Calculate relative valuation measures

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Reference no: EM133291105

Below are the actual financial statements of Jollibee Foods Corp. from 2000 - 2005. do a forecast of 2006-2007 income statements and balance sheets, following the guide below:

1. Form your own assumption about the total number of new stores for 2006 and 2007. There's no need to break these down into the different brands.

2. Assume the changes in average sales per store for 2006 and 2007.

3. Multiply average total stores by average sales per store for years 2006 and 2007 to give you your systemwide sales forecasts.

4. Using available information below the income statement on this sheet, break down systemwide sales into sales from company-owned stores and franchise sales.

Sales from company owned stores should then appear as sales in Jollibee's income statement.

5. Using information below the income statement on this sheet, forecast royalties, franchise fees and others as a per centage of franchise sales.

6. Cost of sales and operating expenses may be forecasted as a percentage of sales.

7. Provision for income tax may be forecasted using the historical percentage to income before income tax.

8. Maintain other income (charges)and minority interest

9. Forecast Accounts receivable, Inventories & Accounts payable by maintaining days' receivables, Days' inventories &

Days' payables

10. Assume the same change in gross PPE as 2005. Forecast Depreciation as a percentage of gross PPE

11. Maintain 2005 level of prepaid items, other noncurrent assets, accrued expenses, other liabilities, current portion of long-term debt, and non-current liabilities.

12. Retained earnings or equity is forecasted by adding forecasted net income to last year's RE or equity and deducting forecasted cash dividends. For equity, this applies only when there is no forecasted sale of new shares.

13. Increase minority interest in the balance sheet by amount in the income statement.

14. Ensure that ASSETS = LIABILITIES + STOCKHOLDERS' EQUITY by using a "plug", which is usually either cash or debt.

Do a financial ratio analysis using the table of financial ratios below.

Calculate earnings per share, book value per share, dividend payout and dividend yield.

Calculate Relative Valuation measures, i.e., PE and Price-to-book, assuming a price for Jollibee of P34. Would you recommend to buy Jollibee shares?

Reference no: EM133291105

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