Gainesboro Case Analysis
Essay by dubym • February 2, 2016 • Case Study • 3,664 Words (15 Pages) • 875 Views
Exhibit 1
40% dividend and 15% annual sales increase
GAINESBORO MACHINE TOOLS CORP. | ||||||||
Projections | Total | |||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2005-11 | |
Sales | $ 870.1 | $ 1,000.7 | $ 1,150.8 | $ 1,323.4 | $ 1,521.9 | $ 1,750.1 | $ 2,012.7 | $ 9,629.6 |
Sources: | ||||||||
Net income | $ 18.1 | $ 40.0 | $ 57.5 | $ 72.8 | $ 91.3 | $ 98.0 | $ 160.0 | $ 537.8 |
Depreciation | $ 22.5 | $ 25.5 | $ 30.0 | $ 34.5 | $ 40.5 | $ 46.5 | $ 52.5 | $ 252.0 |
Total | $ 40.6 | $ 65.5 | $ 87.5 | $ 107.3 | $ 131.8 | $ 144.5 | $ 212.5 | $ 789.8 |
Uses: | ||||||||
Capital expenditures | $ 43.8 | $ 50.4 | $ 57.5 | $ 66.2 | $ 68.5 | $ 78.8 | $ 90.6 | $ 455.7 |
Change in Working capital | $ 19.5 | $ 22.4 | $ 25.8 | $ 29.6 | $ 34.0 | $ 38.5 | $ 44.3 | $ 214.1 |
Total | $ 63.3 | $ 72.8 | $ 83.3 | $ 95.8 | $ 102.4 | $ 117.3 | $ 134.9 | $ 669.8 |
Excess cash/(Borrowing needs) | $ (22.7) | $ (7.3) | $ 4.2 | $ 11.5 | $ 29.4 | $ 27.2 | $ 77.6 | $ 120.0 |
Dividend | $ 7.2 | $ 16.0 | $ 23.0 | $ 29.1 | $ 36.5 | $ 39.2 | $ 64.0 | $ 215.1 |
After dividend | ||||||||
Excess cash/(Borrowing needs) | $ (29.9) | $ (23.3) | $ (18.8) | $ (17.6) | $ (7.2) | $ (12.0) | $ 13.6 | $ (95.1) |
Exhibit 2
20% dividend and 15% annual sales increase
GAINESBORO MACHINE TOOLS CORP. | ||||||||
Projections | Total | |||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2005-11 | |
Sales | $ 870.1 | $ 1,000.7 | $ 1,150.8 | $ 1,323.4 | $ 1,521.9 | $ 1,750.1 | $ 2,012.7 | $ 9,629.6 |
Sources: | ||||||||
Net income | $ 18.1 | $ 40.0 | $ 57.5 | $ 72.8 | $ 91.3 | $ 98.0 | $ 160.0 | $ 537.8 |
Depreciation | $ 22.5 | $ 25.5 | $ 30.0 | $ 34.5 | $ 40.5 | $ 46.5 | $ 52.5 | $ 252.0 |
Total | $ 40.6 | $ 65.5 | $ 87.5 | $ 107.3 | $ 131.8 | $ 144.5 | $ 212.5 | $ 789.8 |
Uses: | ||||||||
Capital expenditures | $ 43.8 | $ 50.4 | $ 57.5 | $ 66.2 | $ 68.5 | $ 78.8 | $ 90.6 | $ 455.7 |
Change in Working capital | $ 19.5 | $ 22.4 | $ 25.8 | $ 29.6 | $ 34.0 | $ 38.5 | $ 44.3 | $ 214.1 |
Total | $ 63.3 | $ 72.8 | $ 83.3 | $ 95.8 | $ 102.4 | $ 117.3 | $ 134.9 | $ 669.8 |
Excess cash/(Borrowing needs) | $ (22.7) | $ (7.3) | $ 4.2 | $ 11.5 | $ 29.4 | $ 27.2 | $ 77.6 | $ 120.0 |
Dividend | $ 3.6 | $ 8.0 | $ 11.5 | $ 14.6 | $ 18.3 | $ 19.6 | $ 32.0 | $ 107.6 |
After dividend | ||||||||
Excess cash/(Borrowing needs) | $ (26.3) | $ (15.3) | $ (7.3) | $ (3.0) | $ 11.1 | $ 7.6 | $ 45.6 | $ 12.5 |
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