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JM Smucker Processed & Packaged Goods

JM Smucker Processed & Packaged Goods. Connor Myers. “With a name like Smucker’s , it has to be good”. Background. Founded in 1897 Headquartered in Orrville, Ohio Various Product lines including Jams, Peanut Butter, Crisco and Coffee. Comparable Companies (Processed & Packaged Goods).

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JM Smucker Processed & Packaged Goods

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  1. JM SmuckerProcessed & Packaged Goods Connor Myers

  2. “With a name like Smucker’s, it has to be good”

  3. Background • Founded in 1897 • Headquartered in Orrville, Ohio • Various Product lines including Jams, Peanut Butter, Crisco and Coffee

  4. Comparable Companies (Processed & Packaged Goods) • Starbucks (SBUX) • Green Mountain Coffee (GMCR) • Mondelez (MDLZ)

  5. RNEA Formula EPAT RNEA = ____________ average NEA -use average NEA because we are not sure of actual timing of investments

  6. RNEA Calculation • For JM Smucker 2013: $603,042 RNEA = ____________ ($7,028,154 + $7,114,737)/2 RNEA 2013 = 8.53%

  7. JM Smucker’s Past RNEA

  8. RNEA of Comparables

  9. Breaking Apart RNEA EPAT Sales RNEA = ______ * _________ Sales avg(NEA) (EPM) (EATO)

  10. Enterprise Profit Margin • EPM = EPAT / Sales • Profit generated by each dollar of sales • General measure of profitability of company

  11. Enterprise Asset Turnover • EATO = Sales / avg(NEA) • Indicates the sales generated by each dollar of NEA • General measure of efficiency of the company

  12. Breaking Apart RNEA EPAT Sales RNEA = ______ * _________ Sales avg(NEA) $603,042 5,897,700 RNEA =________ * __________ 5,897,700($7,028,154 + $7,114,737)/2 10.23% * .834 RNEA = 8.53%

  13. JM Smucker’s EPM

  14. JM Smucker’s EATO

  15. EPM and EATO of Comparables

  16. Parsimonious - Revenues Assume: 6.5%

  17. Parsimonious – EPM Assume: 10%

  18. EATO of Comparables Assume: .80

  19. Parsimonious Assumptions

  20. Parsimonious Assumptions

  21. Parsimonious Assumptions

  22. Parsimonious Assumptions

  23. Questions?

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