Question 2
a. NOPAT = [Operating income – (1 –Tax rate)]; Tax rate = Income tax / EBIT
b. Invested Capital = (Accounts receivable + Inventories + Prepaid expenses & other current assets) – (Current liabilities) + (Long-term investments + Equity & cost investments + Net PPE + Other assets + Other intangible assets + Goodwill)
c. Book value of interest-bearing debt = Long-term debt
d. Growth of NOPAT in the high growth state = Mean estimate
e. Reinvestment rate = Tab 1 of spreadsheet
f. Steady-state NOPAT growth: This represents the year-by-year constant growth rate of Starbucks when both the growth rates of NOPAT and NOA (net operating assets) have converged. Only minimal growth is achieved at this state.
g. Steady-state ROI = WACC (given)
h. Book value of equity per share = Book value of equity / # of shares
i. Current stock price: $51.07 (Yahoo Finance Stock Price as of date 9/21/12)
j. Number of shares outstanding (p. 44 Balance Sheet)
k. No preferred stock (given)
l. Cash, short-term investments, & non-operating assets = (Cash & cash equivalents) + (Short-term
Cited: Baertlein, Lisa. “UPDATE 4-Starbucks Cuts View, U.S. Slows; Shares Sink.” Reuters 26 Jul. 2012. Web. 22 Sep. 2012.