Turn in Page HW 8Name1) Using Model 1 forecast AirTrans EBITDec-.docx
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Turn in Page HW 8Name:1) Using Model 1 forecast AirTran's EBITDec-10Dec-11Dec-12Dec-13Dec-14EBIT148.092) Using Model 1 forecast AirTran's NOPATDec-10Dec-11Dec-12Dec-13Dec-14NOPAT88.853) Assuming all new debt will be issued at the end of the year determine AirTran's Interest Expense. Interest rates are on the input sheet.Dec-10Dec-11Dec-12Dec-13Dec-14Interest Expense80.834) What is AirTran's forecasted EBTDec-10Dec-11Dec-12Dec-13Dec-14EBT59.845) What is AirTran's' Forecasted EarningsDec-10Dec-11Dec-12Dec-13Dec-14Earnings38.546) Assuming a dividend payout ratio of 0.0% what is AirTran's addition to retained earnings and cumulative retained earningsDec-10Dec-11Dec-12Dec-13Dec-14addition to retained earnings30.11cumulative retained earnings(54.81)7) What are the external capital requirementsDec-10Dec-11Dec-12Dec-13Dec-14External Capital Requirements1,703.848) What is the additional funds needed?Dec-11Dec-12Dec-13Dec-14AFN9) How much of the additional funds needed are raised by: (Hint: take the difference between the two years on the balance sheet)Dec-11Dec-12Dec-13Dec-14Short - Term DebtLong -Term DebtCommon StockAFN- 0- 0- 0- 010) Use the IF function to determine whether the source of funding is a "source" or a "use". Let "1" represent source and "0" represent use. Dec-11Dec-12Dec-13Dec-14Short - Term DebtLong -Term DebtCommon Stock Turn in Page HW 7Name:1) Forecast Sales using the average growth in sales from 2007 - 2010Dec-07Dec-08Dec-09Dec-10Growth in SalesAverage Growth in Sales2) Calculate the average Accrued Expense to Sales from 2006 - 2010Average Accrued Expenses to Sales 3) List two Current Operating Liabilities from AirTran's Balance Sheet1)2)4) Using Model 1 (Historical Averages) what is AirTran's Operating Current AssetsDec-10Dec-11Dec-12Dec-13Dec-14Operating Current Assets680.305) Using Model 1 (Historical Averages) what is AirTran's Total AssetsDec-10Dec-11Dec-12Dec-13Dec-14Total Assets2,179.356) Using Model 1 (Historical Averages) what is AirTran's Spontaneous Liabilities. Include Deferred Taxes and Other Current LiabilitiesDec-10Dec-11Dec-12Dec-13Dec-14 Accounts Payable57.79 Accrued Expenses109.86 Other Current Liabilities330.25 Deferred Taxes32.41Total Spontaneous Liabilities530.327) What is AirTran's Total Net Operating Capital (Total Assets less Spontaneous Liabilities)Dec-10Dec-11Dec-12Dec-13Dec-14Total Net Operating Capital1,649.038) List 3 Items that are financing issues.9) Using Model 1 forecast the following items (The weights multiplied by Total Net Operating Capital)Dec-11Dec-12Dec-13Dec-14Short-Term debt10%Long-Term Debt65%Common Stock25%Total Required Financing Needs from investors InputsFact SheetModel 1Historical -AvgSales Growth0% Treanor, Stephen: Use the question sheet to calculate Cost of Goods Sold84%SG&A10%Depreciation and Amortization Expense2.7%Interest Rate8%Tax Rate40%Dividend Payout Ratio0%Current Operating AssetsCash / Sales18.79%Receivables / Sales1.59%Inventory / Sales1.62%Other Current Assets ...
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Turn in Page HW 8Name1) Using Model 1 forecast AirTrans EBITDec-.docx
- 1. Turn in Page HW 8Name:1) Using Model 1 forecast AirTran's EBITDec-10Dec-11Dec-12Dec-13Dec-14EBIT148.092) Using Model 1 forecast AirTran's NOPATDec-10Dec-11Dec-12Dec- 13Dec-14NOPAT88.853) Assuming all new debt will be issued at the end of the year determine AirTran's Interest Expense. Interest rates are on the input sheet.Dec-10Dec-11Dec-12Dec- 13Dec-14Interest Expense80.834) What is AirTran's forecasted EBTDec-10Dec-11Dec-12Dec-13Dec-14EBT59.845) What is AirTran's' Forecasted EarningsDec-10Dec-11Dec-12Dec-13Dec- 14Earnings38.546) Assuming a dividend payout ratio of 0.0% what is AirTran's addition to retained earnings and cumulative retained earningsDec-10Dec-11Dec-12Dec-13Dec-14addition to retained earnings30.11cumulative retained earnings(54.81)7) What are the external capital requirementsDec-10Dec-11Dec- 12Dec-13Dec-14External Capital Requirements1,703.848) What is the additional funds needed?Dec-11Dec-12Dec-13Dec- 14AFN9) How much of the additional funds needed are raised by: (Hint: take the difference between the two years on the balance sheet)Dec-11Dec-12Dec-13Dec-14Short - Term DebtLong -Term DebtCommon StockAFN- 0- 0- 0- 010) Use the IF function to determine whether the source of funding is a "source" or a "use". Let "1" represent source and "0" represent use. Dec-11Dec-12Dec-13Dec-14Short - Term DebtLong -Term DebtCommon Stock Turn in Page HW 7Name:1) Forecast Sales using the average growth in sales from 2007 - 2010Dec-07Dec-08Dec-09Dec- 10Growth in SalesAverage Growth in Sales2) Calculate the average Accrued Expense to Sales from 2006 - 2010Average Accrued Expenses to Sales 3) List two Current Operating Liabilities from AirTran's Balance Sheet1)2)4) Using Model 1 (Historical Averages) what is AirTran's Operating Current AssetsDec-10Dec-11Dec-12Dec-13Dec-14Operating Current Assets680.305) Using Model 1 (Historical Averages) what is AirTran's Total AssetsDec-10Dec-11Dec-12Dec-13Dec-14Total
- 2. Assets2,179.356) Using Model 1 (Historical Averages) what is AirTran's Spontaneous Liabilities. Include Deferred Taxes and Other Current LiabilitiesDec-10Dec-11Dec-12Dec-13Dec-14 Accounts Payable57.79 Accrued Expenses109.86 Other Current Liabilities330.25 Deferred Taxes32.41Total Spontaneous Liabilities530.327) What is AirTran's Total Net Operating Capital (Total Assets less Spontaneous Liabilities)Dec-10Dec-11Dec-12Dec-13Dec-14Total Net Operating Capital1,649.038) List 3 Items that are financing issues.9) Using Model 1 forecast the following items (The weights multiplied by Total Net Operating Capital)Dec-11Dec- 12Dec-13Dec-14Short-Term debt10%Long-Term Debt65%Common Stock25%Total Required Financing Needs from investors InputsFact SheetModel 1Historical -AvgSales Growth0% Treanor, Stephen: Use the question sheet to calculate Cost of Goods Sold84%SG&A10%Depreciation and Amortization Expense2.7%Interest Rate8%Tax Rate40%Dividend Payout Ratio0%Current Operating AssetsCash / Sales18.79%Receivables / Sales1.59%Inventory / Sales1.62%Other Current Assets / Sales2.81%Long-term operating Capital Net Plant, Property & Equipment53.77% Other Investments0.00% Intangibles1.09% Deferred Charges4.12% Other Assets3.10%Spontaneous Liabilities (Current Operating Liabilities + Deferred Taxes) Accounts Payable2.38% Accrued Expenses Treanor, Stephen: Use the question sheet to calculateDeferred Taxes0.61%Other Current Liabilities11.94%Investement Tax Credit0Capital Struture -- Based on Total Net Operating CaptialTargetDebtShort-Term 10%Long-Term Debt65%Shareholders Equity25% AirTran Balance SheetAIRTRAN HOLDINGS INCANNUAL BALANCE SHEETTICKER:AAI ($ MILLIONS)SIC:4512NAMEGICS:20302010ASSETSDec-
- 3. 06Dec-07Dec-08Dec-08Dec-10Dec-11Dec-12Dec-13Dec-14 Cash & Equivalents335.015347.610421.141596.672503.124 Net Receivables38.61342.77238.30127.06736.335 Inventories17.23647.14831.43250.47146.185 Other Current Assets26.09342.40793.53383.21394.657 Total Current Assets416.957479.937584.407757.423680.301 Net Plant, Property & Equipment1,015.2291,365.9121,282.9721,320.0391,294.020 Other Investments- 08.2305.497- 0- 0 Intangibles29.91729.91721.56721.56721.567 Deferred Charges82.73197.12598.36998.079104.439 Other Assets58.74867.34570.04887.06479.021TOTAL ASSETS1,603.5822,048.4662,062.8602,284.1722,179.348LIABI LITIESShort Term debt86.84599.671160.700282.089119.483 Accounts Payable35.05050.64481.55757.48257.793 Accrued Expenses93.335105.447104.036101.602109.860 Other Current Liabilities182.857252.372365.554285.366330.252 Total Current Liabilities398.087508.134711.847726.539617.388 Long Term Debt826.2121,062.5481,097.5581,051.484990.188 Deferred Taxes- 031.4347.4504.20632.414Total Long-term Liabilities826.2121,093.9821,105.0081,055.6901,022.602Total Liabilities1,224.2991,602.1161,816.8551,782.2291,639.990EQU ITYCommon stock389.134396.916497.510586.862594.169 Retained Earnings(9.851)49.434(251.505)(84.919)(54.811) Total Equity379.283446.350246.005501.943539.358TOTAL LIABILITIES & EQUITY1,603.5822,048.4662,062.8602,284.1722,179.348 AirTran Income SatementAIRTRAN HOLDINGS INCANNUAL INCOME STATEMENTTICKER:AAI$ MillionsSIC:4512NAMEGICS:20302010Dec-06Dec-07Dec- 08Dec-08Dec-10Dec-11Dec-12Dec-13Dec- 14Sales1,892.0832,309.9832,552.4782,341.4422,619.172 Cost of Goods Sold1,642.161,884.512,335.341,868.782,157.10Gross Profit249.925425.474217.143472.664462.077SG&A178.99239.0 6245.37241.75254.03EBITDA70.939186.411(28.227)230.91720 8.049Depreciation and Amortization
- 4. Expense30.0848.4958.6256.8759.96 Treanor, Stephen: Calculate using PP&EOperating Profit40.861137.926(86.845)174.046148.091 Interest Expense50.86175.53075.68083.96780.825 Non-Operating Expense (Income)(34.657)(35.606)118.617(40.982)(12.478)- 0- 0- 0- 0 Special Items Expense (Income)- 010.6510.75(4.28)19.907.407.407.407.40Pretax Income24.65787.352(291.892)135.33959.844 Total Income Taxes9.9434.67(18.06)0.6821.30Net Income14.71452.683(273.829)134.66238.543Dividends(24.565) 6.602(27.110)31.924(8.435)Addition to Retained Earnings(9.851)59.285(300.939)166.58630.108 Ratio AnalysisNAME20072008200820102011201220132014AirTran Price7.164.445.227.3920072008200820101900190019001900Ra tiosAirlineCurrent RatioAirtran1.0470.9450.8211.0431.102ERROR:#DIV/0!ERRO R:#DIV/0!ERROR:#DIV/0!ALK1.0021.1091.2991.167JBLU0.88 90.8901.3261.253PNCLQ1.2110.9561.1430.828LUV0.9181.031 1.2551.295Days Sales OutstandingAirtran7.4496.7585.4774.2195.064ERROR:#DIV/0! ERROR:#DIV/0!ERROR:#DIV/0!ALK14.36711.76612.00311.43 9JBLU11.8169.2658.9818.113PNCLQ14.42026.47932.51614.51 8LUV10.3276.9215.9605.880Net Fixed Asset TurnoverAirtran1.8641.6911.9901.7742.024ERROR:#DIV/0!ER ROR:#DIV/0!ERROR:#DIV/0!ALK1.1841.1431.0731.229JBLU 0.7490.7580.7100.814PNCLQ3.0831.2001.1571.092LUV0.9070. 9980.9731.144Asset TurnoverAirtran1.1801.1281.2371.0251.202ERROR:#DIV/0!ER ROR:#DIV/0!ERROR:#DIV/0!ALK0.7810.7490.6820.764JBLU 0.5080.5630.5030.573PNCLQ1.1110.7630.6560.681LUV0.5880. 7700.7250.783Debt RatioAirtran76.35%78.21%88.07%78.03%75.25%ERROR:#DIV /0!ERROR:#DIV/0!ERROR:#DIV/0!ALK77.20%86.31%82.51% 77.97%JBLU81.49%79.06%76.39%74.91%PNCLQ91.84%95.71
- 5. %92.07%92.03%LUV58.62%65.38%61.69%59.67%Times Interest EarnedAirtran0.8031.826(1.148)2.0731.832ERROR:#DIV/0!ER ROR:#DIV/0!ERROR:#DIV/0!ALK2.569(1.275)3.1044.476JBL U0.7200.4091.4391.956PNCLQ4.3321.6231.6941.741LUV6.857 3.5311.7635.940Operating Profit MarginAirtran2.16%5.97%- 3.40%7.43%5.65%ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#D IV/0!ALK6.45%- 3.60%9.18%12.65%JBLU5.70%2.77%8.66%9.31%PNCLQ6.48 %6.84%9.68%7.24%LUV8.28%4.16%3.17%8.20%Profit MarginAirtran0.78%2.28%- 10.73%5.75%1.47%ERROR:#DIV/0!ERROR:#DIV/0!ERROR:# DIV/0!ALK3.57%-3.75%3.58%6.55%JBLU0.63%- 2.24%1.85%2.57%PNCLQ4.40%- 0.57%4.95%1.25%LUV6.54%1.61%0.96%3.79%Basic Earning PowerAirtran2.55%6.73%- 4.21%7.62%6.80%ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#D IV/0!ALK5.03%- 2.70%6.26%9.66%JBLU2.89%1.56%4.35%5.34%PNCLQ7.20% 5.22%6.35%4.93%LUV4.87%3.21%2.30%6.42%ROAAirtran0.9 2%2.57%- 13.27%5.90%1.77%ERROR:#DIV/0!ERROR:#DIV/0!ERROR:# DIV/0!ALK2.78%-2.81%2.44%5.01%JBLU0.32%- 1.26%0.93%1.47%PNCLQ4.89%- 0.43%3.25%0.85%LUV3.85%1.24%0.69%2.97%ROEAirtran3.8 8%11.80%- 111.31%26.83%7.15%ERROR:#DIV/0!ERROR:#DIV/0!ERROR :#DIV/0!ALK12.21%-20.53%13.94%22.72%JBLU1.74%- 6.03%3.95%5.86%PNCLQ59.90%- 10.10%40.94%10.69%LUV9.29%3.59%1.81%7.36% Debt Ratio Airtran 2007 2008 2008 2010 0.76347763943471547 0.78210524363108791 0.88074566378716945 0.78025166230914311 0.7525140546622201 0 0 0 Profit Margin Airtran 2007 2008 2008 2010 7.7766144508460717E-3 2.2806661347724272E-2 -0.10727967097071943
- 6. 5.7512421832357996E-2 ALK 2007 2008 2008 2010 3.56531660011409E-2 -3.7538325553130955E-2 3.5766809812341899E-2 6.5522010281032272E-2 JBLU 2007 2008 2008 2010 6.3335679099225895E-3 - 2.2432113341204249E-2 1.8529769137302553E-2 2.5668166181529506E-2 PNCLQ 2007 2008 2008 2010 4.3990530548379807E-2 -5.6742427308521777E-3 4.9503966845967161E-2 1.2510200662834906E-2 LUV 2007 2008 2008 2010 6.5409187709157282E-2 1.6148054068765308E-2 9.5652173913043474E-3 3.7921348314606744E-2 ROA Airtran 2007 2008 2008 2010 9.175707883974869E-3 2.5718269182891083E-2 - 0.13274240617395269 5.8954404484425856E-2 ALK 2007 2008 2008 2010 2.7834064441425999E-2 - 2.8104061543551988E-2 2.4393179538615847E-2 5.0053821313240036E-2 JBLU 2007 2008 2008 2010 3.2154340836012861E-3 -1.2618296529968454E-2 9.3143991449076199E-3 1.471257394205976E-2 PNCLQ 2007 2008 2008 2010 4.8881719701716654E-2 - 4.3305133957332043E-3 3.2461106544027549E-2 8.5201608222055265E-3 LUV 2007 2008 2008 2010 3.8456952062962083E-2 1.2440592675426335E-2 6.9381175975891793E-3 2.9683761236500031E-2 Asset Turnover Airtran 2007 2008 2008 2010 1.1799103507023652 1.1276647989275879 1.2373491172449902 1.0250725426981855 ALKALASKA AIR GROUP INCTICKER:ALKSIC:4512GICS:20302010Selected Items from the Balance SheetDec-07Dec-08Dec-09Dec-10Cash & Short Term Investment934.71077.41192.11208.2Receivables- Total138116.7111.8120.1Inventories- Total46.651.945.845.1Current Assets- Total1390.31508.91634.31662PP&E-Total Net2962.33167.73167.93117.1Assets- Total4490.94835.649855016.6Notes Payable0000Accounts Payable101.559.663.360.2Current Liabilities-
- 7. Total13881360.61258.31424.7LT Debt- Total1124.61596.31699.21313Liabilities- Total3466.94173.74112.93911.2Common Equity- Total1024661.9872.11105.4Com Shares Outstanding76.10272.54871.18271.848Selected Items from the Income StatementCom Shares Outstanding76.10272.54871.18271.848Sales- Net35063620.33399.83832.3Cost of Goods Sold2711.53176.12522.92762.5Gross Profit794.5444.2876.91069.8EBITDA403.574.2531.2715.3Depr eciation-Amortization177.4204.6219.2230.5EBIT226.1- 130.4312484.8Interest Expense88102.3100.5108.3EBT201.6- 213.2202.9405.9Net Income (Loss)125- 135.9121.6251.1Price/Earnings- Monthly8.068@NM10.1958.087Price Close - Monthly12.50514.62517.2828.345 JBLUJETBLUE AIRWAYS CORPTICKER:JBLUSIC:4512GICS:20302010Selected Items from the Balance SheetDec-07Dec-08Dec-09Dec-10Cash & Short Term Investment8346491149963Receivables- Total92868184Inventories-Total26304049Current Assets- Total111696215341360PP&E-Total Net3794447046384641Assets-Total5598602365496593Notes Payable4312000Accounts Payable14014493104Current Liabilities-Total1256108111571085LT Debt- Total2588288329202850Liabilities- Total4562476250034939Common Equity- Total1036126115461654Com Shares Outstanding181.593271.755291.491294.687Selected Items from the Income StatementCom Shares Outstanding181.593271.755291.491294.687Sales- Net2842338832923779Cost of Goods Sold1990249622292545Gross Profit85289210631234EBITDA335296493559Depreciation- Amortization173202208207EBIT16294285352Interest Expense225230198180EBT41-76104161Net Income (Loss)18-
- 8. 766197Price/Earnings-Monthly59@NM22.70818.361Price Close - Monthly5.97.15.456.610.0991227635- 0.27966366760.20926889680.3291628066- 25.387638157926.043048360720.0812481443 PNCLQPINNACLE AIRLINES CORPTICKER:PNCLQSIC:4512GICS:20302010Selected Items from the Balance SheetDec-07Dec-08Dec-09Dec-10Cash & Short Term Investment218.96274.88694.689108.303Receivables- Total31.10762.73675.32140.602Inventories- Total16.0317.10619.47234.195Current Assets- Total294.919177.226203.396203.934PP&E-Total Net255.41720.757731.073935.138Assets- Total708.5881133.1221289.421498.798Notes Payable8.37512.352.02719.337Accounts Payable33.06229.96224.30644.389Current Liabilities- Total243.459185.415177.987246.34LT Debt- Total197.296704.342526.87667.875Liabilities- Total650.7661084.5291187.1831379.305Common Equity- Total57.82248.593102.237119.493Com Shares Outstanding17.95318.06518.33718.653Selected Items from the Income StatementCom Shares Outstanding17.95318.06518.33718.653Sales- Net787.374864.785845.5081020.767Cost of Goods Sold725.866777.909727.052907.728Gross Profit61.50886.876118.456113.039EBITDA61.50886.876118.45 6113.039Depreciation- Amortization10.46827.72136.60239.147EBIT51.0459.15581.85 473.892Interest Expense11.78336.45148.32442.433EBT51.0371.29742.23820.88 3Net Income (Loss)34.637-4.90741.85612.77Price/Earnings- Monthly9.187@NM2.95311.286Price Close - Monthly15.251.76.887.9 LUVSOUTHWEST AIRLINESTICKER:LUVSIC:4512GICS:20302010Selected Items from the Balance SheetDec-07Dec-08Dec-09Dec-10Cash
- 9. & Short Term Investment2779180325933538Receivables- Total279209169195Inventories-Total259203221243Current Assets-Total4443289333584279PP&E-Total Net10874110401063410578Assets- Total16772143081426915463Notes Payable00750Accounts Payable759668746739Current Liabilities- Total4838280626763305LT Debt- Total2050349833252875Liabilities- Total9831935588039226Common Equity- Total6941495354666237Com Shares Outstanding734.798739.993742.791747.435Selected Items from the Income StatementCom Shares Outstanding734.798739.993742.791747.435Sales- Net9861110231035012104Cost of Goods Sold7056859080699062Gross Profit2805243322813042EBITDA137110589441620Depreciatio n-Amortization555599616628EBIT816459328992Interest Expense119130186167EBT1058278164745Net Income (Loss)64517899459Price/Earnings- Monthly14.35335.91787.92320.935Price Close - Monthly12.28.6211.4312.980.8777922640.24054281590.133281 09790.614100222835.835616067485.758597272721.136615032 7 AirTran Cash Flow Act.AIRTRAN HOLDINGS INCANNUAL STATEMENT OF CASH FLOWSTICKER:AAISIC:4512GICS:2030201010-Dec9-Dec8- Dec7-Dec6-DecINDIRECT OPERATING ACTIVITIESIncome Before Extraordinary Items38.543134.662- 273.82952.68314.714Depreciation and Amortization67.88968.36364.98150.84231.7Extraordinary Items and Disc. Operations00000Deferred Taxes21.3010.677- 18.06334.4649.943Sale of Property, Plant, and Equipmentand Sale of Investments - Loss (Gain)1.061-2.914-22.356- 4.8114.387Funds from Operations - Other5.4231.1117.95913.7211.788Receivables - Decrease (Increase)-9.9218.7115.157-5.566-10.437Inventory - Decrease
- 10. (Increase)3.382-19.79715.031-30.445-3.083Accounts Payable and Accrued Liabs - Inc (Dec)Income Taxes - Accrued - Increase (Decrease)00000Other Assets and Liabilities - Net Change33.082-72.57931.21971.19126.114Operating Activities - Net Cash Flow160.76118.233- 179.901182.07975.126INVESTING ACTIVITIESInvestments - Increase00000Sale of Investments00000Short-Term Investments - Change1.69627.11688.68330.602-151.025Capital Expenditures-25.933-76.565-80.642-175.942-105.478Sale of Property, Plant, and Equipment305.96572.8795Acquisitions00000Investing Activities - Other02.22514.65-10.3480Investing Activities - Net Cash Flow-24.237-47.224328.656-82.809-251.503FINANCING ACTIVITIESSale of Common and Preferred Stock1.52556.51378.5712.37812.003Purchase of Common and Preferred Stock000Cash Dividends00000Long-Term Debt - Issuance51.837160.916107.57769.03471.045Long-Term Debt - Reduction-202.894-95.774-317.153-115.904-113.132Current Debt - Changes-753590Excess Tax Benefit from Stock Options00000Financing Activities - Other-0.645-0.1230.455- 7.005-5.011Financing Activities - Net Cash Flow- 225.177156.532-40.55-51.497-35.095Exchange Rate Effect00000Cash and Equivalents - Change- 88.654227.541108.20547.773-211.472DIRECT OPERATING ACTIVITIESInterest Paid - Net79.47977.23875.47364.39717.41Income Taxes Paid-0.332- 0.1980.33200SUPPLEMENTAL STATEMENT OF FINANCIAL POSITION