13 – Net Operating Profit Margin – NOPM
2010 2011 2012 2013 2014
3.18% 3.82% 3.05% 3.37% 3.40%
14- Market Statistics
2010 2011 2012 2013 2014
Beta 1.2 1.35 1.26 1.3 1.23
Market Rate 12% 13.5% 14% 13.75% 14.25%
NRFR 8% 8.25% 7.8 8.2% 8.5%
15- Cash Conversion Cycle Matrices
Case Study Requirements
Using the data depicted,
1- Write a short statement explaining how you perceive the performance of Walgreens during
2014, and assess the management strategy in managing key performance indicators.
2- Using the following Data:
Leverage 0 25% 50% 100%
Equity
Debt
Total
EBIT@ 12%
Cost of Equity
Cost of Debt 10% 10% 10% 10%
Market Value of Debt
Market Value of Equity
Value of Walgreens
Egyptian Cultural Center
Calculate:
- Missing Data in the Table
- The Weighted Average Cost of Capital under Different Leverage Scenarios.
How do you assess Walgreens financial performance under the above statistics, and
performance measures?
Assess the best “Dividend Payment Scheme”, and explain why.
Using The Following Table, Calculate :
The Value of the Firm
The Fair Price per Share
The WACC
Comment on the results of your calculations, and suggest corrective actions if needed.
Bonus Question:
If you are the CFO of Walgreens, and you are inclining an expansion in the pharmaceutical
products, The company needs financing, and you are examining the available alternatives,
what would you suggest to compare the alternatives and on what bases would you
select the most proper financing mix for Walgreens.,
Reminder: Best Practice in Writing Up a Case Study Report
Writing a case study report involves following a few rules. These are as follows:
A case study report is not an essay: it is a call for action, to be read by the company’s
managers and executives. Thus, it is of the utmost importance to state immediately, in the
introduction, the report’s conclusion (the action to be considered). This will avoid lengthy
arguments and digression. The report should then set out the reasons for this recommendation,
rather than being written in an “investigative” mode which only identifies the solution at its
conclusion.
A written report is a means of communication: to facilitate this, it should include a table of
contents, page numbering, and all the other basic requirements of a properly formatted
document.
Finally, some pitfalls to avoid:
- A case study report should not simply paraphrase the text provided. Avoid at all costs
rewriting the case word-for-word, or copying figures, tables or graphs already included in
the case study.
- The presentation style of a document is as important as its content: both elements affect
the reader’s perception of the analysis proposed. The report should be written in a simple,
direct and concise style.
- Lastly, subjective phrases such as “it seems”, “I (we) believe”, “in my (our) opinion
”, and “it is obvious that” should be avoided.
Sources of information:
1- Lecture Handouts.
2- Economic reviews issued by world practitioners and educational houses
3- Business Journals.
4- Online articles
5- Public data available about the Company.
Guidelines:
- Show clearly your reference in accordance with the standard report writing.
- All tasks should not exceed 25Slides Tops.
- General Company Information The History of Walgreens
- The Great Depression and the Recovery
- World War II and its Effects
- 1990’s to the Present
- Walgreens’s Operations Core Business
- Manufacturing Centers and Corporate Headquarters
- Walgreens’s Mission and Strategy
- Strategic Position in the Market and Competition
- Porter’s Five Forces
- Walgreens’s SWOT Analysis Strengths
- Weaknesses
- Opportunities
- Threats
- Financial Statement 2014
- Reference Financial Information
- 1- Debt to Equity Ratio
- 3- Working Capital
- 5- Accounts Receivable Turnover
- 7- Inventory
- 9- Inventory Turnover
- 11- Dividends
- 12- Return on Equity
- 14- Market Statistics
- Case Study Requirements
- Calculate:
- Bonus Question:
- Reminder: Best Practice in Writing Up a Case Study Report