Instructions for Case

profilenatlya
jaguar_2.xls
Home>Business & Finance homework help>Instructions for Case

Valuation framework

Projected
1983 1984
1 Dollar/sterling 1.350
United States
2 Growth, units (%) 12.0%
3 Volume, units 15260 17091
4 Inflation (%) 3.0%
5 US$ price/unit 25631
6 sales, dollars 438065
7 sales, sterling 324492
Rest of the world
8 Growth, units (%) 12.0%
9 Volume, units 13207 14792
10 Inflation (%) 5.0%
11 price/unit , sterling 17284
12 sales, sterling 255662
13 var. cost of sales/unit 13521
14 NWC 30000
15 discount rate 18.0%
Total sales, units 31883
16 Total revenues 580154
17 Var. cost sales 431091
18 Depreciation 10000
19 R&D 18000
20 Distribution 13300 13965
21 Administration 22000 23100
22 Total Costs 496156
23 EBIT 83999
24 Tax 29400
25 EBIAT 54599
26 Depreciation 10000
27 Operating cash flow 64599
28 Increase NWC 30000
29 Capital Expenditure 11500
30 FCF 23099
31 Terminal value
discount factor 1.00
32 PV, FCF 23099
33 Value of firm (sterling)
&A
Page &P

EXHIBITS

EXHIBIT 1 Balance Sheets (in millions of pounds)
--- December 31, --- March 31,
1981 1982 1983 1984
Fixed Assets: - - - -
Tangible Assets £ 55.7 87.3 112.0 118.6
Investments in related companies -- -- 0.4 0.4
TOTAL FIXED ASSETS 55.7 87.3 112.4 119.0
Current Assets:
Stocks 56.3 68.8 62.7 76.5
Debtors 26.3 29.6 33.8 42.5
Cash & short-term deposits 1.3 6.9 29.5 11.5
TOTAL 83.9 105.3 126.0 130.5
Creditors: Amount falling due
within one year 51.3 81.1 128.8 127.5
Net Current Assets (Liabilities) 32.6 24.2 (2.8) 3.0
[PGDN] FOR MORE OF EXHIBIT 1...
Total Assets Less Current
Liabilities 88.3 111.5 109.6 122.0
Creditors: Amounts falling due
in more than one year (a) 1.2 17.6 43.9 58.0
NET 87.1 93.9 65.7 64.0
Capital and Reserves:
Called up share capital 45.0
Other Reserves 10.3 2.8
Profit and loss account 55.4 16.2
BL Group funding balance (b) 87.1 93.9
NET £ 87.1 93.9 65.7 64.0
(a) These obligations consisted primarily of capitalized leasing
obligations and warranty expense accruals.
(b) The BL Group funding balance was made up of certain loans from
BL Group which represented the capital and reserves of the Jaguar
business before the Jaguar Group acquired that business with effect
from January 1, 1983. [PGDN] FOR EXHIBIT 2...
EXHIBIT 2 Income Statements (in millions of Pounds) Quarter
ended
-- Years ended December 31, -- March 31,
1980 1981 1982 1983 1984
Turnover - - - - -
Continuing activities 166.4 195.2 305.6 472.6 143.3
Discontin. activities 83.6 48.3 4.3 -- --
TOTAL 250.0 243.5 309.9 472.6 143.3
Cost of sales (a) (273.7) (245.6) (258.4) (369.7) (108.8)
GROSS PROFIT/(LOSS) (23.7) (2.1) 51.5 102.9 34.5
Distribution costs (7.3) (7.8) (13.8) (13.3) (4.4)
Administrative expenses (8.1) (11.2) (14.8) (22.0) (6.2)
Research and dvpt. cost (5.2) (9.8) (12.8) (16.5) (5.7)
OPERATING PROFIT/(LOSS) (44.3) (30.9) 10.1 51.1 18.2
Interest (3.0) (0.8) (0.5) (1.1) (0.2)
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEF. TAX. (47.3) (31.7) 9.6 50.0 18.0
Tax. on ord. activities 1.3 -- (0.1) (0.5) (0.5)
PROFIT/(LOSS ON ORDINARY
ACTIVITIES AFT. TAX. (46.0) (31.7) 9.5 49.5 17.5
Extraordinary items (6.2) (4.6) (3.0) -- (14.2)
PROFIT/(LOSS) FOR THE
FINANCIAL PERIOD (52.2) (36.3) 6.5 49.5 3.3
Rates of exchange - Realized profits on exchange, together with
losses on exchange, whether realized or unrealized, which arise on
settlement of overseas liabilities are included in trading results.
Profit and loss account items of foreign subsidiaries are translated
into sterling at the average rate of exchange for each monthly
accounting period. Assets and liabilities, including outstanding
forward exchange contracts, are translated into sterling at the
rates of exchange ruling at the end of the financial period.
(a) Includes depreciation charges of £5.6 million in 1980, £7.3
million in 1981, £7.2 million in 1982, £8.6 million in 1983 and £2.5
million for the first quarter of 1984. [PGDN] FOR EXHIBIT 3...
EXHIBIT 3 Jaguar Sales by Models and Markets; December 31
(in number of vehicles)
1980 1981 1982 1983
Model Range: - - - -
Series III saloons 13851 12,666 17,733 23,413
XJ-S sports cars 1526 1,108 3,131 4,886
Limousines 92 159 143 168
TOTAL JAGUAR 15,469 13,933 21,007 28,467
MORE--->
1980 1981 1982 1983
Geographical Area: - - - -
United States 2,518 16% 5,154 37% 9,971 47% 15,260 54%
United Kingdom 6,135 40% 5,196 37% 6,415 31% 7,236 25%
West Germany 1,612 10% 479 3% 839 4% 1,164 4%
Rest of Europe 3,539 23% 1,229 9% 1,742 8% 1,845 6%
Australia 140 1% 654 5% 582 3% 579 2%
Canada 305 2% 375 3% 280 1% 563 2%
Rest of World 1,220 8% 846 6% 1,178 6% 1,820 6%
TOTAL JAGUAR 15,469 100% 13,933 100% 21,007 100% 28,467 100%
EXHIBIT 5 Comparative Data on Selected Manufacturers
Daimler-
BMW Benz Porsche Jaguar
DM mill. DM mill. DM mill. £mill.
- - - -
Year Ended 7/31/83 12/31/83 12/31/83 12/31/83
Revenues 11,943.0 40,004.8 2,133.6 472.6
Operating Profit 916.1 3,665.8 194.5 51.1
Profit after taxes 291.7 987.9 69.6 49.5
Depreciation charges 733.2 2,604.1 71.1 5.6
Interest expense 85.3 388.5 3.6 1.1
Total Assets 5,799.6 24,826.7 866.6 249.5
Equity 2,169.3 7,547.6 220.7 --
Debt
Long-term 652.7 7,534.0 15.7 43.9
Short term 207.1 1,100.9 34.1 128.8
[PGDN] FOR MORE OF EXHIBIT 5...
Stock Price (6/29/84) DM 343.88 467.90 1003.00 --
Shares outst. (000) 15,000 42,313 700 --
Earnings/share DM 19.45 8.40 99.43 --
Dividends/share DM 10.00 10.50 -- --
Manufact. volume (units) 407,507 483,359 48,288 28,041
Employees 50,158 184,877 5,883 8,606
Engineers 2,000 5,000 1,400 450
[PGDN] FOR EXHIBIT 6...
EXHIBIT 6 1983 New Car Registrations for U.S. and Europe by
Manufacturer
Daimler-Benz: Porsche:
U.S. 73,692 U.S. 21,831
W. Germany 246,160 W. Germany 12,176
U.K. 13,506 U.K. 3,333
Other Europe 52,394 Other Europe 2,896
TOTAL 385,752 TOTAL 40,236
BMW: Jaguar:
U.S. 59,242 U.S. 15,260
W. Germany 155,683 W. Germany 1,164
U.K. 25,178 U.K. 7,236
Other Europe 81,184 Other Europe 1,845
TOTAL 321,287 TOTAL 25,505
To view graphs, use the commands [/] [Graph] [Name] [Use]
and select graph by name. [PGDN] FOR EXHIBIT 7...
EXHIBIT 7 Quarterly Nominal Spot Exchange Rates, 1975-1984
Quarter $/£ DM/$
- - -
I-1975 R$2.418 2.319 DM
II 2.280 2.340
III 2.084 2.618
IV 2.022 2.622
I-1976 1.943 2.560
II 1.764 2.578
III 1.727 2.489
IV 1.678 2.383
I-1977 1.717 2.392
II 1.719 2.356
III 1.743 2.324
IV 1.904 2.110
I-1978 1.863 1.998
II 1.860 2.072
III 1.974 1.940 [PGDN] FOR MORE OF EXHIBIT 7...
IV 2.043 1.820
I-1979 2.062 1.868
II 2.178 1.837
III 2.204 1.741
IV 2.209 1.725
I-1980 2.154 1.957
II 2.359 1.763
III 2.384 1.814
IV 2.391 1.974
I-1981 2.237 2.111
II 1.923 2.396
III 1.801 2.323
IV 1.913 2.237
I-1982 1.784 2.413
II 1.733 2.468
III 1.693 2.531
IV 1.618 2.374
I-1983 1.483 2.429
II 1.528 2.544
III 1.495 2.631 [PGDN] FOR MORE OF EXHIBIT 7...
IV 1.445 2.728
I-1984 1.445 2.603
II 1.353 2.783
[PGDN] FOR EXHIBIT 8...
EXHIBIT 8 Inflation Rates and Contemporary Financial Market Data
INFLATION RATES
U.S. U.K. Germany
- - -
1975 9.2% 24.1% 5.9%
1976 5.8% 16.6% 4.3%
1977 6.4% 15.7% 3.8%
1978 7.6% 8.4% 2.6%
1979 11.4% 13.4% 4.1%
1980 13.5% 17.9% 5.5%
1981 10.3% 11.9% 6.4%
1982 6.2% 8.6% 5.2%
1983 3.2% 4.5% 3.3%
1984Q1 2.7% 2.7% 1.8%
1984Q2 1.1% 2.1% 0.5%
Note: Rates for 1975 through 1983 are annualized. 1984 rates are
quarterly. [PGDN] FOR MORE OF EXHIBIT 8...
STERLING EXCHANGE RATES Forward
JUNE 19, 1984: Spot 1 month 3 month 6 month 12 month
- - - - -
U.S. Dollar $ 1.3568 1.3600 1.3659 1.3752 1.3940
German Mark DM 3.7725 3.7620 3.7394 3.7047 3.6438
Japanese Yen ¥ 322.0 321.2 319.4 316.5 310.2
INTEREST RATES, Domestic Domestic
END OF JUNE 1984: Gov't Corporate Domestic
Bonds Bonds Treasury Money
(long-term) Bills Market
- - - -
U.S. $ 13.75% 14.50% 10.29% 11.63%
Germany DM 8.25% 8.00% 0.00% 6.10%
U.K. £ 10.81% 12.69% 9.08% 9.44%
Japan ¥ 7.46% 7.13% 4.91% 6.40%
Note: Domestic corporate bonds are of various terms not necessarily
identical to corresponding domestic government issues.
JAGUAR PLC, 1984
Harvard Business School
Case Software 2-291-531
Copyright (c) 1990 by the President and Fellows of Harvard College.
Developed in conjunction with MicroMentor, Inc., Cambridge, MA.
This case was prepared as a basis for class discussion rather than
to illustrate either effective or ineffective handling of an
administrative situation.
[PGDN] FOR LIST OF EXHIBITS...
WORKSHEET NAVIGATION
This worksheet contains the data from the following exhibits:
Exhibit 1: Balance Sheets
Exhibit 2: Income Statements
Exhibit 3: Jaguar Sales by Models and Markets
Exhibit 5: Comparative Data on Selected Manufacturers
Exhibit 6: 1983 New Car Registrations for U.S. and Europe by
Manufacturer
Exhibit 7: Quarterly Nominal Spot Exchange Rates, 1975-1984
Exhibit 8: Inflation Rates & Contemporary Financial Market Data
The data for the first exhibit are located in the [HOME] position.
To view each succeeding exhibit, press the [PGDN] key. For a
description of a more efficient means of navigation, press the
[PGDN] key now. [PGDN] FOR MORE...
OPTIONAL NAVIGATIONAL TECHNIQUE
Each exhibit in this worksheet has been named using the <Range>
<Name> <Create> commands in Lotus 1-2-3. This allows you to easily
move from one section of the worksheet to another. To go to a
specific exhibit, press function key [F5], then [F3], highlight the
name of the exhibit you wish to see, and press [ENTER].
For example, to go to Exhibit 3:
Press [F5] to select the GOTO function
Press [F3] to display a list of range NAMES
Right arrow key twice to select EXHIBIT-03
Press [ENTER] to complete the process
Hit [HOME] to go to exhibits...
REVISION HISTORY
Date Name Explanation of Change
- - - - - - -
10/18/90 C. Lutter MicroMentor, Inc., Cambridge, MA.
Created for Prof. Carl Kester
IMF, 2nd year, Spring 1991

CURRENT

U.S.
W. Germany
U.K.
Other Europe
&A
Page &P
BMW
59242
155683
25178
81184

PORSCHE

U.S.
W. Germany
U.K.
Other Europe
&A
Page &P
Porsche
21831
12176
3333
2896

JAGUAR

U.S.
W. Germany
U.K.
Other Europe
&A
Page &P
Jaguar
15260
1164
7236
1845

DAIMLER-BENZ

U.S.
W. Germany
U.K.
Other Europe
&A
Page &P
Daimler-Benz
73692
246160
13506
52394

BMW

U.S.
W. Germany
U.K.
Other Europe
&A
Page &P
BMW
59242
155683
25178
81184