FINAL EXAM – STRATEGIC CORPORATE FINANCE

FINAL EXAM – STRATEGIC CORPORATE FINANCE

Subject: Business    / Finance
Question
FINAL EXAM – STRATEGIC CORPORAT FINANCE – December 2015 NAME:
PLEASE NOTE
• The points for each question are in brackets with a maximum of 52
points achievable
• Your answers must be handed in latest after 90 minutes from the start
of the test
• CLOSED BOOKS- No materials, books or notes are allowed – only a
financial calculator is allowed
• Cheating (such as – but not exclusive – using materials, consultation
with peers, seeking electronic help via the interne mobile phone) will
result in immediate disqualification
Please find below an Income Statement and a Balance Sheet of the
following Company (total 34 points):
FINANCIAL DATA
INCOME
STATEMENT
Net Sales
Costs Material
Costs Personnel
Costs -Other
EBITDA
Depreciation /
Amort’n
EBIT 2015 2014 3176 3167 BALANCE
SHEET
Cash
Marketable
Securities
Receivables 1009 1129 Inventory 2385 2236 Total Current
Assets
892 Fixed Assets 12003 11867
5433 5335 935
1450 Interest
311
Expense
Pre-Tax Income 1139
income Taxes
Net Income 394
745 Dividend 546 1344 Intangible
Assets
351 Total Assets 2015 201
4
495 402
854 945 1283 118
2
2381 250
2
5013 503
1
7528 729
4
592 539 13133 128
64
993 Accounts Payable 1113 102
6
327 Short Term Debt
562 376
666 Total Current
1675 140
Liabilities
2
507 Long Term Debt 5944 614
7 Retained
Earnings 199 159 Total Liabilities
Shareholders
Equity 7619 754
9
5514 531
5 1. Perform a Company Analysis for the Company for 2015 including a
decomposition of RoE and RoA; all liquidity ratios; organic growth
rate; days of inventory turnover, receivable and payables (10 points)
2. Calculate the working capital cycle for the Company for 2015. How
many days need to be funded? How much Is required to fill the gap?
(4 points)
3. You are a credit rating analyst and compare major debt, leverage and
coverage ratios for the Company and compare 2014 with 2015. What
has changed? Has the risk profile increased? (4 points)
4. You are considering acquiring some shares in the Company. Would
you consider this a reasonably good investment? Why, why not? (2
points)
5. Develop a financial strategy for the Company for..2016, assuming a
revenue growth of approximately 15% and constant margins. (14
points)
• Establish a rough pro-forma Income Statement and Balance
Sheet for 2016 and decide what you would do as the
Company’s CFO and why?
• Focus on aspects, such as: Short and long-term debt; leverage;
debt capacity; dividend payout; organic growth,
capital structure optimization etc.