandise 27.5 38.3 44.7 41.0 42.5 45.4 47.6 49.5
Prepayments on inventories 0.0 1.1 0.9 0.9 0.9 0.9 0.9 0.9
Days sales outstanding 46.4 42.6 56.6 57.6 56.5 56.5 56.5 56.5
Receivables from partners 4.2 6.1 4.1 4.1 4.1 4.1 4.1 4.1
Other assets to revenues in % 1.8% 3.3% 2.9% 2.9% 2.9% 2.9% 2.9% 2.9%
Total equity and liabilities of Adelaide Brighton Ltd: Assumptions
Subscribed capital 64.5 80.0 80.0 80.0 80.0 80.0 80.0 80.0
Growth of change of long-term provisions 0.9 3.3 3.0 3.0 3.0 3.0 3.0
Short-term provision to revenues in % 4.3% 3.7% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Change of long-term bank debt 11.9 29.4 -12.2 10.0 -5.0 -14.4 -13.6
Change of short-term bank debt 15.5 -6.3 5.5 0.0 -10.0 -5.0 -5.0
Change of other long-term interest-bearing liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Payments received to inventories in % 1.8% 1.1% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1%
Days payables outstanding 67.3 75.9 74.4 73.4 73.4 73.4 73.4 73.4
Payables to partners 60.4 34.5 65.2 56.0 43.0 40.0 35.0 22.0
Payables to affiliated companies 10.2 11.9 7.8 7.8 7.8 7.8 7.8 7.8
Other liabilities to revenues in % 4.3% 6.1% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%
Other assumptions
Last actual year 12/31/2009
Date of valuation 8/31/2010
Year in days 365.0
Days between date of valuation and first plan year 122.0
Assumptions terminal value (TV)
Growth rate in terminal value 1.0%
Assumptions non-operating assets
Non-operating assets at date of valuation 0.0

Cost of Capital: Assumptions
Cost of equity
Risk-free rate 5.0%
Market risk premium 5.5%
Beta (levered) 0.79
Beta (unlevered) 0.64
Cost of debt
Risk premium 1.5%

A321: Besitzer:
Sales instead of cost of goods sold has been used
Periodic WACC
01.01.t1 01.01.t2 01.01.t3 01.01.t4 01.01.t5

= = = = =
in € million 31.12.t0 31.12.t1 31.12.t2 31.12.t3 31.12.t4 TV
Cost of equity 9.35% 9.35% 9.35% 9.35% 9.35% 9.35%
Cost of debt after taxes 3.99% 3.99% 3.99% 3.99% 3.99% 3.99%
Interest-bearing liabilities 259.7 243.8 240.8 222.8 198.4 168.5
Periodic equity ratio 55.4% 58.5% 60.2% 63.5% 67.5% 72.0%
Periodic debt ratio 44.6% 41.5% 39.8% 36.5% 32.5% 28.0%
Periodic WACC 6.95% 7.12% 7.21% 7.39% 7.60% 7.85%
Value 01.01.t1 582.0
Value 01.01.t2 587.7
Value 01.01.t3 605.5
Value 01.01.t4 610.5
Value 01.01.t5 610.6
Value 01.01.t6 601.8
Operating free cash flow (t+1) 34.9 24.0 38.7 44.9 55.3 41.2
= Enterprise Value 609.0 582.0 compounted to date of valuation
- Non-operating assets 0.0
= Entity Value 642.3

9/9/2023 8:11
Error check = = Input on this sheet
- Historical
Other inpu
------------ ------------ ------------ ------------
Historical Income Statement
Revenues Positive 1225.5 1335.6 1411.0 1394.3
Other Operating Revenues Positive 2.5 2.2 2.1 1.9
Total Operating Revenues 1228.0 1337.8 1413.1 1396.2
Costs of Goods Sold Negative (745.6) (823.5) (884.1) (885.8)
Selling, Gen & Admin Expen Negative
Other Operating Expense Negative
EBITDA 482.4 514.3 529.0 510.4
Depreciation Expense Negative
Reported EBITA 482.4 514.3 529.0 510.4
Goodwill Writedowns Negative
Amortization of Intangibles Negative
Non-Operating Income Positive 4.7 26.1 51.4 14.5
Interest Income Positive
Interest Expense Negative
Restructuring Charges Negative
Special Items
Earnings Before Taxes 487.1 540.4 580.4 524.9
Income Taxes Negative
Minority Interest
Income Before Extraord. Items 487.1 540.4 580.4 524.9
Extraord. Items (After Tax)
Net Income 487.1 540.4 580.4 524.9
Preference dividends Negative
Earnings for common shareholders 487.1 540.4 580.4 524.9
Common dividends Negative
Retained profit 487.1 540.4 580.4 524.9
Statement of changes in equity

Beginning Equity 0.0 0.0 0.0
Retained profit 540.4 580.4 524.9
Other Comprehensive Income (net of tax)
Issue of New Shares/buy back
Goodwill Written Off Negative
Other Adjustments to Equity (540.4) (580.4) (524.9)
Ending Equity 0.0 0.0 0.0 0.0
Historical Balance Sheet

Operating Cash Positive
Excess marketable securitiesPositive
Accounts Receivable Positive
Inventories Positive
Other Current Assets Positive
Total Current Assets 0.0 0.0 0.0 0.0
Net Property Plant and EquipPositive
Goodwill Positive
Acquired Intangible Assets Positive
Other Operating Assets Positive
Investments & Advances Positive
Deferred tax Asset Positive
Other Non-op Assets Positive
Retirement Related Assets (nPositive
Total Assets 0.0 0.0 0.0 0.0
Short Term Debt Positive

Accounts Payable Positive
Tax Payable Positive
Dividends Payable Positive
Other Current Liabilities Positive
Total Current Liabilities 0.0 0.0 0.0 0.0
Balancing Debt Positive

Long Term Debt Positive
Deferred Income Taxes Positive
Other operating liabilities Positive
Restructuring Provisions Positive
Income smoothing Provision Positive
On-going operating Provisio Positive
Long-term operating ProvisioPositive
Retirement Related Liabilitie Positive
Minority Interest Positive
Preferred Stock Positive
Total Long Term Liabilities 0.0 0.0 0.0 0.0
Total Common Equity Positive
Total Liabs and Equity 0.0 0.0 0.0 0.0
Balance sheet check OK 0.0 0.0 0.0 0.0
Off Balance Sheet Items

Non-operating Income and Taxes
Interest on Excess Cash % 0.0 0.0 0.0
Tax on Interest on Excess C % 0.0 0.0 0.0
Non-oper Component of Inco %
Non-oper Component of Incr in Def Tax Liab
Non-operating component of Positive
Balance Sheet Items
Capital Expenditure Positive
Initial Cumulative Goodwill WrPositive
Initial Cumulative Intangibles Positive
Capitalisation of Operating Leases
Operating Lease - Capitalize Positive
Operating Lease Expense
Interest rate on Operating L %
Life of Leased Asset (Years)
Issued Shares
Number of ordinary shares (aPositive
Number of ordinary shares (yPositive
Additional number of shares ifPositive
Market Value of Common EquPositive
Par value of preference sharePositive
Cost of Capital and Market Rates
Weighted Average Cost of Ca %
Risk Free Rate (10 yr T-bond, %
90-Day Bank Accepted Bill Yi %
Australian Marginal Corporate Tax Rate
Interest rate on Long-term O %
= Input on this sheet = Calculation
------------ ------------ ------------ ------------ ------------ ------------
1558.1 1511.6 1399.9 1320.0 1434.3 1546.8

1.9 119.0 117.1 134.2 134.9 153.5
1560.0 1630.6 1517.0 1454.2 1569.2 1700.3
(1009.9) (1052.5) (983.7) (938.4) (1030.6) (1155.1)
(415.9) (475.6)
(194.5) (201.7)
550.1 578.1 533.3 515.8 (71.8) (132.1)
98.4 114.1
550.1 578.1 533.3 515.8 26.6 (18.0)
(3.0)
(2.2) (1.1) (5.1)
19.6 17.2 5.1 5.7 11.7 72.5
569.7 595.3 538.4 519.3 37.2 46.4
569.7 595.3 538.4 519.3 37.2 46.4
569.7 595.3 538.4 519.3 37.2 46.4
569.7 595.3 538.4 519.3 37.2 46.4
569.7 595.3 538.4 519.3 37.2 46.4
0.0 0.0 0.0 0.0 0.0 0.0

569.7 595.3 538.4 519.3 37.2 46.4
(569.7) (595.3) (538.4) (519.3) (37.2) (46.4)
0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0

FINM7044 Assignment 1 Group Company Model

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FINM7044 Assignment 1 Group Company Model

Uploaded by

Copyright:

Available Formats

Profit and loss statement of Adelaide Brighton Ltd

Actual Actual Actual Plan Plan

in € million Year t-2 t-1 t0 t1 t2

Revenues 1,165.0 1,347.0 1,485.0 1,522.1 1,570.8

Total revenues 1,179.4 1,364.2 1,496.8 1,516.9 1,573.9

(-) Cost of materials 590.1 691.0 759.8 773.6 802.7

(-) Cost of purchased services 48.0 71.3 61.0 68.3 67.7

Gross profit 541.3 601.9 676.0 675.0 703.5

(-) Personnel expenses 318.4 341.1 365.2 375.1 386.8

(-) Depreciation 43.1 46.4 56.6 64.8 68.5

(-) Amortization of goodwill 7.4 10.1 10.1 10.1 10.1

(-) Other operating expenses 129.7 163.7 179.6 184.7 190.4

(+) Other operating income 13.2 16.7 11.3 12.8 12.0

(+) Income from participations 7.0 10.2 15.8 0.0 0.0

(+) Interest income 1.1 1.2 1.1 1.0 1.1

(-) Interest expenses 12.9 12.6 16.5 16.4 15.7

(+) Financial result -4.8 -1.2 0.4 -15.4 -14.7

Earnings before taxes (EBT) 51.1 56.1 76.2 37.8 45.1

(-) Taxes on income 18.2 19.3 27.5 14.6 17.4

Earnings after taxes (EAT) 32.9 36.8 48.7 23.2 27.7

Minority interests 0.0 0.6 0.9 0.0 0.0

Net income (EATM) 32.9 36.2 47.8 23.2 27.7

(-) Allocation to reserves 4.5 5.3 6.1 3.5 4.2

(-) Dividend payments 15.3 19.2 24.4 6.9 8.3

Actual Actual Actual Plan Plan

in € million Year t-2 t-1 t0 t1 t2

Intangible 74.4 117.8 106.8 96.7 86.6

Thereof goodwill 60.7 100.0 89.9 79.8 69.7

Thereof other intangible assets 13.7 17.8 16.9 16.9 16.9

Tangible assets 184.8 197.8 241.3 255.0 282.0

Thereof land and buildings 95.5 98.7 113.1 120.0 130.0

Thereof other tangible assets 47.7 52.8 66.9 70.0 77.0

Financial assets 10.3 14.9 13.1 13.1 13.1

Fixed assets 269.5 330.5 361.2 364.8 381.7

Raw materials and supplies 54.0 56.5 62.5 63.7 66.1

Work in progress 32.2 38.6 44.0 42.5 44.1

Finished goods and merchandise 27.5 38.3 44.7 41.0 42.5

Prepayments on inventories 0.0 1.1 0.9 0.9 0.9

Inventories 113.7 134.5 152.1 148.1 153.6

Trade receivables 150.2 159.3 233.5 240.2 243.2

Receivables from partners 4.2 6.1 4.1 4.1 4.1

Other assets 21.1 44.5 43.7 44.1 45.6

Receivables and other assets 175.5 209.9 281.3 288.4 292.8

Liquid assets 32.2 35.9 32.9 35.5 39.2

Current assets 321.4 380.3 466.3 472.0 485.6

Total assets 590.9 710.8 827.5 836.8 867.3

Check sum 0.0 0.0 0.0 0.0 0.0

Actual Actual Actual Plan Plan

in € million Year t-2 t-1 t0 t1 t2

Subscribed capital 64.5 80.0 80.0 80.0 80.0

Reserve 10.0 15.3 21.4 24.9 29.0

Equity 128.6 161.1 184.5 200.7 220.1

Minority interests 0.0 11.8 13.0 13.0 13.0

Long-term provisions 35.3 36.2 39.5 42.5 45.5

Short-term provisions 50.3 49.4 63.6 65.5 67.5

Provisions 85.6 85.6 103.1 108.0 113.0

Long-term bank debt 75.9 87.8 117.2 105.0 115.0

Short-term bank debt 60.3 75.8 69.5 75.0 75.0

Other long-term interest-bearing liabilities 0.0 0.0 0.0 0.0 0.0

Short-term bank debt 2.0 1.5 3.2 3.1 3.2

Trade payables 117.6 158.5 167.2 169.3 175.0

Payables to partners 60.4 34.5 65.2 56.0 43.0

Payables to affiliated companies 10.2 11.9 7.8 7.8 7.8