Case 21 Aurora Textile Company - My Version

Aurora.
xls
This spreadsheet supports STUDENT analysis of the

case, "Aurora Textile Company"
(Case 21)
Copyright (C) 2007, by the University of Virginia Darden School Foundation.
Consolidated Statement of Operations for the Fiscal Years

Ending December, 31 1999-2002
($ thousands)
Pounds shipped (000's)

Average selling price / lb
Conversion Cost / lb
Average Raw Material Cost / lb
Net Sales
Raw Material Cost
Cost of Conversion
Gross Margin
SG&A Expenses
Depreciation & Amortization
Operating Profit
Interest Expense
1999
2000
2001
2002
187,673
1.3103
0.4447
0.7077
190,473
1.2064
0.4421
0.6429
151,893
1.2045
0.4465
0.6487
144,116
1.0235
0.4296
0.4509
$245,908
132,812
83,454
29,641
14,603
15,241
(203)
6,777
Other Income (Expense)

Asset Impairments*
Earnings Before Income Tax Provision
Income Tax Provision (Benefit) @ 36% tax rate
Net Earnings
* Costs associated with the shut down of plants
(6,980)
(2,513)
($4,467)
$229,787 $182,955 $147,503

122,461
98,536
64,982
84,212
67,822
61,912
23,114
16,597
20,609
14,218
11,635
10,305
13,005
11,196
9,859
(4,109)
(6,234)
445
6,773
5,130
3,440
1,143
(1,232)
(409)
4,758
7,564
(9,739) (17,354) (10,968)
(3,506)
(6,247)
(3,949)
($6,233)
($11,106)
($7,020)
Consolidated Balance Sheets for the Fiscal Years

Ending December, 31 1999-2002
($ thousands)
1999
2000
2001
2002
$1,144
17,322
34,778
2,774
$56,018
$5,508
11,663
33,155
1,922
$52,247
$2,192
20,390
31,313
712
$54,608
$1,973
26,068
33,278
2,378
$63,697
Property and Equipment

Land
Buildings
Machinery and equipment
Gross PP&E
Less accumulated depreciation
Net PP&E
Goodwill
Other non-current assets
Total Assets
2,654
32,729
230,759
266,142
(147,891)
118,250
1,180
3,516
$178,965
2,594
31,859
220,615
255,068
(147,104)
107,964
1,180
3,499
$164,890
2,516
30,308
197,889
230,713
(146,302)
84,411
1,180
2,824
$143,023
2,505
30,427
190,410
223,342
(154,658)
68,684
1,180
2,430
$135,991
Liabilities
Accounts payable
Accrued compensation and benefits
Accrued interest
Other accrued expenses
Current portion of long-term debt
Total Current Liabilities
Long-term debt
Other long-term liabilities
Total Liabilities
12,236
4,148
1,830
4,083
1,009
$23,306
66,991
16,566
$106,863
7,693
3,712
1,090
3,914
1,730
$18,139
66,991
14,081
$99,211
9,667
4,176
961
3,881
0
$18,685
58,000
11,776
$88,461
10,835
4,730
929
3,657
0
$20,151
58,000
10,297
$88,448
50
15,868
56,184
50
15,678
50
15,668
50
15,668
49,951
$65,679
$164,890
38,845
$54,563
$143,023
31,825
$47,543
$135,991
Assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Other current assets
Total Current Assets
Shareholder's equity
Common stock, par $0.01
Capital surplus
Retained earnings
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity
$72,102
$178,965
Plant Production Capability

Plant
Hunter
Rome
Barton
Butler
Technology
Ring
Rotor
Rotor
Rotor
Product Mix
100% Cotton
100% Cotton
Heather and Poly/Cotton Blends
100% Cotton
Count Range Capacity

600,000
5/1 to 22/1
1,200,000
5/1 to 22/1
800,000
8/1 to 30/1
1,000,000
5/1 to 30/1
Cost of Customer Returns
Price of Yarn Sold

Reimbursement cost
Liability multiplier
Returns as % of Volume
Returns as % of Revenue
Returns as cost/lb
Existing
machine
$5.0
$25.0
5.0
1.50%
7.50%
$0.077
Price of Yarn Sold

Reimbursement cost
Liability multiplier
Returns as % of Volume
Returns as % of Revenue
Returns as cost/lb
Zinser
$10.0
$75.0
7.5
1.00%
7.50%
$0.084
Calculation
(25/5)
(5 x 1.5%)
(7.5% x $1.0235/lb)
Calculation
(75/10)
(7.5 x 1.0%)
(7.5% x $1.0235/lb x 110%)
Monthly
Spot Price $ (contract size 50,000lbs)
2 / 97
74.05
90
3 / 97
73.27
5 / 97
70.01
80
6 / 97
73.58
7 / 97
71.81
70
9 / 97
72.05
10 / 97
68.75
Spot Price (Dollars)
60
12 / 97
67.41
2 / 98
63.90
50
3 / 98
65.64
4 / 98
63.67
40
5 / 98
63.00
6 / 98
81.60
30
7 / 98
81.93
9 / 98
71.52
20
10 / 98
72.32
11 / 98
61.00
10
12 / 98
60.74
2 / 99
63.39
0
3 / 99
64.79
4 / 99
59.42
2 / 97 8 / 97
5 / 99
58.72
6 / 99
49.90
7 / 99
48.20
9 / 99
51.18
10 / 99
49.44
11 / 99
49.80
12 / 99
48.53
2 / 00
57.19
3 / 00
59.31
4 / 00
56.30
5 / 00
56.64
6 / 00
51.60
7 / 00
50.45
9 / 00
62.45
10 / 00
63.60
11 / 00
64.72
12 / 00
64.32
1 / 01
59.30
2 / 01
52.38
3 / 01
53.54
4 / 01
43.83
5 / 01
44.33
6 / 01
42.65
7 / 01
40.61
9 / 01
34.00
10 / 01
32.19
11 / 01
36.23
12 / 01
34.94
2 / 02
34.65
3 / 02
34.53
4 / 02
33.80
2 / 98
8 / 98
2 / 99
8 / 99
2 / 00
Month
8 / 00
5 / 02
6 / 02
7 / 02
8 / 02
9 / 02
10 / 02
11 / 02
12 / 02
32.04
43.77
45.23
45.10
42.30
41.79
47.50
45.98
8 / 99
2 / 00
Month
8 / 00
2 / 01
8 / 01
2 / 02
8 / 02
Interest Rate Yields: January 2003

U.S. Government (% yield)
Treasury bill (1-year)
Treasury note (10-year)
Treasury bond (30-year)
1.24%
3.98%
4.83%
Industrials (% yield)
Prime rate1
AAA (10-year)
AA (10-year)
A (10-year)
BB (10-year)
BBB (10-year)
4.25%
4.60%
4.66%
4.87%
5.60%
6.90%
The prime rate was the short-term interest rate charged by large U.S. banks
for corporate clients with strong credit ratings.
Assumptions
Discount Rate = 10%
Strategic issue:s:
Ten-year timeline
Selling old machine in Mexico - do we still compete in that mark

Zinser becoming widely used by U.S. yarn producers
Is Aurora able to remain in operation for 10 years?
I0 (Initial Investment) at time = 0
BAU
none
TV (Terminal Value) at time = 1
BAU
none
Cash Flow Components
BAU
Volume in units
currently = 500,000 pounds/wk x 52 wks, max =600
Annual growth in volume
2%
Annual inflation (costs & revenue) 1%

Price per unit
$1.0235/pound
Revenue
volume x price
Direct materials/unit
$0.45/pound
Conversion costs incl returns/unit $0.43/pound

Cost of returns (figure) per pound 0.077
Conversion costs excl returns/unit 0.353
Total direct costs
DM+ConvCost+Cost of returns
Indirect costs
7% of revenue
Depreciation
2MM straightline for 4 years = 500,000
Operating Income
Revenue - Dir Costs - Ind Costs - Depreciation
Tax rate
36% stated
NOPAT
OpInc*(1-t)
add back Depreciation
500,000
OCF
NOPAT+D&A
Reinvestment in operations (ST & Lincrease in inverntory (see below)

FCF
OCF-Reinvestment
Days in inventory
30
Days in inventory = 365 / (COGS/Average Inventory)
Days*(COGS/AvgInv) = 365
COGS/AvgInv = 365/days
AvgInv/COGS = days/365
AvgInv = COGS*(days/365)
ompete in that market?
Proposal
$8.05 MM for machine
8.25MM capitalized cost
$0.115MM structural alterations

$0.055MM airflow modification
$0.030MM testing cost
LESS: $0.5MM from sale of existing machine
LESS: $0.54MM tax savings because old machine sells below BV ([$0.5MM - $2.0
PLUS: Training (expense :. after tax) = $0.05MM*(1-36%) = 32k
Proposal
$0.1MM from sale of Zinser
LESS: $0.036MM tax expense because Zinser sells above BV ([$0.1MM - $0.0MM]*
Proposal
5% lower
2%
1%
10% higher :. 1.1*$1.0235 = 1.12585/pound
volume x price
$0.45/pound
0.407/pound
0.084
reduces $0.03/pound (maintenance & power) :. 0.323
7% of revenue
straightline for 10 years, salvage = 0
36% stated
OpInc*(1-t)
825,000
NOPAT+D&A
increase in inverntory (see below)
OCF-Reinvestment
20
Volume growth
2%
2%
Inflation
1%
1%
2002
2003
2004
Year 0
Year 1
Year 2
BAU
Volume in units per week
500,000
510,000
520,200
52
52
52
26,000,000
26,520,000
27,050,400
Price per unit
1.0235
1.0337
1.0441
0.4500
0.4545
0.4590
Cost of returns (figure) per pound
0.0770
0.0778
0.0785
Conversion costs excl returns
0.3530
0.3565
0.3601
Revenue
26,611,000
27,414,652
28,242,575
Total direct costs
22,880,000
23,570,976
24,282,819
1,862,770
1,919,026
1,976,980
500,000
500,000
500,000
1,368,230
1,424,651
1,482,775
Weeks in year
Annual volume
Indirect costs, excl depreciation

Depreciation
Operating Income
Tax rate
36%
36%
36%
NOPAT
875,667
911,776
948,976
500,000
500,000
500,000
1,375,667
1,411,776
1,448,976
30
30
30
###
###
OCF
Days in inventory
Inventory = COGS*(days/365): assumes FGI in
Reinvestment in operations (ST & LT)
FCF
Inventory = Mat'l Cost*(Days/365): assumes ra 961,643.84

Alt Reinvestment
Alt FCF
Zinser
Weeks in year
Annual volume
1,995,848
56,793
58,508
1,354,984
1,390,468
990,685
1,020,604
29,042
29,919
1,382,735
1,419,057
Volume growth
2%
2%
Inflation
1%
1%
2002
2003
2004
Year 0
Year 1
Year 2
484,500
494,190
52
52
25,194,000
25,697,880
Price per unit
1.1371
1.1485
0.4545
0.4590
0.0840
0.0848
0.3230
0.3262
Revenue
28,648,312
29,513,491
Total direct costs
21,704,631
22,360,111
2,005,382
2,065,944
825,000
825,000
4,113,299
4,262,435

Depreciation
Operating Income
Tax rate
36%
NOPAT
OCF
Days in inventory
1,880,548

FCF
Inventory = Mat'l Cost*(Days/365): assumes ra
961,644
Alt Reinvestment
36%
2,632,511
2,727,959
825,000
825,000
3,457,511
3,552,959
20
20
###
1,225,212
(691,253)
35,917
4,148,764
3,517,042
627,434.14
646,383
(334,210)
18,949
Alt FCF
3,791,721
3,534,010
BAU FCF
1,354,984
1,390,468
Proposal FCF
4,148,764
3,517,042
Incremental FCF
2,793,780
2,126,574
Io
7,242,000
TV
Year
CF to discount
(7,242,000)
2,793,780
2,126,574
Discounted value
(7,242,000)
2,539,800
1,757,499
NPV
8,129,803
8,129,803
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
2005
2006
2007
2008
2009
2010
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
530,604
541,216
552,040
563,081
574,343
585,830
52
52
52
52
52
52
27,591,408
28,143,236
28,706,101
29,280,223
29,865,827
30,463,144
1.0545
1.0651
1.0757
1.0865
1.0973
1.1083
0.4636
0.4683
0.4730
0.4777
0.4825
0.4873
0.0793
0.0801
0.0809
0.0817
0.0826
0.0834
0.3637
0.3673
0.3710
0.3747
0.3785
0.3822
29,095,500
29,974,185
30,879,405
31,811,963
32,772,684
33,762,419
25,016,161
25,771,649
26,549,952
27,351,761
28,177,784
29,028,753
2,036,685
2,098,193
2,161,558
2,226,837
2,294,088
2,363,369
500,000
500,000
1,542,655
1,604,343
36%
2,167,894
36%
###
2,233,365
36%
1,387,452
2,300,812
36%
1,429,353
###
2,370,297
36%
987,299
1,026,780
500,000
500,000
1,487,299
1,526,780
1,387,452
1,429,353
1,472,520
1,516,990
30
30
30
30
30
30
2,056,123
2,118,218
2,182,188
2,248,090
2,315,982
2,385,925
60,275
62,095
63,970
65,902
67,892
69,943
1,427,024
1,464,685
1,323,482
1,363,451
1,404,627
1,447,047
1,051,426
1,083,180
1,115,892
1,149,591
1,184,309
1,220,075
30,822
31,753
32,712
33,700
34,718
35,766
1,456,477
1,495,026
1,354,740
1,395,653
1,437,802
1,481,224
1,472,520
36%
1,516,990
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
2005
2006
2007
2008
2009
2010
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
504,074
514,155
524,438
534,927
545,626
556,538
52
52
52
52
52
52
26,211,838
26,736,074
27,270,796
27,816,212
28,372,536
28,939,987
1.1600
1.1716
1.1833
1.1951
1.2071
1.2191
0.4636
0.4683
0.4730
0.4777
0.4825
0.4873
0.0857
0.0865
0.0874
0.0883
0.0892
0.0901
0.3295
0.3328
0.3361
0.3395
0.3429
0.3463
30,404,798
31,323,023
32,268,978
33,243,501
34,247,455
35,281,728
23,035,386
23,731,055
24,447,733
25,186,054
25,946,673
26,730,263
2,128,336
2,192,612
2,258,828
2,327,045
2,397,322
2,469,721
825,000
825,000
825,000
825,000
825,000
825,000
4,416,076
4,574,356
4,737,417
4,905,402
5,078,460
5,256,745
36%
36%
36%
36%
36%
36%
2,826,289
2,927,588
3,031,947
3,139,457
3,250,214
3,364,317
825,000
825,000
825,000
825,000
825,000
825,000
3,651,289
3,752,588
3,856,947
3,964,457
4,075,214
4,189,317
20
20
20
20
20
20
1,262,213
1,300,332
1,339,602
1,380,058
1,421,736
1,464,672
37,001
38,119
39,270
40,456
41,678
42,936
3,614,287
3,714,469
3,817,677
3,924,001
4,033,537
4,146,380
665,903
686,014
706,731
728,075
750,062
772,714
19,521
20,110
20,718
21,343
21,988
22,652
3,631,768
3,732,478
3,836,229
3,943,114
4,053,227
4,166,665
1,427,024
1,464,685
1,323,482
1,363,451
1,404,627
1,447,047
3,614,287
3,714,469
3,817,677
3,924,001
4,033,537
4,146,380
2,187,263
2,249,785
2,494,195
2,560,550
2,628,909
2,699,333
2,187,263
2,249,785
2,494,195
2,560,550
2,628,909
2,699,333
1,643,323
1,536,633
1,548,699
1,445,364
1,349,046
1,259,259
2%
2%
1%
1%
2011
2012
Year 9
Year 10
597,546
600,000 max
52
52
31,072,407
31,200,000
1.1194
1.1306
0.4922
0.4971
0.0842
0.0851
0.3861
0.3899
34,782,044
35,274,119
29,905,422
30,328,505
2,434,743
2,469,188
2,441,880
###
2,476,426
36%
1,562,803
36%
1,584,913
1,562,803
1,584,913
30
30
2,457,980
2,492,754
72,055
34,774
1,490,748
1,550,139
1,256,922
1,274,704
36,846
17,782
1,525,957
1,567,130
2%
2%
1%
1%
2011
2012
Year 9
Year 10
567,669
579,022
52
52
29,518,786
30,109,162
1.2313
1.2436
0.4922
0.4971
0.0910
0.0919
0.3498
0.3533
36,347,236
37,444,923
27,537,517
28,369,150
2,544,307
2,621,145
825,000
825,000
5,440,413
5,629,629
36%
36%
3,481,864
3,602,962
825,000
825,000
4,306,864
4,427,962
20
20
1,508,905
1,554,474
44,233
45,569
4,262,631
4,382,393
796,050
820,091
23,336
24,041
4,283,529
4,403,922
1,490,748
1,550,139
4,262,631
4,382,393
2,771,883
2,832,255
64,000
10
2,771,883
2,896,255
1,175,549
1,116,632
Assumptions
Discount Rate = 10%
Strategic issue:s:
Ten-year timeline
Selling old machine in Mexico - do we still compete in that mark

Zinser becoming widely used by U.S. yarn producers
Is Aurora able to remain in operation for 10 years?
I0 (Initial Investment) at time = 0
BAU
none
TV (Terminal Value) at time = 1
BAU
none
Cash Flow Components
BAU
Volume in units
currently = 500,000 pounds/wk x 52 wks, max =600
Annual growth in volume
2%
Annual inflation (costs & revenue) 1%

Price per unit
$1.0235/pound
Revenue
volume x price
$0.45/pound
Conversion costs incl returns/unit $0.43/pound

Cost of returns (figure) per pound 0.077
Conversion costs excl returns/unit 0.353
Total direct costs
Indirect costs
7% of revenue
Depreciation
2MM straightline for 4 years = 500,000
Operating Income
Tax rate
36% stated
NOPAT
OpInc*(1-t)
500,000
OCF
NOPAT+D&A
Reinvestment in operations (ST & Lincrease in inverntory (see below)

FCF
OCF-Reinvestment
Days in inventory
30
Days in inventory = 365 / (COGS/Average Inventory)
Days*(COGS/AvgInv) = 365
COGS/AvgInv = 365/days
AvgInv/COGS = days/365
AvgInv = COGS*(days/365)
ompete in that market?
Proposal
$8.05 MM for machine
8.25MM capitalized cost
$0.115MM structural alterations

$0.055MM airflow modification
$0.030MM testing cost
LESS: $0.5MM from sale of existing machine
LESS: $0.54MM tax savings because old machine sells below BV ([$0.5MM - $2.0
PLUS: Training (expense :. after tax) = $0.05MM*(1-36%) = 32k
Proposal
$0.1MM from sale of Zinser
LESS: $0.036MM tax expense because Zinser sells above BV ([$0.1MM - $0.0MM]*
Proposal
5% lower
2%
1%
10% higher :. 1.1*$1.0235 = 1.12585/pound
volume x price
$0.45/pound
0.407/pound
0.084
reduces $0.03/pound (maintenance & power) :. 0.323
7% of revenue
straightline for 10 years, salvage = 0
36% stated
OpInc*(1-t)
825,000
NOPAT+D&A
increase in inverntory (see below)
OCF-Reinvestment
20
Volume growth
2%
2%
Inflation
1%
1%
2002
2003
2004
Year 0
Year 1
Year 2
BAU
500,000
510,000
520,200
52
52
52
26,000,000
26,520,000
27,050,400
Price per unit
1.0235
1.0337
1.0441
0.4500
0.4545
0.4590
0.0770
0.0778
0.0785
0.3530
0.3565
0.3601
Revenue
26,611,000
27,414,652
28,242,575
Total direct costs
22,880,000
23,570,976
24,282,819
1,862,770
1,919,026
1,976,980
500,000
500,000
500,000
1,368,230
1,424,651
1,482,775
Weeks in year
Annual volume

Depreciation
Operating Income
Tax rate
36%
36%
36%
NOPAT
875,667
911,776
948,976
500,000
500,000
500,000
1,375,667
1,411,776
1,448,976
30
30
30
1,880,548
1,937,340
1,995,848
56,793
58,508
1,354,984
1,390,468
990,685
1,020,604
29,042
29,919
1,382,735
1,419,057
OCF
Days in inventory
FCF
961,644
Alt Reinvestment
Alt FCF
Zinser
Weeks in year
Annual volume
Volume growth
2%
2%
Inflation
1%
1%
2002
2003
2004
Year 0
Year 1
Year 2
484,500
494,190
52
52
25,194,000
25,697,880
Price per unit
1.1371
1.1485
0.4545
0.4590
0.0840
0.0848
0.3230
0.3262
Revenue
28,648,312
29,513,491
Total direct costs
21,704,631
22,360,111
2,005,382
2,065,944
825,000
825,000
4,113,299
4,262,435

Depreciation
Operating Income
Tax rate
36%
NOPAT
OCF
Days in inventory
1,880,548
2,632,511
2,727,959
825,000
825,000
3,457,511
3,552,959
20
20
1,189,295
1,225,212
(691,253)
FCF
961,644
Alt Reinvestment
36%
35,917
4,148,764
3,517,042
627,434
646,383
(334,210)
18,949
Alt FCF
3,791,721
3,534,010
BAU FCF
1,382,735
1,419,057
Proposal FCF
3,791,721
3,534,010
Incremental FCF
2,408,986
2,114,953
Io
7,242,000
TV
Year
CF to discount
(7,242,000)
2,408,986
2,114,953
Discounted value
(7,242,000)
2,189,987
1,747,895
NPV
7,719,969
7,719,969
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
2005
2006
2007
2008
2009
2010
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
530,604
541,216
552,040
563,081
574,343
585,830
52
52
52
52
52
52
27,591,408
28,143,236
28,706,101
29,280,223
29,865,827
30,463,144
1.0545
1.0651
1.0757
1.0865
1.0973
1.1083
0.4636
0.4683
0.4730
0.4777
0.4825
0.4873
0.0793
0.0801
0.0809
0.0817
0.0826
0.0834
0.3637
0.3673
0.3710
0.3747
0.3785
0.3822
29,095,500
29,974,185
30,879,405
31,811,963
32,772,684
33,762,419
25,016,161
25,771,649
26,549,952
27,351,761
28,177,784
29,028,753
2,036,685
2,098,193
2,161,558
2,226,837
2,294,088
2,363,369
500,000
500,000
1,542,655
1,604,343
36%
2,167,894
36%
###
2,233,365
36%
1,387,452
2,300,812
36%
1,429,353
###
2,370,297
36%
987,299
1,026,780
500,000
500,000
1,487,299
1,526,780
1,387,452
1,429,353
1,472,520
1,516,990
30
30
30
30
30
30
2,056,123
2,118,218
2,182,188
2,248,090
2,315,982
2,385,925
60,275
62,095
63,970
65,902
67,892
69,943
1,427,024
1,464,685
1,323,482
1,363,451
1,404,627
1,447,047
1,051,426
1,083,180
1,115,892
1,149,591
1,184,309
1,220,075
30,822
31,753
32,712
33,700
34,718
35,766
1,456,477
1,495,026
1,354,740
1,395,653
1,437,802
1,481,224
1,472,520
36%
1,516,990
2%
2%
2%
2%
2%
2%
1%
1%
1%
1%
1%
1%
2005
2006
2007
2008
2009
2010
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
504,074
514,155
524,438
534,927
545,626
556,538
52
52
52
52
52
52
26,211,838
26,736,074
27,270,796
27,816,212
28,372,536
28,939,987
1.1600
1.1716
1.1833
1.1951
1.2071
1.2191
0.4636
0.4683
0.4730
0.4777
0.4825
0.4873
0.0857
0.0865
0.0874
0.0883
0.0892
0.0901
0.3295
0.3328
0.3361
0.3395
0.3429
0.3463
30,404,798
31,323,023
32,268,978
33,243,501
34,247,455
35,281,728
23,035,386
23,731,055
24,447,733
25,186,054
25,946,673
26,730,263
2,128,336
2,192,612
2,258,828
2,327,045
2,397,322
2,469,721
825,000
825,000
825,000
825,000
825,000
825,000
4,416,076
4,574,356
4,737,417
4,905,402
5,078,460
5,256,745
36%
36%
36%
36%
36%
36%
2,826,289
2,927,588
3,031,947
3,139,457
3,250,214
3,364,317
825,000
825,000
825,000
825,000
825,000
825,000
3,651,289
3,752,588
3,856,947
3,964,457
4,075,214
4,189,317
20
20
20
20
20
20
1,262,213
1,300,332
1,339,602
1,380,058
1,421,736
1,464,672
37,001
38,119
39,270
40,456
41,678
42,936
3,614,287
3,714,469
3,817,677
3,924,001
4,033,537
4,146,380
665,903
686,014
706,731
728,075
750,062
772,714
19,521
20,110
20,718
21,343
21,988
22,652
3,631,768
3,732,478
3,836,229
3,943,114
4,053,227
4,166,665
1,456,477
1,495,026
1,354,740
1,395,653
1,437,802
1,481,224
3,631,768
3,732,478
3,836,229
3,943,114
4,053,227
4,166,665
2,175,291
2,237,451
2,481,489
2,547,461
2,615,425
2,685,441
2,175,291
2,237,451
2,481,489
2,547,461
2,615,425
2,685,441
1,634,328
1,528,209
1,540,809
1,437,975
1,342,126
1,252,778
2%
2%
1%
1%
2011
2012
Year 9
Year 10
597,546
600,000.00 max
52
52
31,072,407
31,200,000
1.1194
1.1306
0.4922
0.4971
0.0842
0.0851
0.3861
0.3899
34,782,044
35,274,119
29,905,422
30,328,505
2,434,743
2,469,188
2,441,880
###
2,476,426
36%
1,562,803
36%
1,584,913
1,562,803
1,584,913
30
30
2,457,980
2,492,754
72,055
34,774
1,490,748
1,550,139
1,256,922
1,274,704
36,846
17,782
1,525,957
1,567,130
2%
2%
1%
1%
2011
2012
Year 9
Year 10
567,669
579,022
52
52
29,518,786
30,109,162
1.2313
1.2436
0.4922
0.4971
0.0910
0.0919
0.3498
0.3533
36,347,236
37,444,923
27,537,517
28,369,150
2,544,307
2,621,145
825,000
825,000
5,440,413
5,629,629
36%
36%
3,481,864
3,602,962
825,000
825,000
4,306,864
4,427,962
20
20
1,508,905
1,554,474
44,233
45,569
4,262,631
4,382,393
796,050
820,091
23,336
24,041
4,283,529
4,403,922
1,525,957
1,567,130
4,283,529
4,403,922
2,757,572
2,836,791
64,000
10
2,757,572
2,900,791
1,169,480
1,118,381

Case 21 Aurora Textile Company - My Version

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Case 21 Aurora Textile Company - My Version

Caricato da

Copyright:

Formati disponibili

Aurora.

This spreadsheet supports STUDENT analysis of the

Copyright (C) 2007, by the University of Virginia Darden School Foundation.

Consolidated Statement of Operations for the Fiscal Years

Pounds shipped (000's)

Other Income (Expense)

* Costs associated with the shut down of plants

$229,787 $182,955 $147,503

Consolidated Balance Sheets for the Fiscal Years

Property and Equipment

Plant Production Capability

Count Range Capacity

Cost of Customer Returns

Price of Yarn Sold

Price of Yarn Sold

Interest Rate Yields: January 2003

Selling old machine in Mexico - do we still compete in that mark

I0 (Initial Investment) at time = 0

TV (Terminal Value) at time = 1

Cash Flow Components

currently = 500,000 pounds/wk x 52 wks, max =600

Annual growth in volume

Annual inflation (costs & revenue) 1%

Conversion costs incl returns/unit $0.43/pound

2MM straightline for 4 years = 500,000

Revenue - Dir Costs - Ind Costs - Depreciation

add back Depreciation

Reinvestment in operations (ST & Lincrease in inverntory (see below)

ompete in that market?

8.25MM capitalized cost

$0.115MM structural alterations

Price per unit

Cost of returns (figure) per pound

Conversion costs excl returns

Total direct costs

Indirect costs, excl depreciation

add back Depreciation

Inventory = Mat'l Cost*(Days/365): assumes ra 961,643.84

Price per unit

Cost of returns (figure) per pound

Conversion costs excl returns

Total direct costs

Indirect costs, excl depreciation

Reinvestment in operations (ST & LT)

Selling old machine in Mexico - do we still compete in that mark

I0 (Initial Investment) at time = 0

TV (Terminal Value) at time = 1

Cash Flow Components

currently = 500,000 pounds/wk x 52 wks, max =600

Annual growth in volume

Annual inflation (costs & revenue) 1%

Conversion costs incl returns/unit $0.43/pound

2MM straightline for 4 years = 500,000

Revenue - Dir Costs - Ind Costs - Depreciation

add back Depreciation

Reinvestment in operations (ST & Lincrease in inverntory (see below)

ompete in that market?

8.25MM capitalized cost

$0.115MM structural alterations

Price per unit

Cost of returns (figure) per pound

Conversion costs excl returns

Total direct costs

Indirect costs, excl depreciation