Student Spreadsheet
Student Spreadsheet
Copyright 2010 President and Fellows of Harvard College. No part of this product may be
reproduced, stored in a retrieval system or transmitted in any form or by any meanselectronic,
mechanical, photocopying, recording or otherwisewithout the permission of Harvard Business
School.
Exhibit 1 Financial Statements for American Chemical and Other Selected Large Chemical Companies
1974
4828
323
$7.60
$1.00
5.3%
American Chemical
1975
1976
1977
4671
4805
5235
198
212
251
$4.66
$4.98
$5.91
$1.25
$1.50
$1.65
5.7%
4.3%
5.0%
1974
6910
404
$2.74
$1.83
6.0%
1975
7221
272
$1.81
$1.42
3.2%
1978
5490
349
$8.20
$1.80
4.1%
1974
2216
151
$5.43
$1.53
6.3%
Allied Chemical
1975
1976
2333
2630
116
117
$4.17
$4.52
$1.80
$1.80
5.4%
4.5%
1978
10584
787
$5.39
$2.42
5.8%
1974
3498
323
$9.35
$2.30
5.9%
1975
3625
306
$8.63
$2.55
3.4%
1977
2923
135
$4.93
$1.85
4.5%
1978
3268
120
$4.25
$2.00
7.1%
1974
4938
558
$3.18
$.60
2.5%
Dow Chemical
1975
1976
4888
5652
616
613
$3.33
$3.30
$.75
$.95
1.7%
2.3%
1977
4595
276
$7.46
$3.03
5.4%
1978
5019
303
$8.29
$3.18
6.8%
1974
5320
530
$8.69
$2.18
5.3%
Union Carbide
1975
1976
5665
6346
382
441
$6.23
$7.15
$2.40
$2.50
3.9%
4.0%
1977
1978
Sales ($millions)
6234
6888
Net income ($millions)
566
575
Earnings per share
$3.01
$3.16
Dividends per share
$1.15
$1.30
Dividend yield
4.5%
5.6%
Common stock prices
High
$23
$30
$36
$46
$48
$54
$42
$45
$51
$45
$35
$48
$57
$44
$31
Low
$10
$17
$21
$30
$32
$23
$27
$33
$39
$28
$25
$27
$38
$25
$22
Close
$19.00
$21.90
$34.86
$33.10
$44.28
$28.24
$32.94
$39.78
$43.88
$28.05
$27.98
$45.95
$42.90
$27.09
$24.96
Closing P/E
2.5 x
4.7 x
7.0 x
5.6 x
5.4 x
5.2 x
7.9 x
8.8 x
8.9 x
6.6 x
8.8 x
13.8x
13.0x
9.0 x
7.9 x
Total capitalization ($MM)
2014
2109
2198
2465
2527
1550
1839
1959
2279
2467
3498
4316
5118
5889
6793
Debt
886
780
813
715
986
434
625
646
820
937
1294
1554
1894
2356
2921
Preferred stock
505
Common stock
1128
1329
1385
1750
1036
1116
1214
1313
1459
1530
2204
2762
3224
3533
3872
Number of shares (millions)
43
42
43
42
43
28
28
26
27
28
175
185
186
188
182
Market value of equity ($MM)
$808
$931
$1,484
$1,406
$1,885
$785
$916
$1,030
$1,202
$792
$4,910
$8,501
$7,969
$5,094
$4,543
Beta
------------------------------------1.20--------------------------------------------------------------------1.43-----------------------------------------------------------------------1.25----------------------------------Interest coverage (a)
6.3
3.9
4.1
4.3
6.7
9.2
5.7
5.2
5.4
4.9
10.6
8.2
6.5
4.9
4.4
Bond rating (b)
-----------------------------------BBB/A-------------------------------------------------------------------A/A------------------------------------------------------------------------A/Aa---------------------------------Du Pont
1976
8361
459
$3.10
$1.75
3.7%
1977
9435
545
$3.69
$1.92
4.8%
Monsanto
1976
4270
366
$10.05
$2.75
3.2%
1977
1978
Sales ($millions)
7036
7870
Net income ($millions)
385
394
Earnings per share
$6.05
$6.09
Dividends per share
$2.80
$2.80
Dividend yield
6.8%
8.2%
Common stock prices
High
$60
$45
$54
$45
$46
$70
$81
$100
$89
$60
$46
$67
$77
$62
$43
Low
$28
$29
$39
$35
$33
$39
$41
$76
$52
$44
$32
$40
$56
$40
$34
Close
$30.96
$41.99
$44.95
$39.85
$42.04
$41.14
$75.94
$88.44
$58.19
$47.25
$40.84
$61.05
$62.21
$41.14
$34.10
Closing P/E
11.3x
23.2 x
14.5 x
10.8 x
7.8 x
4.4 x
8.8 x
8.8 x
7.8 x
5.7 x
4.7 x
9.8 x
8.7 x
6.8 x
5.6 x
Total capitalization ($MM)
4874
5085
5772
6127
6394
2396
2942
3349
3668
4115
3752
4485
5212
5750
5997
Debt
780
864
1270
1287
1087
599
853
904
1027
1235
976
1346
1668
1725
1679
Preferred stock
244
254
231
245
256
Common stock
3850
3966
4271
4595
5051
1797
2089
2445
2641
2881
2776
3140
3544
4025
4318
Number of shares (millions)
147
150
148
148
146
35
35
36
37
37
61
61
62
64
65
Market value of equity ($MM)
$4,565
$6,310
$6,656
$5,886
$6,139
$1,421
$2,693
$3,221
$2,153
$1,727
$2,491
$3,744
$3,837
$2,618
$2,206
Beta
-----------------------------------1.22----------------------------------------------------------------------1.43----------------------------------------------------------------------1.05----------------------------------9.5
4.1
6.0
6.1
9.5
11.4
9.1
8.4
7.0
6.5
14.0
8.4
7.0
5.0
4.9
Interest coverage (a)
Bond rating (b)
---------------------------------AAA/Aaa------------------------------ ---------------------------------AA/Aa------------------------------ --------------------------------AA/Aa------------------------------
(a) Equal to earnings before interest and taxes divided by interest expenses, (b) Standard & Poor's rating/Moody's rating. NR means Not Rated.
Exhibit 2 Financial Statements for Universal Paper and Other Selected Large Chemical Companies
1974
1867
149
$3.60
$0.75
6.3%
Universal Paper
1975
1976
1902
2136
109
154
$2.63
$3.72
$0.75
$0.75
3.9%
2.5%
Mead Corporation
1975
1976
1245
1599
53
89
$2.05
$3.61
$0.80
$0.89
6.6%
4.4%
1978
2525
191
$4.61
$1.00
3.6%
1974
1172
125
$5.06
$1.75
7.5%
1977
1822
98
$4.10
$0.98
4.7%
1978
2322
121
$5.12
$1.21
6.8%
1974
1439
95
$4.10
$1.48
6.5%
Crown Zellerbach
1975
1976
1767
2136
75
98
$3.01
$3.88
$1.80
$1.80
5.1%
4.0%
Kimberly-Clark
1975
1976
1484
1585
103
121
$4.41
$5.21
$1.60
$1.80
4.4%
4.1%
1977
2318
109
$4.34
$1.83
5.6%
1978
2467
112
$4.39
$1.90
6.2%
1974
3042
263
$5.95
$1.75
5.6%
1977
1726
131
$5.60
$2.20
5.1%
1978
1911
149
$6.36
$2.60
6.4%
1974
1471
105
$4.76
$1.25
7.3%
International Paper
1975
1976
3081
3541
218
254
$4.93
$5.60
$2.00
$2.00
3.5%
2.9%
1977
1978
Sales ($millions)
3669
4150
Net income ($millions)
234
234
Earnings per share
$4.98
$4.94
Dividends per share
$2.00
$2.00
Dividend yield
4.6%
5.5%
Common stock prices
High
$17
$21
$34
$36
$38
$40
$41
$49
$45
$38
$56
$62
$80
$70
$49
Low
$10
$12
$18
$24
$26
$20
$24
$36
$32
$29
$32
$35
$58
$39
$35
Close
$12.24
$18.67
$30.13
$30.04
$27.66
$23.78
$36.12
$45.01
$33.85
$31.17
$36.30
$58.17
$68.88
$43.82
$37.05
Closing P/E
3.4 x
7.1 x
8.1 x
7.4 x
6.0 x
4.7 x
12.0x
11.6x
7.8 x
7.1 x
6.1 x
11.8x
12.3 x
8.8 x
7.5 x
Total book capitalization ($MM)
1349
1620
1787
1938
2018
1220
1290
1345
1446
1647
2207
2801
3093
3303
3407
Debt
405
470
572
620
666
403
426
417
434
560
728
1148
1052
1057
954
Preferred stock
12
13
13
14
16
Common stock
944
1150
1215
1318
1352
805
851
915
998
1071
1479
1653
2041
2246
2453
Number of shares (millions)
41.4
41.4
41.4
41.4
41.4
24.7
24.9
25.3
25.1
25.5
44.2
44.2
45.4
47.0
47.4
Market value of equity ($MM)
$507
$774
$1,247
$1,243
$1,146
$588
$900
$1,137
$850
$795
$1,604
$2,572
$3,124
$2,059
$1,755
Beta
-----------------------------------1.52----------------------------------------------------------------------1.03----------------------------------------------------------------------1.43----------------------------------Interest coverage (a)
6.8
5.0
6.8
7.4
8.2
8.1
4.5
5.3
5.7
4.7
11.1
5.4
5.1
4.7
5.3
Bond rating (b)
-----------------------------------A/Aa----------------------------------------------------------------------A/A----------------------------------------------------------------------AA/Aa---------------------------------
1974
1526
82
$3.27
$0.60
9.2%
1977
2248
168
$4.06
$0.85
2.8%
1977
1978
Sales ($millions)
1996
2300
Net income ($millions)
107
127
Earnings per share
$3.36
$3.94
Dividends per share
$1.66
$1.74
Dividend yield
5.6%
6.4%
Common stock prices
High
$13
$13
$23
$24
$34
$35
$37
$47
$48
$50
$37
$35
$31
$39
$35
Low
$8
$9
$12
$18
$17
$19
$24
$36
$37
$39
$18
$20
$34
$29
$26
Close
$9.16
$12.10
$20.94
$22.14
$23.04
$25.01
$37.04
$43.76
$43.12
$40.70
$19.04
$34.16
$38.96
$30.91
$27.97
Closing P/E
2.8 x
5.9 x
5.8 x
5.4 x
4.5 x
6.1 x
8.4 x
8.4 x
7.7 x
6.4 x
4.0 x
8.0 x
10.2 x
9.2 x
7.1 x
Total book capitalization ($MM)
826
880
965
1071
1171
1030
1086
1196
1347
1435
1127
1189
1296
1694
1791
Debt
281
308
318
407
422
247
228
239
269
273
372
345
337
525
537
Preferred stock
50
53
48
43
12
Common stock
496
519
598
621
738
783
858
957
1078
1162
755
844
959
1169
1254
Number of shares (millions)
25.1
25.9
24.7
23.9
23.6
23.2
23.4
23.2
23.4
23.4
22.1
22.5
23.8
31.8
32.2
Market value of equity ($MM)
$230
$313
$516
$529
$545
$580
$865
$1,016
$1,009
$954
$420
$768
$928
$984
$902
Beta
-----------------------------------2.16----------------------------------------------------------------------0.99------------------------------------------------------------------------1.14---------------------------------Interest coverage (a)
4.6
2.9
4.5
4.7
5.3
9.1
8.3
10.0
10.1
10.5
7.6
7.2
6.1
5.6
5.9
Bond rating (b)
-----------------------------------A/A--------------------------------- -----------------------------------AA/Aa-------------------------------------------------------------------NR/NR--------------------------------(a) Equal to earnings before interest and taxes divided by interest expenses, (b) Standard & Poor's rating/Moody's rating. NR means Not Rated.
Year
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
a
Expected
Sales of Sodium
Chlorate
220,000 tons
260,000
280,000
300,000
310,000
270,000
345,000
380,000
410,000
435,000a
Domestic
Capacity
Average Price
270,000 tons
$129/ton
300,000
136
300,000
144
320,000
152
335,000
188
355,000
243
370,000
295
385,000
367
420,000
392
455,000
413a
Capacity
114,000 tons
Plants
a
Columbus, MS
Taft, LA
Niagara Falls, NY
a
Calvert City, KY
Portland, OR
Tacoma, WA
a
Collinsville, AL
Wenatchee, WA
a
Hamilton, MS
Henderson, NV
Orrington, ME
a
McIntosh, AL
a
Monroe, LA
a
Rome, GA
a
Plaquemine, LA
a
Brunswick, GA
a
Reigelwood, NC
a
Butler, AL
Henderson, NV
a
Pennwalt Corporation
72,000
65,000
Kerr-McGee Corporation
63,000
40,000
20,000
20,000
20,000
15,000
11,000
10,000
5,000
455.000 tons
Capacity
65,000 tons
40,000
9,000
37,000
26,000
9,000
40,000
25,000
33,000
30,000
40,000
20,000
20,000
20,000
15,000
11,000
6,000
4,000
5,000
455.000 tons
311.000 tons
1974
1978
1979a
Revenues
Sales-tons
Average price/ton
Sales - $000
36,899
$ 188
$6,937
30,819
$ 243
$7,489
37,464
$ 295
$11,052
40,076
$ 367
$14,708
39,790
$ 392
$15,598
38,507
$ 413
$15,903
Manufacturing Costs
Variable - Power
- Graphite
- Salt & other
Total variable
$2,935
354
693
$3,982
$3,395
369
800
$4,564
$4,631
545
1,047
$6,223
$5,530
653
1,274
$7,457
$6,173
689
1,307
$8,169
$6,759
714
1,385
$8,858
Fixed - Labor
- Maintenance
- Other
Total fixed
Total Manufacturing Costs
Other Charges
Depreciation
Selling
R&D
Total
$ 590
143
474
$1,207
$5,189
$ 608
201
659
$1,468
$6,032
$ 646
220
902
$1,768
$7,991
$ 739
272
1,063
$2,074
$9,531
$ 924
235
509
$1,668
$9,837
$1,072
237
1,107
$2,416
$11,274
$ 433
114
105
$ 652
$ 394
92
154
$ 640
$ 402
126
207
$ 735
$ 391
155
274
$ 820
$ 384
181
351
$ 916
$ 399
204
429
$1,032
Operating Profit
$1,096
$ 817
$2,326
$4,357
$4,845
$3,597
Expected
Exhibit 6 (continued)
1974
1979a
Assets
Accounts receivable
Inventories
Net property, plant &
equipment
Total
$701
254
$779
544
$1,128
681
$1,456
647
$1,575
639
$1,622
651
4,066
$5,021
3,978
$5,301
4,003
$5,812
3,853
$5,956
3,964
$6,178
4,014
$6,287
Liabilities
Accounts payable
Net Assets
$ 402
$4,619
$ 472
$4,829
$ 619
$5,193
$ 780
$5,176
$ 795
$5,383
$ 873
$5,414
42.3%
57.4
17.4
74.8
15.8
45.3%
60.9
19.6
80.5
10.9
41.9%
56.3
16.0
72.3
21.0
37.6%
50.7
14.1
64.8
29.6
39.6%
52.4
10.7
63.1
31.1
42.5%
55.7
15.2
70.9
22.6
10.1
3.7
5.8
66.6
10.4
7.3
6.3
64.5
10.2
6.2
5.6
47.0
9.9
4.4
5.3
35.2
10.1
4.1
5.1
34.5
10.2
4.1
5.5
34.0
23.7
16.9
44.8
84.2
90.0
66.4
Accounts receivable
Inventories
Accounts payable
Net assets
Operating Profit/Net Assets
Expected
1975
Sales
Cost of goods sold
Selling and admin.
Research
Interest
Taxes
Profit after taxes
Earnings per share
Dividends per share
1979a
$19,128
14,085
1,952
325
400
1,125
$1,241
$1.13
$ .20
$23,830
16,889
2,308
388
320
1,878
$2,047
$1.86
$ .30
$28,348
19,950
2,824
593
240
2,285
$2,456
$2.23
$ .40
$34,770
24,467
3,291
682
160
2,932
$3,238
$2.94
$ .40
$42,259
29,185
4,436
716
80
3,818
$4,024
$3.66
$ .50
$385
4,208
7,436
$12,029
$357
5,016
7,895
$13,268
$556
5,939
8,354
$14,849
$1,273
7,267
8,842
$17,382
$4,824
8,029
8,918
$21,771
Current liabilities
Debt (incl. cur. mat.)
Stockholders' equity
Total liabilities
$2,314
5,000
4,715
$12,029
$ 2,836
4,000
6,432
$13,268
$3,402
3,000
8,447
$14,849
$4,138
2,000
11,244
$17,382
$ 6,053
1,000
14,718
$21,771
$7-14
$9
-----
$8-22
$20
-----
$19-30
$27
1.06
Not rated
$25-40
$38
-----
Expected
$35-45
$40 (10/30/79)
-----
Exhibit 8 Pro Forma Financial Statements for the Collinsville Plant3 (000s)
1980
Revenues
Sales-tons
Average price/ton
Sales - $000
trend
slope
32,000
415
13,280
6.0
0.091491868
35,000
480
16,800
6.2
38,000
520
19,760
6.3
38,000
562
21,356
6.3
6,304
0.47
0.01
6294.72
7,735
0.46
10,526
0.49
7728
9,386
0.48
0.02
9386
10464.44
0.474
7000
0.028
196.00
6272
0.46
7000
0.031
219.52
7683
0.475
7000
0.035
245.86
9343
0.49
7000
0.039
275.37
10464
- Graphite
% of sales
slope
645
0.049
-0.001
791
0.047
875
0.044
960
0.045
1,285
0.097
-0.003
1,621
0.096
1,753
0.089
1,836
0.086
$ 8,234
$ 10,147
$ 12,014
$ 13,302
1,180
0.089
-0.003
1,297
0.077
1,427
0.072
1,580
0.074
256
277
0.019277108 0.016488095
-0.00092194
299
0.015131579
322
0.01507773
Manufacturing costs
Variable - Power
% of sales
slope
power cost 2
% of sales
power units in ton
power cost 2/kwh
power cost/ton
power cost 3
Total variable
Fixed - Labor
% OF SALES
SLOPE
- Maintenance
% OF SALES
SLOPE
- Other
Total fixed
Total manufacturing costs
Other charges
Selling
R&D
Depreciation
1,154
1,148
1,179
322
$ 2,590
$ 10,824
$ 2,722
$ 12,869
$ 2,905
$ 14,919
1,113
$ 3,015
$ 16,317
$ 125
478
$ 1,110
$ 138
508
$ 1,160
112
451
$ 1,060
$ 152
543
Total
Operating Profit
$ 1,623
$ 833
$ 1,713
$2,218
$ 1,806
$ 3,035
$ 1,210
$ 1,905
$3,134
1984
1985
1986
1987
1988
1989
38,000
606
23,028
6.4
38,000
660.54
25101
38,000
720.0
27360
38,000
784.8
29822
38,000
855.4
32506
38,000
932.4
35431
11,780
0.51
11767.308
13106.7
0.52
0.53
13107
14576.8
0.53
0.54
14577
16205.3
0.54
0.55
16205
18008.9
0.55
0.56
18009
20005.9
0.56
0.57
20006
0.511
7000
0.044
308.41
11720
0.53
7000
0.049
345.42
13126
0.55
7000
0.055
386.87
14701
0.57
7000
0.062
433.29
16465
0.58
7000
0.069
485.29
18441
0.60
7000
0.078
543.52
20654
992
0.043
1048
0.042
1107
0.040
1167
0.039
1230
0.038
1294
0.037
1,956
0.085
2046
0.082
2137
0.078
2227
0.075
2317
0.071
2404
0.068
$14,728
16201
17821
19600
21556
23704
1,738
0.075
1819
0.072
1901
0.069
1983
0.066
2063
0.063
2143
0.060
354
0.01537259
1,153
$ 3,245
$ 17,973
$ 168
591
$ 1,270
$2,029
$3,026
Exhibit 8 (continued)
Expected
December 31,
1979
Assets
Accounts receivable
Inventories
Net property, plant & equip.
Total
Liabilities
Accounts payable
Net Assets
1984
$ 1,622
651
10,600
$12,873
$ 1,328
598
10,025
$11,951
$ 1,680
756
9,440
$11,876
$ 1,976
889
8,840
$11,705
$2,136
961
8,230
$11,327
$ 2,303
1,036
7,560
$10,899
873
730
924
1,087
1,175
1,267
$12,000
$11,221
$10,952
$10,618
$10,152
$ 9,632
47.5%
62.0
19.5
81.5
6.3
10.0
4.5
5.5
84.5%
46.0%
60.4
16.2
76.6
13.2
10.0
4.5
5.5
65.2%
47.5%
60.8
14.7
75.5
15.4
10.0
4.5
5.5
53.7%
49.3%
62.3
14.1
76.4
14.7
10.0
4.5
5.5
47.5%
51.2%
64.0
14.1
78.0
13.1
10.0
4.5
5.5
41.8%
7.4%
20.3%
28.6%
30.9%
31.4%
1980
These pro forma financial statements were based on the following assumptions:
1
Though excess industry capacity would hold price increases to less than an 8% annual rate in 1980, by 1984 the average annual
price increase over the period 1979-1984 was assumed to equal 8%.
3
Depreciation would increase because Dixon would have written up the value of the Collinsville plant to $10.6 million.