Teuer Furniture (A)

Group 5
Rajesh PGP/19/037
Sakshi PGP/19/166
Arun PGP/19/193
Novi PGP/19/212

Case facts

Seller of high quality designer furniture

Concentrated on second-tier cities
Plan to open 6 showrooms in three years
Target market is upper-income individuals
High inventory holding (48% of COGS)
Showrooms were leased
Majority of capital expenditure was on building interiors
No. of shareholders 187, shares outstanding 9,945,000
Long-term investors looking for an exit

Decision pending on whether investor buyout should be by cash from

operations or through equity

Assumptions

Sales growth for ages 7 and beyond are combined into one
average
COGS, SG&A and advertising as a percentage of sales
A/R as a percentage of sales of that year
Inventory, A/P as a percentage of COGS of next year
Depreciation was taken to be straight-line for 5 years
Lease increased at a rate of 2% per year
Corporate expenses was 5% of sales
Constant tax rate of 40%
WACC of 12.1%, long term growth rate is 3.5%

Excel output and results

Enterprise value = $328,126,000

Per share value = $32.99

Microsoft Excel
Worksheet

Thank You!