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    Hoshimo Ltd/Year 1 2 3 4 5 Income Statement

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    Seema
    - An analyst created a 5-year forecast model for Hoshimo Ltd to estimate future dividends and current stock price. - The model assumes annual sales growth, EBIT as a % of sales, interest as a % of debt, taxes at 40%, and increasing dividend payouts each year. - Retained earnings are added to equity each year. Total assets equal 80% of sales, and debt is calculated as assets minus equity. - The forecast is used to calculate dividend per share each year and discount those values to estimate the current stock price.

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    Hoshimo Ltd/Year 1 2 3 4 5 Income Statement

    Uploaded by

    Seema
    111 views6 pages
    - An analyst created a 5-year forecast model for Hoshimo Ltd to estimate future dividends and current stock price. - The model assumes annual sales growth, EBIT as a % of sales, interest as a % of debt, taxes at 40%, and increasing dividend payouts each year. - Retained earnings are added to equity each year. Total assets equal 80% of sales, and debt is calculated as assets minus equity. - The forecast is used to calculate dividend per share each year and discount those values to estimate the current stock price.

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    Session 7 Spreadhseet

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    - An analyst created a 5-year forecast model for Hoshimo Ltd to estimate future dividends and current stock price. - The model assumes annual sales growth, EBIT as a % of sales, interest as a % of debt, taxes at 40%, and increasing dividend payouts each year. - Retained earnings are added to equity each year. Total assets equal 80% of sales, and debt is calculated as assets minus equity. - The forecast is used to calculate dividend per share each year and discount those values to estimate the current stock price.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    111 views6 pages

    Hoshimo Ltd/Year 1 2 3 4 5 Income Statement

    Uploaded by

    Seema
    - An analyst created a 5-year forecast model for Hoshimo Ltd to estimate future dividends and current stock price. - The model assumes annual sales growth, EBIT as a % of sales, interest as a % of debt, taxes at 40%, and increasing dividend payouts each year. - Retained earnings are added to equity each year. Total assets equal 80% of sales, and debt is calculated as assets minus equity. - The forecast is used to calculate dividend per share each year and discount those values to estimate the current stock price.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Hoshimo Ltd/Year ==> 1 2 3 4 5

    Income Statement
    Sales 100.00 120.00 138.00 151.80 166.98
    EBIT 20.00 24.00 24.84 24.29 26.72
    Interest 4.00 4.83 5.35 5.64 6.18
    EBT 16.00 19.17 19.49 18.65 20.54
    Tax 6.40 7.67 7.80 7.46 8.21
    Net Income 9.60 11.50 11.69 11.19 12.32
    Dividends 1.92 2.30 3.51 4.48 6.16
    Retained Earnings 7.68 9.20 8.18 6.71 6.16

    Balance Sheet
    Total Assets 80.00 96.00 110.40 121.44 133.58
    Total Debt 40.00 48.32 53.52 56.37 61.80
    Equity 40.00 47.68 56.88 65.07 71.78
    Required Return 15% Share Outstanding 4
    Year 1 2 3 4 5
    Dividends 1.92 2.30 3.51 4.48 6.16
    PV of Dividends 1.67 1.74 2.31 2.56 3.06
    DPS 0.42 0.43 0.58 0.64 0.77
    Total Value of DPS PV 2.83
    Value of Stock at the end of 5 Years 30.80
    Pvof Value of Stock 15.32
    Value of Stock at time 0 18.15
    •An analyst is preparing a forecast of dividends for Hoshino Distributors for the next five years. He uses a spreadshe
    •Sales are $100 million year 1, they grow by 20% in year 2, 15% in year 3, and 10% in year 4 and 5.
    •Operating profits (EBIT) are 20% of sales in years 1 and 2, 18% in year 3, and 16% in year 4 and 5.
    •Interest expense are 10% of the total debt for the current year.
    •The income tax is 40%.
    •Hoshino pays out 20% of earnings in dividends in years 1 and 2, 30% in year 3, 40% in year 4, and 50% in year 5.
    •Retained earnings are added to the equity in the next year.
    •Total assets are 80% of the current year’s sales in all years.
    •In year 1, debt is $40 million, and shareholder’s equity is $ 40 million.
    •Debt = Total Assets – Shareholder’s Equity
    •Hoshino has 4 million shares outstanding.
    •The required return on equity is 15%.
    •The value of company at the end of Year is expected to be 10.0 times earnings.
    •Estimate the current Value per share of Hoshino.
    five years. He uses a spreadsheet model with the following assumptions –
    year 4 and 5.
    year 4 and 5.

    n year 4, and 50% in year 5.


    Hoshimo Ltd/Year ==> 1 2 3 4 5
    Income Statement •An analyst is preparing a forecast
    Sales 100 120 138 151.8 166.98 •Sales are $100 million year 1, they
    EBIT 20 24 24.84 24.288 26.7168 •Operating profits (EBIT) are 20% o
    Interest 4 9.6 11.04 12.144 13.3584 •Interest expense are 10% of the to
    EBT 16 14.4 13.8 12.144 13.3584 •The income tax is 40%.
    Tax 6.4 5.76 5.52 4.8576 5.34336 •Hoshino pays out 20% of earnings
    Net Income •Retained earnings are added to th
    Dividend 0 0 0 0 0 •Total assets are 80% of the curren
    Retained earnings •In year 1, debt is $40 million, and
    •Debt = Total Assets – Shareholder
    Balance Sheet •Hoshino has 4 million shares outst
    Total Assets 80 96 110.4 121.44 133.584 •The required return on equity is 1
    Total Debt 40 96 110.4 121.44 133.584 •The value of company at the end o
    Equity •Estimate the current Value per sha
    Required Return 15% Share Outsta 4
    Year 1 2 3 4 5
    st is preparing a forecast of dividends for Hoshino Distributors for the next five years. He uses a spreadsheet model with the following ass
    e $100 million year 1, they grow by 20% in year 2, 15% in year 3, and 10% in year 4 and 5.
    ng profits (EBIT) are 20% of sales in years 1 and 2, 18% in year 3, and 16% in year 4 and 5.
    expense are 10% of the total debt for the current year.
    me tax is 40%.
    pays out 20% of earnings in dividends in years 1 and 2, 30% in year 3, 40% in year 4, and 50% in year 5.
    d earnings are added to the equity in the next year.
    ets are 80% of the current year’s sales in all years.
    , debt is $40 million, and shareholder’s equity is $ 40 million.
    otal Assets – Shareholder’s Equity
    has 4 million shares outstanding.
    uired return on equity is 15%.
    e of company at the end of Year is expected to be 10.0 times earnings.
    the current Value per share of Hoshino.
    model with the following assumptions –

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