Accounting Case Analysis

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Free Cash Flow = Operating Cashflow - Capital Expenditures = Net Income + Depreciation & Amortization - Changes in Workin GMCR PEET CARIBOU 22.3 8.4 -30.7 18.3 12.9 34.4 -48.3 -1.1 7.9 79.2 38.3 -10.2 30.9 37.2 -2.3 152.1 63.2 26.6 72.9 24.9 36.8 87.9 59.3 29.9 57 22.1 32.2 48.7 30.8 17.2 40.2 -8.4 -21.4

Net Income Depreciation & Amortization Changes in Working Capital Working Capital - Latest Working Capital - Prior Year Current Assets - Latest Current Liabilities - Latest Current Assets - Prior Year Current Liabilities - Prior Year Capital Expenditures Free Cash Flow

ROIC = Net Operating Profit / Total Invested Capital =((1 - Tax Rate) * Interest Expense + Net income)/(Long Term De GMCR PEET 0.39 No Data 6.3 22.3 145.2 139.5 9.18% CARIBOU No Data

Tax Rate Interest Expense Net Income Long Term Debt & other liabilities Total Equity Return on Invested Capital (ROIC)

WACC = rD (1- Tc )*( D / V )+ rE *( E / V ) Cost of Debt Tax Rate Total Debt Cost of Equity Total Equity Total Market Value Risk Free Rate Historical Market Return Beta WACC rD Tc D rE E V rF rM B Interest Expense / (Total Debt) Avg tax rate for 2008 per Exhibit 9B Short Term + Long Term Debt Total Equity per from Exhibit 7 Total Market Value from Exhibit 7 Source : ustreasury.gov Avg Annualized market Return S&P 500 From Yahoo Finance

Financial Ratios GMCR Performance Measure Return on Capital (ROC) Return on Assets (ROA) Efficiency Measures Asset Turnover 1.399049 Operating Profit Margin 5.23% Leverage Measures Long Term Debt to Equity ratio 0.885305 Debt ratio (Total Long Term Debt / Total Assets) 0.345358 Liquidity Measures Current ratio 2.08642 + + + + + 9.94% 7.31% + + CARIBOU Indicates

ROC is much higher than WACC ROA is far better than peers. RO

Every $ spent on total assets am Higher compared to peers. Peer

GMCR leverages debt to a lesse GMCR has way more assets tha

GMCR has good amount of liqu

mortization - Changes in Working Capital - Capital Expenditures...
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