3/8/2019 BSG Decisions & Reports

Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.22 $2.50 Net Revenues ($000s) 515,891 +19.2%
ROE (return on equity) 19.6% 21.0%
Net Profit ($000s) 44,225 +10.6%
Credit Rating A– B+
Image Rating 83 70 Ending Cash ($000s) 4,901 -1,173

F C F
Sources of 1-Year Bank Loan (7.00% interest) $ 0 Uses for Early Repayment of L-T None
Additional Cash 5-Year Bank Loan (7.50% interest) $ 0 Excess Cash Loans (Balance Sheet Note 8) N/A
($000s) ($000s)
10-Year Bank Loan (8.00% interest) $ 0
Dividend ($/share) Year 10 dividend was $1.00 $ 0.50
Stock Issue (000s of shares at $30.15) 0 Stock Repurchase (000s of shares at $30.15) 100
Maximum share issue in Y11 = 0k Maximum share repurchase in Y11 = 200k

Shares of stock outstanding at the beginning of Year 11 20,000 k Shares of stock outstanding at the end of Year 11 19,900 k

Projected Cash Available in Year 11 $000s Projected Cash Outlays in Year 11 $000s
Beginning Cash Balance (carried over from Year 10) $ 6,074 Cash Payments to Materials Suppliers $ 77,984
Outlays Production Expenses (excluding depreciation) 155,598
Cash Receipts from Footwear Sales 509,248
Inflows Bank Loans 1-Year Loan 0 Distribution and Warehouse Expenses 98,340
5-Year Loan 0 Marketing and Administrative Expenses 97,523
10-Year Loan 0 Capital Facility Expansion (new space) 0
Outlays Equipment Purchases 10,000
Stock Issue (0 shares @ $30.15) 0
Sale of Used Production Equipment 0 Equipment Upgrade Options 13,600
Interest Income on Y10 Cash Balance 121 Energy Efficiency Initiatives 850
Loan to Cover Overdraft (1-year loan @ 9.0%) 0 Bank Loan 1-Year Loan 0
Repayment 5-Year Loans 0
Cash Refund (awarded by instructor) 0
10-Year Loans 15,900
Total Cash Available from All Sources $ 515,443 Interest Bank Loans 8,829
Payments Y10 Overdraft Loan 0
Stock Repurchases (100 shares @ $30.15) 3,015
Income Tax Payments 18,953
Dividend Payments to Shareholders 9,950
Charitable Contributions 0
Cash Fine (assessed by instructor) 0
Total Cash Outlays $ 510,542

If sales targets are not met, an overdraft loan is likely with this low cash balance.  Projected Cash Balance at the End of Year 11 ($000s) $ +4,901
Last Year 11 Last Year 11
Other Important Financial Statistics Year (projected) Performance on Credit Rating Measures Year (projected)

Interest Rate Paid on Overdraft Loans 9.0% 9.0% Interest Coverage Ratio (operating profit ÷ interest exp.) 6.62 8.26
Interest Rate Received on Cash Balances 2.0% 2.0% Debt to Assets Ratio (total debt ÷ total assets) 0.39 0.33
Shareholder Equity (mandated minimum = $150 mil.) $210 mil. $241 mil. Risk of Default (based on Y11 default risk ratio of 4.04) Medium Low

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