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CASES IN FINANCIAL STRATEGY

Professor J. Schallheim

FOR CASE BRIEFS: The answers to the following preparatory questions are not necessary or sufficient for your Case Briefs. Rather, the questions are to serve as a guide for your group discussion of the cases and a help to getting started on each case. Your final solution the case and recommendations should not necessarily be limited to the answers to these question or the assumptions in the case.

FOR INDVIDUAL ASSIGNMENTS: For individual assignments, you must answer the questions labeled “Memo.”

Individual Memo for Rapid Repair Auto Parts

Rapid Repair’s profitability appears good but their cash balance has shrunk. Write a report that provides a financial analysis and summarizes their current situation (Hint: ratios and cash flow analysis). What changes do your recommend, if any, in 2013?

Preparatory Questions for Horniman Horticulture

Horniman’s profitability appears good but their cash balance has shrunk just like the previous case. Write a report that forecasts the financial outlook for 2006 (including forecasted income statement and balance sheet). How much external funds are needed (EFN), if any, for 2006?

Preparatory Questions for Panera Bread Company

1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statements, and provide a forecast for the next 5 years. A worksheet has been provided for this purpose. As an initial (base case) analysis, assume all borrowings are some form of debt. You may also assume the share repurchase occurs in 2008 and that interest expense is equal to 6% of outstanding debt. One set of assumptions is for sales growth of 25% for the first two years after 2007 and 5% thereafter (other sales growth patterns should be explored). Perform sensitivity analysis of the important assumptions. Note that

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