Teuer Furniture Case Pptx

Teuer Furniture (A) Group 5 Rajesh – PGP/19/037 Sakshi – PGP/19/166 Arun – PGP/19/193 Novi – PGP/19/212

Case facts         

Seller of high quality designer furniture Concentrated on second-tier cities Plan to open 6 showrooms in three years Target market is upper-income individuals High inventory holding (48% of COGS) Showrooms were leased Majority of capital expenditure was on building interiors No. of shareholders – 187, shares outstanding – 9,945,000 Long-term investors looking for an exit 

Decision pending on whether investor buyout should be by cash from operations or through equity

Assumptions         

Sales growth for ages 7 and beyond are combined into one average COGS, SG&A and advertising – as a percentage of sales A/R – as a percentage of sales of that year Inventory, A/P – as a percentage of COGS of next year Depreciation was taken to be straight-line for 5 years Lease increased at a rate of 2% per year Corporate expenses was 5% of sales Constant tax rate of 40% WACC of 12.1%, long term growth rate is 3.5%

Excel output and results

 

Enterprise value = $328,126,000 Per share value = $32.99

Microsoft Excel Worksheet

Thank You!