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  • New Heritage Dool

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    Vidya Sagar Kona
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    This document provides financial information for MMDC from 2010 to 2020 including revenue, production costs, operating expenses, operating profit, working capital assumptions and net working capital accounts. Key points are: - Revenue grew from $4.5 million in 2011 to $28.7 million in 2020, with annual growth rates between 8-52.4% - Total operating expenses increased from $1.25 million in 2010 to $24.97 million in 2020 as production costs and SG&A expenses rose with increased production - Operating profit increased from a loss of $1.25 million in 2010 to a profit of $3.72 million in 2020 as revenues grew faster than expenses - Net working capital also increased over

    Original Description:

    Complete solution of New Heritage Doll Inc, Harvard Case

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    This document provides financial information for MMDC from 2010 to 2020 including revenue, production costs, operating expenses, operating profit, working capital assumptions and net working capital accounts. Key points are: - Revenue grew from $4.5 million in 2011 to $28.7 million in 2020, with annual growth rates between 8-52.4% - Total operating expenses increased from $1.25 million in 2010 to $24.97 million in 2020 as production costs and SG&A expenses rose with increased production - Operating profit increased from a loss of $1.25 million in 2010 to a profit of $3.72 million in 2020 as revenues grew faster than expenses - Net working capital also increased over

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
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    Download as xls, pdf, or txt
    132 views9 pages

    New Heritage Dool

    Uploaded by

    Vidya Sagar Kona
    This document provides financial information for MMDC from 2010 to 2020 including revenue, production costs, operating expenses, operating profit, working capital assumptions and net working capital accounts. Key points are: - Revenue grew from $4.5 million in 2011 to $28.7 million in 2020, with annual growth rates between 8-52.4% - Total operating expenses increased from $1.25 million in 2010 to $24.97 million in 2020 as production costs and SG&A expenses rose with increased production - Operating profit increased from a loss of $1.25 million in 2010 to a profit of $3.72 million in 2020 as revenues grew faster than expenses - Net working capital also increased over

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 9

    MMDC

    Revenue
    Revenue Growth
    Production Costs
    Fixed Production Expense (excl
    depreciation)
    Variable Production Costs
    Depreciation
    Total Production Costs
    Selling, General & Administrative

    2010

    2011
    $4,500
    NA
    575

    0
    1,250

    2,035
    152
    2,762
    1,155

    Total Operating Expenses

    $1,250

    $3,917

    Operating Profit
    Working Capital Assumptions:

    ($1,250)

    $583

    Minimum Cash Balance as % of Sales

    NA

    3.00%

    Day Sales Outstanding


    Inventory Turnover (prod. cost/ending
    inv.)

    NA
    NA

    59.2X
    7.7X

    Days Payable Outstanding (based on


    tot. op. exp.)
    Capital Expenditures
    Growth in capex
    Net Working Capital Accounts

    0.0X

    30.8X

    $1,470

    $952
    -35.20%
    2011

    Cash
    Accounts Receivable
    Inventory
    Account Payable
    Net Working Capital
    NWC
    NWC/Sales

    2010

    800

    135
    730
    359
    318
    906
    106
    0.202

    2012
    $6,860
    52.40%

    2013
    $8,409
    22.60%

    2014
    $9,082
    8.00%

    2015
    $9,808
    8.00%

    2016
    $10,593
    8.00%

    575

    587

    598

    610

    622

    3,404
    152
    4,131
    1,735

    4,291
    152
    5,029
    2,102

    4,669
    152
    5,419
    2,270

    5,078
    164
    5,853
    2,452

    5,521
    178
    6,321
    2,648

    $5,866

    $7,132

    $7,690

    $8,305

    $8,969

    $994

    $1,277

    $1,392

    $1,503

    $1,623

    3.00%

    3.00%

    3.00%

    3.00%

    3.00%

    59.2X
    8.3X

    59.2X
    12.7X

    59.2X
    12.7X

    59.2X
    12.7X

    59.2X
    12.7X

    30.9X

    31.0X

    31.0X

    31.0X

    31.0X

    $152
    -84.00%
    2012

    $152
    0.00%
    2013

    $334
    119.30%
    2014

    $361
    8.00%
    2015

    $389
    8.00%
    2016

    206
    1112
    500
    484
    1334
    427
    0.195

    252
    1363
    396
    593
    1418
    84
    0.169

    272
    1472
    427
    640
    1531
    113
    0.169

    294
    1590
    461
    692
    1653
    122
    0.169

    318
    1717
    498
    747
    1786
    132
    0.169

    2017
    $11,440
    8.00%

    2018
    $12,355
    8.00%

    2019
    $13,344
    8.00%

    2020
    $14,411
    8.00%

    635

    648

    660

    674

    6,000
    192
    6,827
    2,860

    6,519
    207
    7,373
    3,089

    7,079
    224
    7,963
    3,336

    7,685
    242
    8,600
    3,603

    $9,687

    $10,462

    $11,299

    $12,203

    $1,753

    $1,893

    $2,045

    $2,209

    3.00%

    3.00%

    3.00%

    3.00%

    59.2X
    12.7X

    59.2X
    12.7X

    59.2X
    12.7X

    59.2X
    12.7X

    31.0X

    31.0X

    31.0X

    31.0X

    $421
    8.00%
    2017

    $454
    8.00%
    2018

    $491
    8.00%
    2019

    $530
    8.00%
    2020

    343
    1855
    538
    807
    1929
    143
    0.169

    371
    2003
    581
    871
    2083
    154
    0.169

    400
    2163
    627
    941
    2250
    167
    0.169

    432
    2336
    677
    1016
    2429
    180
    0.169

    NPV Analysis MMDC


    Free Cash Flows

    2010

    2011

    2012

    2013

    EBIT (1-t)

    -750

    350

    596

    766

    plus depreciation

    152

    152

    152

    less NWC

    -107

    -427

    -84

    less capital expenditures

    -952

    -152

    -152

    -557

    169

    682

    0.9225

    0.851

    0.7851

    Present value

    -3,020

    -514

    144

    536

    Net Present Value

    $7,150

    NPV without Terminal Value

    ($146)
    2010

    2011

    2012

    2013

    Cash Flows

    -3,020

    -557

    169

    682

    IRR

    24.00%
    2010

    2011

    2012

    2013

    Cash flows

    -3,020

    -557

    169

    682

    Cumulative cash flow

    -3,020

    -3,577

    -3,408

    -2,726

    Free Cash Flow


    Terminal value

    -750
    3.00 %

    Initial Outlays
    Net working capital

    -800

    Net property, plant & equipment

    -1470

    Discount factor

    IRR Analysis

    Payback Analysis

    8.40 %

    Payback period
    5-year Cumulative EBITDA
    Profitability Index
    NPV/Initial Investment

    2.37

    2014

    2015

    2016

    2017

    2018

    2019

    2020

    835

    902

    974

    1,052

    1,136

    1,227

    1,325

    152

    164

    178

    192

    207

    224

    242

    -113

    -122

    -132

    -143

    -154

    -167

    -180

    -334

    -361

    -389

    -421

    -454

    -491

    -530

    541

    583

    630

    680

    735

    793

    857
    16,345

    0.7242

    0.6681

    0.6163

    0.5686

    0.5245

    0.4839

    0.4464

    392

    390

    388

    387

    385

    384

    7679

    2014

    2015

    2016

    2017

    2018

    2019

    2020

    541

    583

    630

    680

    735

    793

    17,202

    2014

    2015

    2016

    2017

    2018

    2019

    2020

    541

    583

    630

    680

    735

    793

    17,202

    -2,185

    -1,602

    -972

    -291

    443
    7.4

    $6,522

    years

    DYOD

    2010

    Revenue

    2011

    2012

    2013

    2014

    $0

    $6,000

    $14,360

    $20,222

    NA

    139.30%

    40.80%

    1,650

    1,683

    1,717

    Revenue Growth
    Production Costs
    Fixed Production Expense (excl
    depreciation)

    Additional Development Costs (IT


    Personnel)

    435

    Variable Production Costs

    2,250

    7,651

    11,427

    Depreciation

    310

    310

    310

    435

    4,210

    9,644

    13,454

    1,201

    1,240

    2,922

    4,044

    Total Operating Expenses

    $1,201

    $435

    $5,450

    $12,566

    $17,498

    Operating Profit

    ($1,201)

    ($435)

    $550

    $1,794

    $2,724

    Minimum Cash Balance as % of Sales

    NA

    NA

    3.00%

    3.00%

    3.00%

    Day Sales Outstanding

    NA

    NA

    59.2X

    59.2X

    59.2X

    Inventory Turnover (prod. cost/ending


    inv.)

    NA

    NA

    12.2X

    12.3X

    12.6X

    Days Payable Outstanding (based on


    tot. op. exp.)

    NA

    NA

    33.7X

    33.8X

    33.9X

    $4,610

    $0

    $310

    $310

    $2,192

    0%

    608%

    Total Production Costs


    Selling, General & Administrative

    Working Capital Assumptions:

    Capital Expenditures
    Growth in capex
    Net Working Capital Accounts

    2011

    2012

    2013

    2014

    180

    431

    607

    Accounts Receivable

    973

    2328

    3278

    Inventory

    346

    786

    1065

    Account Payable

    474

    1135

    1598

    Cash

    2010

    Net Working Capital

    1,000

    1,024

    2,410

    3,352

    NWC

    1,000

    24

    1,386

    942

    0.171

    0.168

    0.166

    NWC/Sales

    2015

    2016

    2017

    2018

    2019

    2020

    $21,435

    $22,721

    $24,084

    $25,529

    $27,061

    $28,685

    6.00%

    6.00%

    6.00%

    6.00%

    6.00%

    6.00%

    1,751

    1,786

    1,822

    1,858

    1,895

    1,933

    12,182

    12,983

    13,833

    14,736

    15,694

    16,712

    436

    462

    490

    520

    551

    584

    14,369

    15,231

    16,145

    17,113

    18,140

    19,229

    4,287

    4,544

    4,817

    5,106

    5,412

    5,737

    $18,656

    $19,775

    $20,962

    $22,219

    $23,553

    $24,966

    $2,779

    $2,946

    $3,123

    $3,310

    $3,508

    $3,719

    3.00%

    3.00%

    3.00%

    3.00%

    3.00%

    3.00%

    59.2X

    59.2X

    59.2X

    59.2X

    59.2X

    59.2X

    12.7X

    12.7X

    12.7X

    12.7X

    12.7X

    12.7X

    33.9X

    33.9X

    33.9X

    33.9X

    33.9X

    33.9X

    $826

    $875

    $928

    $983

    $1,043

    $1,105

    -62%

    6%

    6%

    6%

    6%

    6%

    2015

    2016

    2017

    2018

    2019

    2020

    643

    682

    723

    766

    812

    861

    3475

    3683

    3904

    4139

    4387

    4650

    1130

    1197

    1269

    1345

    1426

    1512

    1694

    1796

    1904

    2018

    2139

    2267

    3,553

    3,766

    3,992

    4,232

    4,486

    4,755

    202

    213

    226

    240

    254

    269

    0.166

    0.166

    0.166

    0.166

    0.166

    0.166

    NPV Analysis DYOD


    Free Cash Flows

    2010

    2011

    2012

    2013

    2014

    EBIT (1-t)

    -721

    -261

    330

    1,077

    1,634

    310

    310

    310

    -1,000

    -24

    -1,386

    -942

    plus depreciation
    less NWC
    less capital expenditures

    -4,610

    -310

    -310

    -2,192

    Free Cash Flow

    -5,331

    -1,261

    306

    -309

    -1,190

    Terminal value
    3.00 %
    Discount factor
    9.00 %
    Present value

    0.9174

    0.8417

    0.7722

    0.7084

    -5,331

    -1,157

    258

    -239

    -843

    -1,261

    306

    -309

    -1,190

    2010

    2011

    2012

    2013

    2014

    Cash flows

    -5,331

    -1,261

    306

    -309

    -1,190

    Cumulative cash flow

    -5,331

    -6,592

    -6,286

    -6,595

    -7,784

    Net Present Value

    $7,058

    NPV without Terminal Value

    ($3,391)

    IRR Analysis
    Cash Flows

    -5,331

    IRR

    17.90%

    Payback Analysis

    Payback period
    5-year Cumulative EBITDA
    Profitability Index
    NPV/Initial Investment

    1.32

    2015

    2016

    2017

    2018

    2019

    2020

    1,667

    1,767

    1,874

    1,986

    2,105

    2,231

    436

    462

    490

    520

    551

    584

    -202

    -213

    -226

    -240

    -254

    -269

    -826

    -875

    -928

    -983

    -1,043

    -1,105

    1,076

    1,141

    1,210

    1,283

    1,359

    1,441
    24,737

    0.6499

    0.5963

    0.547

    0.5019

    0.4604

    0.4224

    700

    681

    662

    644

    626

    11,058

    1,076

    1,141

    1,210

    1,283

    1,359

    26,178

    2015

    2016

    2017

    2018

    2019

    2020

    1,076

    1,141

    1,210

    1,283

    1,359

    26,178

    -6,708

    -5,566

    -4,357

    -3,074

    -1,715

    24,464
    >10 years

    $8,778

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