Forecast Assumptions

Terminal growth rate 3.50%

Cost of capital used 12.10%
Corporate tax rate 40%
Corporate Expenses 5%
Store segment growt rates used are the average of all stores for respective age.

Teuer Furniture Income Statement, 2004–2012 ($ in thousands)

2012 2013 2014 2015 2016 2017 2018 2019
Sales 148,218
Cost of goods sold 61,955
Gross Margin 86,263
Selling, general, and
21,253
administrative
Advertising 10,744
Depreciation 1,450
Lease 9,320
Corporate expense 7,411
EBIT 36,085
Taxes 14,434
Net income 21,651

Corporate tax rate 40%

Corporate Expenses 5%

Teuer Furniture Balance Sheet, 2003–2012 ($ in thousands)

2012
ASSETS
Accounts
48,200
receivable
Inventory 33,343
Total current assets 81,543
PPE 3,920
Total assets 85,463
LIABILITIES AND EQUITY
Accounts payable 11,364
Accrued
1,682
expenses
Total current liabilities 13,046
Debt 0
Equity 72,417
Total liabilities and
85,463
equity
Particular 2012 2013 2014 2015 2016 2017 2018
Sales 148,218
– Costs -112,132
– Taxes -14,434
Net income 21,651
– Capital expenditure -2,229
+ Depreciation 1,450
– Increase in NWC -8,365
Cash flow assets 12,508

Discount factor
PV
Terminal Value
Asset Value
Share Value
 Forecast Assumptions
Terminal growth rate 3.50%
Cost of capital used 12.10%
Corporate tax rate 40%
Corporate Expenses 5%
Shareholders (#) 187
Shares Outstanding 9945
Store segment growt rates used are the average of all stores for respective age.

Teuer Furniture Proforma Income Statement, 2012–2019

Years 2012 2013 2014 2015 2016
Sales 148,218 164,987 181,865 199,509 217,418
11.0% 11.3% 10.2% 9.7% 9.0%
Cost of goods sold (61,955) (69,792) (76,921) (84,014) (90,425)
Selling, general, and
(21,253) (21,372) (23,550) (25,735) (27,770)
administrative
Advertising (10,744) (12,235) (13,458) (14,728) (15,973)
Depreciation (1,450) (1,084) (1,373) (1,959) (2,631)
Lease (9,320) (10,561) (11,548) (12,307) (13,032)
Corporate expense (7,411) (8,249) (9,093) (9,975) (10,871)
Taxes (14,434) (16,677) (18,369) (20,316) (22,686)
Net income 21,651 25,016 27,553 30,474 34,030

Teuer Furniture Proforma Balance Sheet, 2013–2018

Years 2012 2013 2014 2015 2016
ASSETS
Accounts receivable 48,200 53,456 58,924 64,641 70,444
Inventory 33,343 36,322 39,389 42,181 44,131
Total current assets 81,543 89,778 98,313 106,822 114,575
PPE 3,920 5,203 7,155 9,310 7,440
Total assets 85,463 94,981 105,468 116,132 122,015
LIABILITIES AND EQUITY
Accounts payable 11,364 12,538 13,694 14,739 15,454
Accrued expenses 1,682 1,776 1,942 2,100 2,219
Total current liabilities 13,046 14,314 15,636 16,839 17,673
Debt - - - - -
Equity 72,417 80,958 90,434 100,154 105,339
Total liabilities and equity 85,463 95,272 106,070 116,993 123,012

Teuer Furniture Proforma Cash flow, 2013–2018

Particular 2012 2013 2014 2015 2016
Sales 148,218 164,987 181,865 199,509 217,418
– Costs (112,133) (123,293) (135,943) (148,718) (160,702)
– Taxes (14,434) (16,677) (18,369) (20,316) (22,686)
Net income 21,651 25,016 27,553 30,474 34,030
– Capital expenditure (2,229) (2,367) (3,325) (4,114) (761)
+ Depreciation 1,450 1,084 1,373 1,959 2,631
– Increase in NWC (8,365) (7,258) (7,523) (7,566) (7,055)
Cash flow assets FCFF 12,507 16,475 18,078 20,753 28,845
Period 1 2 3 4
Discount factor 0.892 0.796 0.710 0.633
Present Value $ 14,697 $ 14,386 $ 14,732 $ 18,266
Net Present Value of Explicit
Note: $101,227 is the net present value of 2013 to 2018
Forecasted Period $ 101,227

Note: Terminal value calculation (at the end of 2018) using the Perpetuity Growth Method
Terminal Value
$ 466,319 Perpetuity Growth Method the Terminal Value will be $466,319.

Present Value of Terminal

$415,985
Value

Share Price Calculation

Net Present Value of Explicit
Forecasted Period $ 101,227
Present Value of Terminal Value $ 415,985
Total Asset Value $ 517,212
Less Debts $ -
Add Cash flow assets FCFF of
2018 $ 38,747
Equity Value $ 555,960
Per Share Price $ 56
2–2019
2017 2018 2019
231,340 242,103 250,865
6.4% 4.7% 3.6%
(94,808) (97,521) (99,593)
(29,377) (30,531) (31,413)
(16,852) (17,517) (18,062)
(2,559) (2,178) (1,828)
(13,230) (13,497) (13,895)
(11,567) (12,105) (12,543)
(25,179) (27,502) (29,412)
37,768 41,252 44,118

2017 2018

74,954 78,441
45,359 46,302
120,313 124,744
5,378 3,816
125,691 128,560

15,896 16,234
2,306 2,375
18,202 18,609
- -
108,550 111,056
126,752 129,665

2017 2018
231,340 242,103
(168,393) (173,349)
(25,179) (27,502)
37,768 41,252
(322) (616)
2,559 2,178
(5,273) (4,067)
34,732 38,747
5 6
0.565 0.504
$ 19,620 $ 19,526
ent value of 2013 to 2018

using the Perpetuity Growth Method. Using the

minal Value will be $466,319.