Submitted by

Name Roll No.

Abhinandan Singh MP15003
Shakil Hassain MP15040
Subrata Basak MP15043
Suman Mandal MP15046

Summary:
1) We have calculated the Profit & Loss Component Projections from year 2013 to 2018
2) To Calculate Sales Forecast ----Growth Rate has been taken from Exhibit 8 (Panel A) and Furniture market Growth has been a
3) To Calculate COGS,SGA, Advertising Expenses ----Growth Rate has been taken from Exhibit 8 (Panel B,C,D) respectively
4) To Calculate Capital Expenditure ----Construction Cost and Refresh Cost has been taken from Exhibit 9 (Panel E)
5) For Working Capital Calculation - The Various Components such as Account receivables, Inventory, Account Payable and Accr
6) Equity Value of Firm has been calculated using FCFF using a WACC of 12.5% (Given in Case)
7) Enterprise Value of Firm came out to be 181,305,766
 re market Growth has been added to it using Exhibit2)
anel B,C,D) respectively
hibit 9 (Panel E)
ory, Account Payable and Accrued Expenses average value from Exhibit 10 has been taken
 Forecasted Sales Cohor

Show Rooms
Opened each Square Feet
year Opened Year 2004 2005 2006 2007 2008
1 17200 2003 2057 3754 5224 6148 6341
3 17600 2004 6661 11907 15158 16488
4 18500 2005 9570 16651 19785
5 21100 2006 13583 21142
6 22100 2007 15435
2 15500 2008
1 14500 2009
2 14700 2010
2 15400 2011
3 16300 2012
2 16000 2013
2 16000 2014
2 15000 2015
Net Sales year wise

Forecasted COGS Cohort Wise from 2013 to 2018 (Value in 000's)

Year 2012 2013 2014 2015 2016

2003 2416 2475 2551 2625 2696
2004 7176 7328 7555 7774 7984
2005 9042 10047 10359 10659 10947
2006 13932 14281 14724 15151 15560
2007 17856 17856 18410 18944 19455
2008 3764 3840 3959 4074 4184
2009 1887 1584 1652 1700 1746
2010 3526 3750 2980 3102 3186
2011 2357 2912 3229 2562 2662
2012 0 3814 5928 7118 6300
2013 0 0 2568 3987 4781
2014 0 0 0 2645 4102
2015 0 0 0 0 2720
Net COGS year wise 61956 67887 73916 80342 86324
 Forecasted SGA Cohort Wise from 2013 to 2018 (Value in 000's)

Year 2012 2013 2014 2015 2016

2003 791 848 874 899 924
2004 2318.7 2510 2588 2663 2735
2005 3693 3442 3549 3651 3750
2006 4946 4892 5044 5190 5330
2007 5917 6117 6307 6490 6665
2008 1243 1316 1356 1396 1433
2009 615 543 2588 2663 2735
2010 1028 1154 3549 3651 3750
2011 701 837 6416 5190 5330
2012 0 1038 8486 8255 6665
2013 0 0 1925 1878 1823
2014 0 0 0 826 805
2015 0 0 0 0 1549
Net SGA year wise 21252.7 22697 42682 42754 43495

Forecasted Advertising Expenses Cohort Wise from 2013 to 2018 (Value in 000's)

Year 2012 2013 2014 2015 2016

2003 457 449 463 476 489
2004 1287 1329 1370 1410 1448
2005 1793 1822 1879 1933 1985
2006 2287 2590 2670 2748 2822
2007 3109 3238 3339 3436 3528
2008 675 696 718 1396 1433
2009 303 287 300 582 598
2010 473 547 540 563 578
2011 358 407 471 465 483
2012 0 570 828 1039 1143
2013 0 0 384 557 698
2014 0 0 0 396 573
2015 0 0 0 0 407
Net Advertising expenses year wise 10742 11936 12962 14999 16185

Lease Expenses Cohort Wise from 2013 to 2018 (Value in 000's)

Show Rooms
Opened each Square Feet
year Opened Year 2012 2013 2014 2015 2016
1 17200 2003 302 302 302 302 381
3 17600 2004 1003 1003 1003 1003 1003
 4 18500 2005 1510 1510 1510 1510 1510
5 21100 2006 1910 2203 2203 2203 2203
6 22100 2007 2530 2530 2824 2824 2824
2 15500 2008 610 610 610 673 673
1 14500 2009 280 280 280 280 321
2 14700 2010 565 565 565 565 565
2 15400 2011 610 610 610 610 610
3 16300 2012 1000 1000 1000 1000 1000
2 16000 2013 0 668 668 668 668
2 16000 2014 0 0 682 682 682
2 15000 2015 0 0 0 652 652
Net Lease expenses year wise 10320 11281 12257 12972 13092
 Forecasted Sales Cohort Wise from 2013 to 2018 (Value in 000's)

2009 2010 2011 2012 2013 2014 2015 2016

5503 5636 5871 6034 6233 6426 6613 6791
15446 16187 17279 17869 18459 19031 19583 20112
20951 22847 24451 24499 25307 26092 26849 27574
23592 29702 34105 34824 35973 37088 38164 39194
22001 30466 39628 43541 44978 46372 47717 49005
3187 5176 7244 9257 9674 9973 10263 10540
1437 2507 3540 3990 4161 4282 4397
3007 5300 6673 7507 7815 8026
3354 4572 5746 6453 6705
5379 9306 12665 15869
3622 6260 8507
3731 6440
3837
148218 161237 175326 190393 206996

000's)
COGS as % of
2017 2018 Year Sales
2764 2827 1 71%
8184 8372 2 64%
11220 11478 3 56%
15949 16316 4 40%
19941 20400
4289 4388
11354 11615
3266 3341
2728 2791
7050 7297
4225 4719
4911 4333
2626 5037
98507 102914
00's)
SGA as % of
2017 2018 Year Sales
947 968 1 19.3%
2804 2868 2 18.3%
3844 3932 3 17.3%
5464 5589 4 13.6%
6831 6988
1469 1503
2804 2868
3844 3932
5464 5589
6831 6988
1469 1503
780 627
1505 1456
44055 44814

alue in 000's)
SGA as % of
2017 2018 Year Sales
501 513 1 10.6%
1484 1518 2 8.9%
2035 2082 3 8.2%
2893 2959 4 7.2%
3617 3700
1469 796
613 332
592 606
495 506
1279 1323
766 856
717 786
589 735
17049 16712

00's)

Lease per Lease Rate

2017 2018 Year square feet Growth
381 381 2012 20.45
1193 1193 2013 20.88 2%
 1510 1706 2014 21.30
2203 2203 2015 21.72
2824 2824 2016 22.15
673 673 2017 22.60
321 321 2018 23.05
664 664
610 710
1000 1127
668 668
682 682
652 652
13382 13804
 Growth of
Sales per Furniture
2017 2018 Year Sqare feet Year Industry
6961 7121 2012 110 2013 3.0%
20614 21088 2013 113.2 2014 2.8%
28263 28913 2014 116.6 2015 2.6%
40174 41098 2015 119.9 2016 2.4%
50230 51386 2017 2.2%
10803 11052 2018 2.0%
4507 4611
8226 8415 Average Sales Growth Rate
6872 7031 Year Wise Value
17758 18379 1 70.20%
10642 11887 2 33.50%
8739 10915 3 22.90%
6615 8963 4 9.70%
220406 230859 5 1.50%
6 0.30%
 Capex Expenditure Calculation Refresh Cost = 0.7
Square foot Construction Construction Refresh Cost (in Total Capex (in
Year No of stores cost per sq
opened Cost (in 000's) 000's) 000's)
feet
2003 1 17200 20.8 358 358
2004 3 17600 22.3 1175 1175
2005 4 18500 24.5 1814 1814
2006 5 21100 28.2 2971 2971
2007 6 22100 30.6 4058 4058
2008 2 15500 29.8 924 924
2009 1 14500 27.2 394 394
2010 2 14700 25.6 752 752
2011 2 15400 25.9 798 251 1049
2012 3 16300 26.4 1293 823 2116
2013 2 16000 26.9 860 1270 2130
2014 2 16000 27.4 876 2080 2956
2015 2 15000 27.9 837 2841 3678
2016 0 0 0 647 647
2017 0 0 0 276 276
2018 0 0 0 526 526
Depreciation
(in 000's)

72
307
669
1264
2075
2188
2032
1820
1435
1047
1288
1800
2386
2305
1937
1616
Income Statement
(Value in 000's) 2013 2014 2015 2016 2017 2018
Sales 161236.7 175325.6 190393 206996.4 220405.6 230859.4
COGS 67887.36 73915.96 80342.17 86323.87 98507.07 102914.1
SGA 22696.54 42681.7 42754 43494.72 44055.03 44813.53
Depreciation 1288.05 1800.374 2385.516 2305.156 1937.216 1616.466
Lease Cost 11281 12256.98 12971.9 13092.19 13381.71 13804.41
Advertising Expenses 11936.37 12962.26 14999.07 16184.72 17048.92 16711.51
Corporate Expenses 8061.833 8766.279 9519.65 10349.82 11020.28 11542.97
EBIT 38085.51 22942.03 27420.71 35245.93 34455.34 39456.4
Taxes@40% 15234.2 9176.811 10968.28 14098.37 13782.14 15782.56
Net Income 22851.31 13765.22 16452.43 21147.56 20673.2 23673.84
Total Expenses 53975.74 76667.22 80244.61 83121.45 85505.94 86872.42
Capital Expenses 2130.15 2955.622 3677.708 646.8 275.8 526.4

Cash Flow
Statement(Value in
000's) 2013 2014 2015 2016 2017 2018
Net Income 22851.31 13765.22 16452.43 21147.56 20673.2 23673.84
Capital expenditure(-) 2130.15 2955.622 3677.708 646.8 275.8 526.4
Depreciation(+) 1288.05 1800.374 2385.516 2305.156 1937.216 1616.466
Increase in Net Working
Capital(-) 2401.584 5362.573 6721.534 7113.689 8043.452 4700.873
FCFF 19607.62 7247.396 8438.701 15692.23 14291.17 20063.03
Terminal Value 244296.9
NPV 17506.81 5777.58 6006.501 9972.695 8109.192 133933
Equity Value 181305.8
 Balance Sheet Components for Year 2013-2018 (Value in 000's)

Balance Sheet 2012 2013 2014 2015 2016

Capital Expenditure 2115.5 2130.15 2955.622 3677.708 646.8
Account Receivable 48200 52240.68 56805.49 61687.33 67066.84
Inventory 33343 32314.38 35184 38242.87 41090.16
Accounts Payable 11364 11065.64 12048.3 13095.77 14070.79
Accrued expenses 1682 2590.836 3680.027 3851.741 3989.83

Working Capital 68497 70898.58 76261.16 82982.69 90096.38

Increase in Net Working Capital 2401.584 5362.573 6721.534 7113.689

Perpetual Growth 3.50%

Discount Rate 12%
Year 2013-2018 (Value in 000's)

2017 2018 Percent

275.8 526.4
71411.4 74798.45 32.4% of Sales
46889.37 48987.13 47.6% of COGS
16056.65 16775.01 16.3% of COGS
4104.285 4169.876 4.8% of Total Expenses

98139.83 102840.7
8043.452 4700.873