Historical and Projected Financia
Ralph Lauren Corp.
Period
Income Statement
Revenues:
Total revenues
Cost of goods sold
Gross profit
Operating Expenses:
Selling, general and administrative
Equity in earnings
Non-recurring items
Unreconciled Amt.
Interest expense, net
Pre-tax income
Income taxes
Net income
Balance Sheet
Assets
Cash and equivalents
Short-term investments
Accounts receivable, net
Inventories
Other current assets
Total current assets
Fixed assets (net)
Intangibles
Goodwill
Long-term investments
Other fixed assets
Total assets
Accounts payable
Accrued expenses
Short-term debt
Other current liabilities
Total current liabilities
Long-term debt
Other liabilities
2012
2013
2014
2015
6,860
2,862
3,998
6,945
2,789
4,156
7,450
3,140
4,310
7,620
3,242
4,378
2,916
(9)
12
33
13
1,015
334
681
2,971
(10)
12
58
16
1,089
339
750
3,142
(9)
19
27
17
1,096
320
776
3,301
(11)
17
51
11
987
285
702
672
516
547
842
324
2,900
884
359
1,004
100
130
5,416
974
325
458
896
310
2,963
932
328
968
81
124
5,418
797
488
588
1,020
436
3,329
1,322
299
964
500
644
655
1,042
483
3,324
1,436
267
903
135
6,088
131
6,106
181
147
664
267
43
1,121
203
690
0
77
970
298
786
210
715
234
27
1,186
298
731
0
766
946
274
543
512
Total liabilities
Additional Fund Needed - Cumulative
(Surplus)
Shareholders' equity
Common Stock
Paid-in capital
Retained earnings
Treasury stock
Total Liabilities and Equity
1,764
1,633
2,054
2,215
0
0
0
0
3,653
198
1,624
4,042
(2,212)
3,785
95
1,752
4,647
(2,709)
4,034
115
1,979
5,257
(3,317)
3,891
(164)
2,117
5,787
(3,849)
6,088
6,106
5,416
5,418
The first step in computing FCF is to restate do a Pen
That means to break the BS down into Net operating
stakeholder claims.
Note that assets are treated as a negative (since they
and equity are treated as positive (since they represe
Total assets
Less non operating assets
Marketable securities (short term
Investment)
Operating liabilities
Accounts payable
Accruals
Short term debt
Other Current liabilities
Other non current liabilities
Net operating assets
Non operating assets
Book value of the firm
Additional Fund Needed - Cumulative
(Surplus)
Long term debt
Common stock
Paid In capital
Retained earnings
Accumulated other(treasury sock)
(5,416)
516
(5,418)
325
(6,088)
488
(6,106)
644
181
0
0
766
543
(3,411)
147
664
267
43
512
(3,460)
203
690
0
77
786
(3,844)
210
715
234
27
731
(3,545)
(516)
(325)
(488)
(644)
(3,927)
(3,785)
(4,332)
(4,189)
0
0
0
0
274
198
1,624
4,042
(2,212)
0
95
1,752
4,647
(2,709)
298
115
1,979
5,257
(3,317)
298
(164)
2,117
5,787
(3,849)
Stakeholder claims
Total
Changes
3,927
3,785
4,332
4,189
0
0
0
0
The next step is to compute changes by subtracting o
(2)
(670)
(18)
(191)
163
156
(34)
664
267
(723)
(31)
(49)
56
26
(267)
34
274
(384)
7
25
234
(50)
(55)
299
Non operating assets
191
(163)
(156)
Book value of the firm
142
(547)
143
0
(274)
(103)
128
605
(497)
(142)
0
298
20
227
610
(608)
547
0
0
(279)
138
530
(532)
(143)
(0)
0
0
Total assets
Less non operating assets
Marketable securities (short term
Investment)
Operating liabilities
Accounts payable
Accruals
Short term debt
Other Current liabilities
Other non current liabilities
Net operating assets
Additional Fund Needed
Long term debt
Common stock
Paid In capital
Retained earnings
Accumulated other(treasury sock)
Stakeholder claims
Total
Computation of FCF
The final step is to use those change numbers to com
Net Income
Add back interest expense
Less tax on Interest expense
NOPAT
(Additions to Net operating assets)
FCF
750
16
(6)
760
(49)
711
776
17
(7)
786
(384)
402
702
11
(4)
709
299
1,008
Additional Fund Needed (Surplus)
(Pay off for long term debt)
0
(274)
0
298
0
0
Additional common stock
isssued/(Shares repurchased)
Additional Paid in capital
(Dividends paid)
(Interest paid net off tax)
(Increase) in non-operating assets
Increase/(Decrease) in accumulated
other
Dispositions of FCF
Total
(103)
128
(145)
(10)
191
20
227
(166)
(10)
(163)
(279)
138
(172)
(7)
(156)
(497)
(711)
(608)
(402)
(532)
(1,008)
0
0
0
Positive means source of cash and negative represen
ed Financial Statements
uren Corp.
2016
2017
2018
2019
2020
2021
7,405
3,218
4,187
7,553
3,282
4,271
7,704
3,348
4,356
7,858
3,415
4,443
8,015
3,483
4,532
8,176
3,553
4,623
3,389
(11)
192
28
15
552
156
396
3,457
(11)
0
3,526
(11)
0
3,596
(11)
0
3,668
(11)
0
3,742
(11)
0
15
788
315
473
15
804
322
483
15
821
328
493
15
838
335
503
15
855
342
513
456
629
517
1,125
326
3,053
1,583
244
918
296
6,213
465
629
527
1,148
333
3,101
1,615
249
936
0
302
6,203
474
629
538
1,170
339
3,164
1,647
254
955
0
308
6,327
484
629
549
1,194
346
3,227
1,680
259
974
0
314
6,454
494
629
560
1,218
353
3,291
1,713
264
994
0
320
6,583
503
629
571
1,242
360
3,357
1,748
269
1,014
0
327
6,715
151
898
116
33
1,198
597
674
154
916
116
34
1,220
597
687
157
934
116
34
1,242
597
701
160
953
116
35
1,264
597
715
163
972
116
36
1,287
597
730
167
991
116
36
1,311
597
744
2,469
2,504
2,540
2,576
2,614
2,652
0
(350)
(576)
(810)
(1,053)
(1,305)
3,744
(180)
2,258
6,015
(4,349)
4,049
(180)
2,258
6,320
(4,349)
4,363
(180)
2,258
6,634
(4,349)
4,688
(180)
2,258
6,959
(4,349)
5,022
(180)
2,258
7,293
(4,349)
5,368
(180)
2,258
7,639
(4,349)
6,213
6,203
6,327
6,454
6,583
6,715
(6,583)
(6,715)
o restate do a Penman restatement of the Balance Sheet
nto Net operating assets, non-operating assets, and
gative (since they represent a use of cash), and liabilities
since they represent a source of cash).
(6,213)
629
(6,203)
629
(6,327)
629
(6,454)
629
629
629
151
898
116
33
674
(3,712)
154
916
116
34
687
(3,667)
157
934
116
34
701
(3,755)
160
953
116
35
715
(3,845)
163
972
116
36
730
(3,937)
167
991
116
36
744
(4,031)
(629)
(629)
(629)
(629)
(629)
(629)
(4,341)
(4,296)
(4,384)
(4,474)
(4,566)
(4,660)
(350)
597
(180)
2,258
6,320
(4,349)
(576)
597
(180)
2,258
6,634
(4,349)
(810)
597
(180)
2,258
6,959
(4,349)
(1,053)
597
(180)
2,258
7,293
(4,349)
(1,305)
597
(180)
2,258
7,639
(4,349)
0
597
(180)
2,258
6,015
(4,349)
4,341
4,296
4,384
4,474
4,566
4,660
0
0
0
0
0
0
s by subtracting out the balances from the previous year.
(107)
10
(124)
(127)
(129)
(132)
(15)
0
0
0
0
0
(59)
183
(118)
6
(57)
(167)
3
18
0
1
13
45
3
18
0
1
14
(88)
3
19
0
1
14
(90)
3
19
0
1
14
(92)
3
19
0
1
15
(94)
15
0
0
0
0
0
(152)
45
(88)
(90)
(92)
(94)
0
299
(16)
141
228
(500)
152
(350)
0
0
0
305
0
(45)
(226)
0
0
0
315
0
88
(234)
0
0
0
325
0
90
(243)
0
0
0
335
0
92
(251)
0
0
0
345
0
94
0
0
(0)
0
0
0
e numbers to compute FCF and the Disposition of FCF.
396
15
(6)
405
(167)
238
473
15
(6)
482
45
527
483
15
(6)
492
(88)
403
493
15
(6)
502
(90)
411
503
15
(6)
512
(92)
420
513
15
(6)
522
(94)
428
0
299
(350)
0
(226)
0
(234)
0
(243)
0
(251)
0
(16)
141
(168)
(9)
15
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
0
0
(168)
(9)
0
(500)
(238)
0
(527)
0
(403)
0
(411)
0
(420)
0
(428)
0
0
(0)
0
negative represents a disposition, or distribution of cash.
0
(0)
https://finance.yahoo.com/quote/RL?ltr=1
(Data has been taken from this site)
Calculation of WACC
Beta
Risk-free Rate
Market risk premium
Cost of Equity
Weight of Equity
0.62
0.02
0.08
0.0696
0.8827
Cost of debt
Weight of debt
Tax Rate
0.06144
Hence, WACC
0.03
0.1173 (Weights were based on book values, and shou
0.4 (We have assumed 40% tax all over)
0.0021107
0.06355
Calculation of Horizon Value
FCF 2021
Growth
FCF 2022
WACC
Growth
HV 2021
428.39
0.02 (We have assumed 2% growth all over)
436.957
0.06355
0.02
10033.6
Calculation of Value of the Firm
Year
FCF
PViF
2017
2018
2019
2020
2021
HV
527
403
411
420
428
10034
0.940
0.884
0.831
0.782
0.735
0.735
Total value of the firm
Less Debt
Value of Equity
No. of Shares
Value per Share
Market value per share
PVCF
495 M
357
342
328
315
7,373
9,210
(713)
8,497
48
176.40
111.92
M
M
M
M
book values, and should have been based on market values)
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