2 page report - finance
vk4queen
MACYS449.xlsxMACY'S Financials
| Assumptions | 0 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Beyond |
| Sales growth | 1% | 1% | -4% | -4% | -4% | 0% | 1% | 2% | 2.5% | 2.5% | 2.5% | ||
| Terminal Growth Rate | 2.5% | ||||||||||||
| Interest Expense - Based on Debt * Cost of Debt % | 3.38% | 3.38% | 3.38% | 3.38% | 3.38% | ||||||||
| All Others Grow at the same rate as Sales | |||||||||||||
| Highlighted yellow cells are numbers that stood out | |||||||||||||
| P/E Multiples Valuation | |||||||||||||
| Benchmark P/E | 26.44 | ||||||||||||
| Earnings available to common shareholders | 1,738,000 | ||||||||||||
| Equity intrinsic value | 45944030.00 | ||||||||||||
| Shares | 309605426 | remember to adjust for millions! | |||||||||||
| Implied price per share | 0.15 | ||||||||||||
| P/S Multiples Valuation | |||||||||||||
| Benchmark P/S | 0.83 | ||||||||||||
| Sales Revenue | $ 24,971,000 | ||||||||||||
| Equity intrinsic value | 20,788,357.50 | ||||||||||||
| Shares | 309605426 | ||||||||||||
| Implied price per share | 0.07 | ||||||||||||
| EV/EBITDA Multiples Valuation | |||||||||||||
| Benchmark EV/EBITDA | 14.24 | ||||||||||||
| EBITDA | 2,700,000 | ||||||||||||
| Enterprise value | 38,444,625.00 | ||||||||||||
| Market value of non-operating assets | 1,162 | ||||||||||||
| Market value of debt | 6851716.33039058 | ||||||||||||
| Equity intrinsic value | 31,594,070.67 | ||||||||||||
| Shares | 309605426 | ||||||||||||
| Implied price per share | 0.10 | ||||||||||||
| Equity Cash Flow Model: Discounting Equity Cash Flows at Cost of Equity | |||||||||||||
| Ke (Cost of Equity) | 9.12% | ||||||||||||
| 1 | 2 | 3 | 4 | 5 | |||||||||
| Equity cash flow (FCFE) | 1,584 | 1,570 | 1,539 | 1,539 | 1,540 | ||||||||
| Terminal value | 23846 | ||||||||||||
| PV | 1452 | 1319 | 1185 | 1086 | 995 | 15415 | |||||||
| Equity value of operations | 21450678 | ||||||||||||
| Market value of non-operating assets | 1,162 | ||||||||||||
| Equity intrinsic value | 21,451,840 | ||||||||||||
| Shares | 309605 | ||||||||||||
| Implied price per share | 69.29 | ||||||||||||
| Corporate Valuation Model: Discounting Free Cash Flows at WACC | |||||||||||||
| WACC (Weighted Average Cost of Capital) | 6.76% | ||||||||||||
| 1 | 2 | 3 | 4 | 5 | |||||||||
| Free cash flow (FCFF) | 1,325 | 1,287 | 1,208 | 1,206 | 1,204 | ||||||||
| Terminal value | 28928 | ||||||||||||
| PV | 1241 | 1129 | 992 | 928 | 868 | 20854 | |||||||
| Value of operations | 26012279 | ||||||||||||
| Market value of debt | 6851716.3 | ||||||||||||
| Market value of non-operating assets | 1,162 | ||||||||||||
| Equity intrinsic value | 19161725 | ||||||||||||
| Shares | 309605 | ||||||||||||
| Implied price per share | 61.89 | ||||||||||||
| Adjusted Present Value Model: Discounting Unlevered Cash Flows at Unlevered Cost of Capital | |||||||||||||
| Ku (Unlevered Cost of Capital) | 6.88% | ||||||||||||
| 1 | 2 | 3 | 4 | 5 | |||||||||
| FCFF | 1,325 | 1,287 | 1,208 | 1,206 | 1,204 | ||||||||
| Terminal value | 28174 | ||||||||||||
| PV | 1240 | 1127 | 989 | 924 | 863 | 20202 | |||||||
| Unlevered value of operations | 25344648 | ||||||||||||
| 1 | 2 | 3 | 4 | 5 | |||||||||
| Interest tax savings = IntExp * tax Rate | - 47.99 | - 47.62 | - 47.25 | - 46.89 | - 46.52 | ||||||||
| Terminal value | - 1,089.01 | ||||||||||||
| PV | - 44.90 | - 41.69 | - 38.71 | - 35.93 | - 33.36 | - 780.86 | |||||||
| Value of tax shield | - 975,444 | ||||||||||||
| Market value of debt | 6851716.33039058 | ||||||||||||
| Market value of non-operating assets | 1,162 | ||||||||||||
| Equity intrinsic value | 31,219,758.30 | ||||||||||||
| Shares | 309605 | ||||||||||||
| Implied price per share | 100.84 | ||||||||||||
| Cash Flow Computations | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||
| Year Ended… | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||
| Shares Outstanding | |||||||||||||
| Figures in… | Millions | Millions | Millions | Millions | Millions | Millions | Millions | Millions | Millions | Millions | Millions | ||
| OpInc | 2,678 | 2,800 | 2,039 | 1,371 | 1,864 | 1,738 | 1,739 | 1,740 | 1,741 | 1,742 | 1,743 | ||
| Tax Rate (t) | 30% | 31% | 30% | 25% | -2% | 19% | 18% | 18% | 18% | 18% | 18% | ||
| NOPAT = OpInc x (1-t) | 1874 | 1936 | 1431 | 1025 | 1903 | 1416 | 1418.02 | 1420.05 | 1422.1 | 1424.15 | 1426.2 | ||
| Dep & Amort Exp | 1,012 | 1,031 | 1,047 | 1,044 | 946 | 947 | 1,008 | 1,006 | 998 | 990 | 993 | ||
| OCF = NOPAT + Dep & Amort | 2,886 | 2,967 | 2,478 | 2,069 | 2,849 | 2,363 | 2,426 | 2,426 | 2,420 | 2,414 | 2,419 | ||
| ΔNOWC | 63 | -283 | 53 | -341 | -13 | -68 | 13 | 19 | 32 | 33 | 34 | ||
| ΔGFA | 754 | 906 | 877 | 459 | 646 | 927 | 1,088 | 1,119 | 1,180 | 1,175 | 1,181 | ||
| FCFF = OCF - ΔNOWC - ΔGFA | 2,069 | 2,344 | 1,548 | 1,951 | 2,216 | 1,504 | 1,325 | 1,287 | 1,208 | 1,206 | 1,204 | ||
| Interest Expense, net | (390) | (395) | (363) | (367) | (321) | (261) | (260) | (259) | (258) | (257) | (256) | ||
| FCFF | 2,069 | 2,344 | 1,548 | 1,951 | 2,216 | 1,504 | 1,325 | 1,287 | 1,208 | 1,206 | 1,204 | ||
| ΔDebt | -92 | 519 | -238 | -433 | -701 | -1,153 | 47 | 71 | 121 | 124 | 127 | ||
| Int(1-t) | -273 | -273 | -255 | -274 | -328 | -213 | -212 | -211 | -211 | -210 | -209 | ||
| PfdCF | |||||||||||||
| FCFE = FCFF + ΔDebt - Int(1-t) - PfdCF | 2,250 | 3,136 | 1,565 | 1,792 | 1,843 | 564 | 1,584 | 1,570 | 1,539 | 1,539 | 1,540 | ||
| FCFF | 2,069 | 2,344 | 1,548 | 1,951 | 2,216 | 1,504 | 1,325 | 1,287 | 1,208 | 1,206 | 1,204 | ||
| Int(t) | -117 | -122 | -108 | -93 | 7 | -48 | -48 | -48 | -47 | -47 | -47 | ||
| UCF = FCFF + Int(t) | 1,952 | 2,222 | 1,440 | 1,858 | 2,223 | 1,456 | 1,277 | 1,240 | 1,160 | 1,159 | 1,157 | ||
| Consolidated Statements of Income - USD ($) $ in Thousands | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| Income Statement [Abstract] | |||||||||||||
| Net sales | $27,686 | $ 27,931 | $ 28,105 | $ 27,079 | $ 25,908 | $ 24,939 | $ 24,971 | 24972 | 24973 | 24974 | 24975 | 24976 | |
| Credit Card Revenues, Net | 656 | 702 | 768 | 769 | 770 | 771 | 772 | 773 | |||||
| Cost of sales | -16,538 | (16,725) | (16,863) | (16,496) | (15,666) | (15,181) | (15,215) | -15214 | -15213 | -15212 | -15211 | -15210 | |
| Gross margin | 11,148 | 11,206 | 11,242 | 10,583 | 1 | 2 | 3 | 4 | 5 | ||||
| Selling, general and administrative expenses | -8,482 | (8,440) | (8,355) | (8,468) | (9,257) | (8,954) | (9,039) | -9038 | -9037 | -9036 | -9035 | -9034 | |
| Gains on sale of real estate | 212 | 209 | 544 | 389 | 390 | 391 | 392 | 393 | 394 | ||||
| Restructuring, impairment, store closing and other costs | -5 | (88) | (87) | (288) | (479) | (186) | (136) | -135 | -134 | -133 | -132 | -131 | |
| Settlement charges | 0 | 0 | 1 | 2 | 3 | 4 | 5 | ||||||
| Operating income (loss) | 2,661 | 2,678 | 2,800 | 2,039 | 1,371 | 1,864 | 1,738 | 1739 | 1740 | 1741 | 1742 | 1743 | |
| Benefit plan income, net | 55 | 57 | 39 | 40 | 41 | 42 | 43 | 44 | |||||
| Settlement charges | (98) | (105) | (88) | -87 | -86 | -85 | -84 | -83 | |||||
| Interest expense | -425 | (390) | (395) | (363) | (367) | (321) | (261) | -260 | -259 | -258 | -257 | -256 | |
| Gains (losses) on early retirement of debt | -137 | 0 | (17) | 0 | 0 | 10 | (33) | -32 | -31 | -30 | -29 | -28 | |
| Interest income | 3 | 2 | 2 | 2 | 4 | 11 | 25 | 26 | 27 | 28 | 29 | 30 | |
| Income (loss) before income taxes | 2,102 | 2,290 | 2,390 | 1,678 | 965 | 1,516 | 1,420 | 1421 | 1422 | 1423 | 1424 | 1425 | |
| Federal, state and local income tax benefit (expense) | -767 | (804) | (864) | (608) | (346) | 39 | (322) | -321 | -320 | -319 | -318 | -317 | |
| Net income (loss) | $1,335 | 1,486 | 1,526 | 1,070 | 619 | 1,555 | 1,098 | 1099 | 1100 | 1101 | 1102 | 1103 | |
| Net loss attributable to noncontrolling interest | 0 | 0 | 2 | 8 | 11 | 10 | |||||||
| Net income attributable to Macy's, Inc. shareholders | $ 1,486 | $ 1,526 | $ 1,072 | $ 627 | $ 1,566 | $ 1,108 | |||||||
| Basic earnings per share attributable to Macy's, Inc. shareholders | $3.29 | $ 3.93 | $ 4.30 | $ 3.26 | $ 2.03 | $ 5.13 | $ 3.60 | ||||||
| Diluted earnings per share attributable to Macy's, Inc. shareholders | $3.24 | $ 3.86 | $ 4.22 | $ 3.22 | $ 2.02 | $ 5.10 | $ 3.56 | ||||||
| Consolidated Balance Sheets - USD ($) $ in Thousands | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| Current Assets: | |||||||||||||
| Cash and cash equivalents | $1,836 | $2,273 | $ 2,246 | $ 1,109 | $ 1,297 | $ 1,455 | $ 1,162 | 1174 | 1191 | 1221 | 1252 | 1283 | |
| Receivables | 371 | 438 | 424 | 558 | 522 | 363 | 400 | 404 | 410 | 420 | 431 | 442 | |
| Merchandise Inventories | 5,308 | 5,557 | 5,417 | 5,506 | 5,399 | 5,178 | 5,263 | 5316 | 5395 | 5530 | 5669 | 5810 | |
| Prepaid expenses and other current assets | 361 | 420 | 493 | 479 | 408 | 650 | 620 | 626 | 636 | 651 | 668 | 684 | |
| Total Current Assets | 7,876 | 8,688 | 8,580 | 7,652 | 7,626 | 7,646 | 7,445 | 7519 | 7632 | 7823 | 8019 | 8219 | |
| Property and Equipment - net | 8,196 | 7,930 | 7,800 | 7,616 | 7,017 | 6,672 | 6,637 | 6703 | 6804 | 6974 | 7148 | 7327 | |
| Goodwill | 3,743 | 3,743 | 3,743 | 3,897 | 3,897 | 3,897 | 3,908 | 3947 | 4006 | 4106 | 4209 | 4314 | |
| Other Intangible Assets - net | 561 | 527 | 496 | 514 | 498 | 488 | 478 | 483 | 490 | 502 | 515 | 528 | |
| Other Assets | 615 | 732 | 711 | 897 | 813 | 880 | 726 | 733 | 744 | 763 | 782 | 801 | |
| Total Assets | 20,991 | 21,620 | 21,330 | 20,576 | 19,851 | 19,583 | 19,194 | 19386 | 19677 | 20169 | 20673 | 21190 | |
| Current Liabilities: | |||||||||||||
| Short-term debt | 124 | 463 | 76 | 642 | 309 | 22 | 43 | 43 | 44 | 45 | 46 | 47 | |
| Merchandise accounts payable | 1,579 | 1,691 | 1,594 | 1,526 | 1,423 | 1,590 | 1,655 | 1672 | 1697 | 1739 | 1783 | 1827 | |
| Accounts payable and accrued liabilities | 2,610 | 2,810 | 3,109 | 3,333 | 3,563 | 3,271 | 3,366 | 3400 | 3451 | 3537 | 3625 | 3716 | |
| Income taxes | 355 | 362 | 296 | 227 | 352 | 296 | 168 | 170 | 172 | 177 | 181 | 185 | |
| Deferred income taxes | 407 | 400 | |||||||||||
| Total Current Liabilities | 5,075 | 5,726 | 5,075 | 5,728 | 5,647 | 5,179 | 5,232 | 5284 | 5364 | 5498 | 5635 | 5776 | |
| Long-Term Debt | 6,806 | 6,714 | 7,233 | 6,995 | 6,562 | 5,861 | 4,708 | 4755 | 4826 | 4947 | 5071 | 5198 | |
| Deferred Income Taxes | 1,238 | 1,273 | 1,443 | 1,477 | 1,443 | 1,148 | 1,238 | 1250 | 1269 | 1301 | 1333 | 1367 | |
| Other Liabilities | 1,821 | 1,658 | 2,201 | 2,123 | 1,877 | 1,662 | 1,580 | 1596 | 1620 | 1660 | 1702 | 1744 | |
| Shareholders' Equity: | ' | ||||||||||||
| Common stock (307.5 and 304.8 shares outstanding) | 4 | 4 | 4 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | |
| Additional paid-in capital | 3,872 | 2,522 | 1,048 | 621 | 617 | 676 | 652 | 659 | 668 | 685 | 702 | 720 | |
| Accumulated equity | 5,108 | 6,235 | 7,340 | 6,334 | 6,088 | 7,246 | 8,050 | 8131 | 8252 | 8459 | 8670 | 8887 | |
| Treasury stock | -2,002 | -1,847 | (1,942) | (1,665) | (1,489) | (1,456) | (1,318) | -1331 | -1351 | -1385 | -1420 | -1455 | |
| Accumulated other comprehensive loss | -931 | -665 | (1,072) | (1,043) | (896) | (724) | (951) | -961 | -975 | -999 | -1024 | -1050 | |
| Total Macy's, Inc. Shareholders' Equity | 5,378 | 4,250 | 4,323 | 5,745 | 6,436 | 6500 | 6598 | 6763 | 6932 | 7105 | |||
| Noncontrolling interest | 0 | 3 | (1) | (12) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Total Shareholders' Equity | 6,051 | 6,249 | 5,378 | 4,253 | 4,322 | 5,733 | 6,436 | 6500 | 6598 | 6763 | 6932 | 7105 | |
| Total Liabilities and Shareholders' Equity | $20,991 | $21,620 | $ 21,330 | $ 20,576 | $ 19,851 | $ 19,583 | $ 19,194 | 19386 | 19677 | 20169 | 20673 | 21190 | |
| Consolidated Statements of Cash Flows $ in Thousands | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| Cash flows from operating activities: | |||||||||||||
| Net income | $1,335 | $ 1,486 | $ 1,526 | $ 1,070 | $ 619 | $ 1,555 | $ 1,098 | 1099 | 1100 | 1101 | 1102 | 1103 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Restructuring, impairment, store closing and other costs | 5 | 88 | 87 | 288 | 479 | 186 | 136 | 137 | 138 | 139 | 140 | 141 | |
| Settlement charges | 0 | 0 | 98 | 105 | 88 | 89 | 90 | 91 | 92 | 93 | |||
| Depreciation and amortization | 1,049 | 1,020 | 1,036 | 1,061 | 1,058 | 991 | 962 | 1,022 | 1,019 | 1,010 | 1,001 | 1,003 | |
| Stock-based compensation expense | 61 | 62 | 73 | 65 | 61 | 58 | 63 | 64.0 | 65.0 | 66.1 | 67.1 | 68.1 | |
| Gains on sale of real estate | (92) | (212) | (209) | (544) | (389) | -388.0 | -387.0 | -386.0 | -384.9 | -383.9 | |||
| Amortization of financing costs and premium on acquired debt | -16 | (8) | (5) | (14) | (14) | (45) | (15) | -14.0 | -13.0 | -12.0 | -10.9 | -9.9 | |
| Changes in assets and liabilities: | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||||||
| (Increase) decrease in receivables | 7 | (58) | 22 | (45) | (1) | 120 | (61) | -60.0 | -59.0 | -58.0 | -56.9 | -55.9 | |
| (Increase) decrease in merchandise inventories | -191 | (249) | 44 | (60) | 107 | 221 | (87) | -86.0 | -85.0 | -84.0 | -82.9 | -81.9 | |
| Decrease in prepaid expenses and other current assets | -7 | (2) | (3) | 0 | 37 | 17 | 21 | 22.0 | 23.0 | 24.1 | 25.1 | 26.1 | |
| Increase in other assets not separately identified | 23 | (1) | (61) | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | |||||
| Increase (decrease) in merchandise accounts payable | 23 | 101 | (21) | (78) | (132) | 162 | 55 | 56.0 | 57.0 | 58.1 | 59.1 | 60.1 | Used a rolling average for depreciation |
| Increase (decrease) in accounts payable, accrued liabilities and other items not separately identified | -33 | 48 | 129 | 116 | (185) | (186) | 44 | 45.0 | 46.0 | 47.1 | 48.1 | 49.1 | |
| Increase (decrease) in current income taxes | -16 | 7 | (65) | (69) | 125 | (114) | (136) | -135.0 | -134.0 | -133.0 | -131.9 | -130.9 | |
| Increase (decrease) in deferred income taxes | 14 | (142) | 29 | (1) | (134) | (421) | 112 | 113.0 | 114.0 | 115.1 | 116.1 | 117.1 | |
| Increase (decrease) in other liabilities not separately identified | -75 | 197 | 10 | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | |||||
| Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net | (137) | (108) | (129) | (156) | -155.0 | -154.0 | -153.0 | -151.9 | -150.9 | ||||
| Net cash provided by operating activities | 2,179 | 2,549 | 2,709 | 1,984 | 1,801 | 1,976 | 1,735 | 1736.0 | 1737.0 | 1738.1 | 1739.1 | 1740.1 | |
| Cash flows from investing activities: | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||||||
| Purchase of property and equipment | -698 | (607) | (770) | (777) | (596) | (487) | (657) | -656.0 | -655.0 | -654.0 | -652.9 | -651.9 | |
| Capitalized software | -244 | (256) | (298) | (336) | (316) | (273) | (275) | -274.0 | -273.0 | -272.0 | -270.9 | -269.9 | |
| Acquisition of Bluemercury, Inc., net of cash acquired | 0 | 0 | (212) | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | |||||
| Disposition of property and equipment | 66 | 132 | 172 | 204 | 673 | 411 | 474 | 475.0 | 476.0 | 477.1 | 478.1 | 479.1 | |
| Other, net | 95 | (57) | (74) | 29 | (4) | (2) | 2 | 3.0 | 4.0 | 5.1 | 6.1 | 7.1 | |
| Net cash used by investing activities | -781 | (788) | (970) | (1,092) | (243) | (351) | (456) | -455.0 | -454.0 | -453.0 | -451.9 | -450.9 | |
| Cash flows from financing activities: | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||||||
| Repayments of Debt | (754) | (988) | (1,149) | -1148.0 | -1147.0 | -1146.0 | -1144.9 | -1143.9 | |||||
| Proceeds from Issuance of Commercial Paper | 1,000 | 400 | 1,044 | 499 | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||
| Financing costs | -11 | (9) | (9) | (4) | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||
| Debt repaid | -1,803 | (124) | (870) | (152) | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||
| Dividends paid | -324 | (359) | (421) | (456) | (459) | (461) | (463) | -462.0 | -461.0 | -460.0 | -458.9 | -457.9 | |
| Increase (decrease) in outstanding checks | -88 | 24 | 133 | (83) | 61 | (15) | 16 | 17.0 | 18.0 | 19.1 | 20.1 | 21.1 | |
| Acquisition of treasury stock | -1,397 | (1,571) | (1,901) | (2,001) | (316) | (1) | 0 | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | |
| Issuance of common stock | 234 | 315 | 258 | 163 | 36 | 6 | 45 | 46.0 | 47.0 | 48.1 | 49.1 | 50.1 | |
| Proceeds from noncontrolling interest | 0 | 0 | 5 | 6 | 13 | 7 | 8.0 | 9.0 | 10.1 | 11.1 | 12.1 | ||
| Net cash used by financing activities | -2,389 | (1,324) | (1,766) | (2,029) | (1,426) | (1,446) | (1,544) | -1543.0 | -1542.0 | -1541.0 | -1539.9 | -1538.9 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | -991 | 437 | (27) | (1,137) | 132 | 179 | (265) | -264.0 | -263.0 | -262.0 | -260.9 | -259.9 | |
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, beginning of period | 2,827 | 1,836 | 2,273 | 2,246 | 1,202 | 1,334 | 1,513 | 1514.0 | 1515.0 | 1516.1 | 1517.1 | 1518.1 | |
| Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, end of period | 1,836 | 2,273 | 2,246 | 1,109 | 1,334 | 1,513 | 1,248 | 1249.0 | 1250.0 | 1251.1 | 1252.1 | 1253.1 | |
| Supplemental cash flow information: | 1.0 | 2.0 | 3.1 | 4.1 | 5.1 | ||||||||
| Interest paid | 585 | 388 | 413 | 383 | 396 | 361 | 328 | 329.0 | 330.0 | 331.1 | 332.1 | 333.1 | |
| Interest received | 2 | 2 | 2 | 2 | 4 | 12 | 25 | 26.0 | 27.0 | 28.1 | 29.1 | 30.1 | |
| Income taxes paid (net of refunds received) | $738 | $ 835 | $ 834 | $ 635 | $ 352 | $ 496 | $ 345 | 346.0 | 347.0 | 348.1 | 349.1 | 350.1 | |
| Depreciation Expense Consolidated Statements of Cash Flows | 1,049 | 1,020 | 1,036 | 1,061 | 1,058 | 991 | 962 | 1,022 | 1,019 | 1,010 | 1,001 | 1,003 | |
| COMMON SIZE INCOME STATEMENT | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2024 | 2025 | |
| Net sales | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |
| Credit Card Revenues, Net | 0% | 0% | 0% | 0% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | |
| Cost of sales | -60% | -60% | -60% | -61% | -60% | -61% | -61% | -61% | -61% | -61% | -61% | -61% | |
| Gross margin | 40% | 40% | 40% | 39% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
| Selling, general and administrative expenses | -31% | -30% | -30% | -31% | -36% | -36% | -36% | -36% | -36% | -36% | -36% | -36% | |
| Gains on sale of real estate | 0% | 0% | 0% | 1% | 1% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | |
| Restructuring, impairment, store closing and other costs | -0% | -0% | -0% | -1% | -2% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | |
| Settlement charges | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
| Operating income (loss) | 10% | 10% | 10% | 8% | 5% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | |
| Benefit plan income, net | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
| Settlement charges | 0% | 0% | 0% | 0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | |
| Interest expense | -2% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | -1% | |
| Gains (losses) on early retirement of debt | -0% | 0% | -0% | 0% | 0% | 0% | -0% | -0% | -0% | -0% | -0% | -0% | |
| Interest income | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | |
| Income (loss) before income taxes | 8% | 8% | 9% | 6% | 4% | 6% | 6% | 6% | 6% | 6% | 6% | 6% | |
| Federal, state and local income tax benefit (expense) | -3% | -3% | -3% | -2% | -1% | 0% | -1% | -1% | -1% | -1% | -1% | -1% | |
| Net income (loss) | 5% | 5% | 5% | 4% | 2% | 6% | 4% | 4% | 4% | 4% | 4% | 4% | |
| COMMON SIZE BALANCE SHEET | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2024 | 2025 | |
| Current Assets: | |||||||||||||
| Cash and cash equivalents | 11% | 11% | 5% | 7% | 7% | 6% | 6% | 6% | 6% | 6% | 6% | ||
| Receivables | 2% | 2% | 3% | 3% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | ||
| Merchandise Inventories | 26% | 25% | 27% | 27% | 26% | 27% | 27% | 27% | 27% | 27% | 27% | ||
| Prepaid expenses and other current assets | 2% | 2% | 2% | 2% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | ||
| Total Current Assets | 40% | 40% | 37% | 38% | 39% | 39% | 39% | 39% | 39% | 39% | 39% | ||
| Property and Equipment - net | 37% | 37% | 37% | 35% | 34% | 35% | 35% | 35% | 35% | 35% | 35% | ||
| Goodwill | 17% | 18% | 19% | 20% | 20% | 20% | 20% | 20% | 20% | 20% | 20% | ||
| Other Intangible Assets - net | 2% | 2% | 2% | 3% | 2% | 2% | 2% | 2% | 2% | 2% | 2% | ||
| Other Assets | 3% | 3% | 4% | 4% | 4% | 4% | 4% | 4% | 4% | 4% | 4% | ||
| Total Assets | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | ||
| Current Liabilities: | |||||||||||||
| Short-term debt | 2% | 0% | 3% | 2% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | ||
| Merchandise accounts payable | 8% | 7% | 7% | 7% | 8% | 9% | 9% | 9% | 9% | 9% | 9% | ||
| Accounts payable and accrued liabilities | 13% | 15% | 16% | 18% | 17% | 18% | 18% | 18% | 18% | 18% | 18% | ||
| Income taxes | 2% | 1% | 1% | 2% | 2% | 1% | 1% | 1% | 1% | 1% | 1% | ||
| Deferred income taxes | 2% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | ||
| Total Current Liabilities | 26% | 24% | 28% | 28% | 26% | 27% | 27% | 27% | 27% | 27% | 27% | ||
| Long-Term Debt | 31% | 34% | 34% | 33% | 30% | 25% | 25% | 25% | 25% | 25% | 25% | ||
| Deferred Income Taxes | 6% | 7% | 7% | 7% | 6% | 6% | 6% | 6% | 6% | 6% | 6% | ||
| Other Liabilities | 8% | 10% | 10% | 9% | 8% | 8% | 8% | 8% | 8% | 8% | 8% | ||
| Shareholders' Equity: | |||||||||||||
| Common stock (307.5 and 304.8 shares outstanding) | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | ||
| Additional paid-in capital | 12% | 5% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | 3% | ||
| Accumulated equity | 29% | 34% | 31% | 31% | 37% | 42% | 42% | 42% | 42% | 42% | 42% | ||
| Treasury stock | -9% | -9% | -8% | -8% | -7% | -7% | -7% | -7% | -7% | -7% | -7% | ||
| Accumulated other comprehensive loss | -3% | -5% | -5% | -5% | -4% | -5% | -5% | -5% | -5% | -5% | -5% | ||
| Total Macy's, Inc. Shareholders' Equity | 0% | 25% | 21% | 22% | 29% | 34% | 34% | 34% | 34% | 34% | 34% | ||
| Noncontrolling interest | 0% | 0% | 0% | -0% | -0% | 0% | 0% | 0% | 0% | 0% | 0% | ||
| Total Shareholders' Equity | 29% | 25% | 21% | 22% | 29% | 34% | 34% | 34% | 34% | 34% | 34% | ||
| Total Liabilities and Shareholders' Equity | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | ||
| GROWTH OF INCOME STATEMENT | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2024 | 2025 | |
| Net sales | 1% | 1% | -4% | -4% | -4% | 0% | 0% | 0% | 0% | 0% | 0% | ||
| Credit Card Revenues, Net | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | 7% | 9% | 0% | 0% | 0% | 0% | 0% | ||
| Cost of sales | 1% | 1% | -2% | -5% | -3% | 0% | -0% | -0% | -0% | -0% | -0% | ||
| Gross margin | 1% | 0% | -6% | -100% | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | 100% | 51% | 34% | 25% | ||
| Selling, general and administrative expenses | -0% | -1% | 1% | 9% | -3% | 1% | -0% | -0% | -0% | -0% | -0% | ||
| Gains on sale of real estate | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | -1% | 160% | -28% | 0% | 0% | 0% | 0% | 0% | ||
| Restructuring, impairment, store closing and other costs | 1660% | -1% | 231% | 66% | -61% | -27% | -1% | -1% | -1% | -1% | -1% | ||
| Settlement charges | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | 100% | 51% | 34% | 25% | ||
| Operating income (loss) | 1% | 5% | -27% | -33% | 36% | -7% | 0% | 0% | 0% | 0% | 0% | ||
| Benefit plan income, net | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | 4% | -32% | 3% | 3% | 2% | 2% | 2% | ||
| Settlement charges | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | 7% | -16% | -1% | -1% | -1% | -1% | -1% | ||
| Interest expense | -8% | 1% | -8% | 1% | -13% | -19% | -0% | -0% | -0% | -0% | -0% | ||
| Gains (losses) on early retirement of debt | -100% | ERROR:#DIV/0! | -100% | ERROR:#DIV/0! | ERROR:#DIV/0! | -430% | -3% | -3% | -3% | -3% | -4% | ||
| Interest income | -33% | 0% | 0% | 100% | 175% | 127% | 4% | 4% | 4% | 4% | 4% | ||
| Income (loss) before income taxes | 9% | 4% | -30% | -42% | 57% | -6% | 0% | 0% | 0% | 0% | 0% | ||
| Federal, state and local income tax benefit (expense) | 5% | 7% | -30% | -43% | -111% | -926% | -0% | -0% | -0% | -0% | -0% | ||
| Net income (loss) | 11% | 3% | -30% | -42% | 151% | -29% | 0% | 0% | 0% | 0% | 0% | ||
| GROWTH OF BALANCE SHEET | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2024 | 2025 | |
| Current Assets: | |||||||||||||
| Cash and cash equivalents | 24% | -1% | -51% | 17% | 12% | -20% | 1% | 1% | 2% | 2% | 2% | ||
| Receivables | 18% | -3% | 32% | -6% | -30% | 10% | 1% | 1% | 2% | 2% | 2% | ||
| Merchandise Inventories | 5% | -3% | 2% | -2% | -4% | 2% | 1% | 1% | 2% | 2% | 2% | ||
| Prepaid expenses and other current assets | 16% | 17% | -3% | -15% | 59% | -5% | 1% | 1% | 2% | 2% | 2% | ||
| Total Current Assets | 10% | -1% | -11% | -0% | 0% | -3% | 1% | 1% | 2% | 2% | 2% | ||
| Property and Equipment - net | -3% | -2% | -2% | -8% | -5% | -1% | 1% | 1% | 2% | 2% | 2% | ||
| Goodwill | 0% | 0% | 4% | 0% | 0% | 0% | 1% | 1% | 2% | 2% | 2% | ||
| Other Intangible Assets - net | -6% | -6% | 4% | -3% | -2% | -2% | 1% | 1% | 2% | 2% | 2% | ||
| Other Assets | 19% | -3% | 26% | -9% | 8% | -18% | 1% | 1% | 2% | 2% | 2% | ||
| Total Assets | 3% | -1% | -4% | -4% | -1% | -2% | 1% | 1% | 2% | 2% | 2% | ||
| Current Liabilities: | |||||||||||||
| Short-term debt | 273% | -84% | 745% | -52% | -93% | 95% | 1% | 1% | 2% | 2% | 2% | ||
| Merchandise accounts payable | 7% | -6% | -4% | -7% | 12% | 4% | 1% | 1% | 2% | 2% | 2% | ||
| Accounts payable and accrued liabilities | 8% | 11% | 7% | 7% | -8% | 3% | 1% | 1% | 2% | 2% | 2% | ||
| Income taxes | 2% | -18% | -23% | 55% | -16% | -43% | 1% | 1% | 2% | 2% | 2% | ||
| Deferred income taxes | -2% | -100% | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ||
| Total Current Liabilities | 13% | -11% | 13% | -1% | -8% | 1% | 1% | 1% | 2% | 2% | 2% | ||
| Long-Term Debt | -1% | 8% | -3% | -6% | -11% | -20% | 1% | 1% | 2% | 2% | 2% | ||
| Deferred Income Taxes | 3% | 13% | 2% | -2% | -20% | 8% | 1% | 1% | 2% | 2% | 2% | ||
| Other Liabilities | -9% | 33% | -4% | -12% | -11% | -5% | 1% | 1% | 2% | 2% | 2% | ||
| Shareholders' Equity: | |||||||||||||
| Common stock (307.5 and 304.8 shares outstanding) | 0% | 0% | -25% | 0% | 0% | 0% | 1% | 1% | 2% | 2% | 2% | ||
| Additional paid-in capital | -35% | -58% | -41% | -1% | 10% | -4% | 1% | 1% | 2% | 2% | 2% | ||
| Accumulated equity | 22% | 18% | -14% | -4% | 19% | 11% | 1% | 1% | 2% | 2% | 2% | ||
| Treasury stock | -8% | 5% | -14% | -11% | -2% | -9% | 1% | 1% | 2% | 2% | 2% | ||
| Accumulated other comprehensive loss | -29% | 61% | -3% | -14% | -19% | 31% | 1% | 1% | 2% | 2% | 2% | ||
| Total Macy's, Inc. Shareholders' Equity | ERROR:#DIV/0! | ERROR:#DIV/0! | -21% | 2% | 33% | 12% | 1% | 1% | 2% | 2% | 2% | ||
| Noncontrolling interest | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | -133% | 1100% | -100% | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ERROR:#DIV/0! | ||
| Total Shareholders' Equity | 3% | -14% | -21% | 2% | 33% | 12% | 1% | 1% | 2% | 2% | 2% | ||
| Total Liabilities and Shareholders' Equity | 3% | -1% | -4% | -4% | -1% | -2% | 1% | 1% | 2% | 2% | 2% | ||
| Useful Ratios & Other Figures | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| PM (Net Profit Margin = NI/Revenue) | 5% | 5% | 4% | 2% | 6% | 4% | 4% | 4% | 4% | 4% | 4% | ||
| TAT (Total Asset Turnover = Revenue/Total Assets) | 129% | 132% | 132% | 131% | 127% | 130% | 129% | 127% | 124% | 121% | 118% | ||
| EM (Equity Multiplier = Total Assets/Total Equity) | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | ||
| ROE (Return on Equity = NI/Total Equity = PM*TAT*EM) | 7% | 7% | 5% | 3% | 8% | 6% | 6% | 6% | 5% | 5% | 5% | ||
| ROA (Return on Assets = NI/Total Assets = PM*TAT) | 7% | 7% | 5% | 3% | 8% | 6% | 6% | 6% | 5% | 5% | 5% | ||
| d (Dividend Payout Ratio = Dividends/NI … note: result is POSTIVE) | 24% | 28% | 43% | 74% | 30% | 42% | 42% | 42% | 42% | 42% | 42% | ||
| b (Retention Ratio = 1-d) | 76% | 72% | 57% | 26% | 70% | 58% | 58% | 58% | 58% | 58% | 58% | ||
| SGR (Sustainable Growth Rate = b*ROE) | 5% | 5% | 3% | 1% | 6% | 3% | 3% | 3% | 3% | 3% | 3% | ||
| IGR (Internal Growth Rate = b*ROA) | 5% | 5% | 3% | 1% | 6% | 3% | 3% | 3% | 3% | 3% | 3% | ||
| TIE (Times Interest Earned Ratio = EBIT/Interest) | |||||||||||||
| DOL (Degree of Operating Leverage [point estimate] = Gross Profit/OpInc) | 4.18 | 4.02 | 5.19 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||
| Days of sales in cash ( = Cash/[Revenue/365]) | 29.70 | 29.17 | 14.95 | 18.27 | 21.29 | 16.98 | 17.15 | 17.41 | 17.85 | 18.29 | 18.75 | ||
| Inventory Turnover ( = COGS/Avg Inventory … note: Avg Inventory = [BOY+EOY]/2 ) | -3.08 | -3.07 | -3.02 | -2.87 | -2.87 | -2.91 | -2.88 | -2.84 | -2.78 | -2.72 | -2.65 | ||
| Receivables Turnover (= Sales/Avg Receivables … note: Avg Receivables = [BOY+EOY]/2 ) | 69.05 | 65.21 | 55.15 | 47.98 | 56.36 | 65.45 | 62.12 | 61.35 | 60.15 | 58.69 | 57.26 | ||
| Purchases ( = COGS + Δ inventory) | (16,476) | (17,003) | (16,407) | (15,773) | (15,402) | (15,130) | (15,161) | (15,133) | (15,077) | (15,073) | (15,068) | ||
| Payables Turnover ( = Purchases/Avg Payables … note: Avg Payables = [BOY+EOY]/2 ) | -11.09 | -10.95 | -9.84 | -8.56 | -7.98 | -8.80 | -8.58 | -8.47 | -8.31 | -8.11 | -7.91 | ||
| Days in inventory ( = 365/Inventory Turnover) | -118.56 | -118.77 | -120.84 | -127.04 | -127.15 | -125.24 | -126.90 | -128.49 | -131.08 | -134.36 | -137.73 | ||
| Days in receivables ( = 365/Receivables Turnover) | 5.29 | 5.60 | 6.62 | 7.61 | 6.48 | 5.58 | 5.88 | 5.95 | 6.07 | 6.22 | 6.37 | ||
| Operating cycle ( = Days in Inventory + Days in Receivables) | -113.27 | -113.17 | -114.23 | -119.43 | -120.68 | -119.66 | -121.02 | -122.54 | -125.01 | -128.14 | -131.36 | ||
| Days in payables ( = 365/Paybales Turnover) | -32.92 | -33.34 | -37.11 | -42.64 | -45.73 | -41.48 | -42.56 | -43.08 | -43.91 | -45.02 | -46.16 | ||
| Cash cycle ( = Operating Cycle - Days in Payables) | -80.35 | -79.83 | -77.12 | -76.79 | -74.95 | -78.18 | -78.46 | -79.47 | -81.10 | -83.13 | -85.20 | ||
COMPARABLE COMPANIES
| Comparable Firms | |||||||||
| Ticker | P/E ratio | P/S ratio | EV/EBITDA ratio | Beta | Debt | Equity (Market Cap) | Tax Rate | Unlevered Beta | |
| TJMAXX | TJX | 38.68 | 1.72 | 24.21 | 0.71 | 16,510,000 | 64,135,000 | 20.78% | 0.59 |
| WALMART | WMT | 24.62 | 0.69 | 12.64 | 0.30 | 76,590,000 | 367,615,000 | 24.49% | 0.26 |
| TARGET | TGT | 22.96 | 0.79 | 11.20 | 0.79 | 16,700,000 | 64,687,000 | 21.07% | 0.66 |
| JC PENNY | JCPNQ | 24.59 | 0.01 | 16.48 | 1.39 | 6,130,000 | 99,326,000 | 8.08% | 1.32 |
| KOHL'S | KSS | 37.53 | 0.16 | 7.34 | 1.76 | 7,690,000 | 3,286,000 | 23.31% | 0.63 |
| DILLARD'S | DDS | 17.82 | 0.10 | 14.43 | 0.91 | 615,610,000 | 616,060,000 | 33.60% | 0.55 |
| BEST BUY | BBY | 18.85 | 0.61 | 9.81 | 1.50 | 5,300,000 | 26,324,000 | 23.71% | 1.30 |
| HOME DEPOT | HD | 26.43 | 2.58 | 17.80 | 1.06 | 41,750,000 | 287,680,000 | 23.58% | 0.95 |
| Average of Comparable Firms | 26.44 | 0.83 | 14.24 | 0.78 | |||||
| Median of Comparable Firms | 24.61 | 0.65 | 13.54 | 0.64 | |||||
DEBT
| Debt | ||||||||||
| 3.88% | ||||||||||
| 2.88% | ||||||||||
| 3.38% | Average bond YTM | |||||||||
| 3.38% | Median bond YTM | |||||||||
| 3.38% | Yield on Bonds (using median) | |||||||||
| We could also use "synthetic ratings" to estimate the cost of debt… | ||||||||||
| based on TIE (Times Interest Earned ratio) | ||||||||||
| based on Altman Z-Score | ||||||||||
| 3.38% | Cost of Debt % | |||||||||
| $6,851,716.33 | Market Value of Debt | |||||||||
| Balance Sheet Debt | ||||||||||
| $2,805.42 | Damodaran's method | |||||||||
| -261 | Interest Expense from Income Statement | |||||||||
| 4,708 | BV Debt from Balance Sheet | |||||||||
| 5 | Assumed Years to maturity | |||||||||
| Operating Leases | ||||||||||
| $4,046.29 | PV of Operating Lease Expenses | |||||||||
| Expected Op. Lease Payments: | ||||||||||
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | ||||
| 539 | 553 | 575 | 575 | 622 | 903.5 | 903.5 | ||||
| Based on data listed under "Credit Facilities and Long-Term Contractual Commitments" in HanesBrands 10-k | ||||||||||
COST OF CAPITAL
| Costs of Capital | |||||
| 2.19% Michael Dimond: from treasury.gov for date of interest | Rf (Risk-free Rate) | source: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=longtermrateYear&year=2020 TREASURY 20-Yr CMT on filing date | |||
| 6.00% Michael Dimond: Estimated. Consider the implied market return (Rf+MRP) to make sure this is reasonable. | Market Risk-Premium (MRP) | ||||
| 18.53% Michael Dimond: Same rate used in NOPAT computation for subject company. | Tax Rate | ||||
| 6,851,716.3 Michael Dimond: From "Debt" tab | MV Debt | ||||
| 11,687,604.8 Michael Dimond: Market Capitalization as of the date of interest | MV Equity | ||||
| $ 37.75 | Adjusted Close on filing date | ||||
| 309,605,426 | Shares outstanding at time of filing | ||||
| 0.78 Michael Dimond: From "Comparable Firms" tab | Unlevered Beta | ||||
| 6.88% Michael Dimond: Computed using CAPM and Unlevered Beta | Ku (Unlevered Cost of Capital) | ||||
| 1.15 Michael Dimond: Computed using Hamada's formula: Bu*(1+D/E(1-t)) |
Michael Dimond: from treasury.gov for date of interest | Levered Beta ("Bottom-up Beta") | |||
| 9.12% Michael Dimond: Computed using CAPM and Levered Beta |
Michael Dimond: Estimated. Consider the implied market return (Rf+MRP) to make sure this is reasonable. | Ke (Cost of Equity … Common Equity) | |||
| 3.38% Michael Dimond: From "Debt" tab |
Michael Dimond: Same rate used in NOPAT computation for subject company. |
Michael Dimond: From "Debt" tab |
Michael Dimond: Market Capitalization as of the date of interest | Kd (Cost of Debt … Before Tax) | |
| 6.76% Michael Dimond: WACC = we*Ke + wd*Kd*(1-t) where: we = MV Equity / (MV Equity + MV Debt) wd = MV Debt / (MV Equity + MV Debt) If preferred stock exists, include factors for weight of preferred stock and required return for preferred stock. |
Michael Dimond: From "Comparable Firms" tab |
Michael Dimond: Computed using CAPM and Unlevered Beta | WACC (Weighted Average Cost of Capital) | ||
| Remember: Rf < Kd < WACC < Ku < Ke | |||||
| 2.19% | 3.38% | 6.76% | 6.88% | 9.12% | |
| 7.00% | |||||
