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Module 4: Parsimonious. Brian Phelan. Agenda. Sales growth rate Enterprise profit m argin (EPM) Enterprise asset turnover (EATO) Projections. Sales Growth Rate. Restructuring Impaired acquisitions Layoffs 5 year plan -> growth by 2015. Industry Sales Growth Rates. Sales Growth Rate.

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Module 4: Parsimonious

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Module 4: Parsimonious

Brian Phelan


Agenda

  • Sales growth rate

  • Enterprise profit margin (EPM)

  • Enterprise asset turnover (EATO)

  • Projections


Sales Growth Rate

  • Restructuring

  • Impaired acquisitions

  • Layoffs

  • 5 year plan -> growth by 2015


Industry Sales Growth Rates


Sales Growth Rate

  • 2014: -5%

  • 2015: 2%

  • 2016 and beyond: 4.5%


Enterprise Profit Margin


Enterprise Profit Margin from Sales


Industry EPM from Sales


EPM Assumption

  • Assume: 7.5%

  • HP Average: 7.82%

  • IBM Average: 12.14%

  • MSFT Average: 30.49%

  • Little variation within each firms annual EPM


Enterprise Asset Turnover


Industry EATO


EATO Assumption

  • Assume: 3.86

    • Average HP EATO

  • EATO little annual variation for each firm


Assumption Summary

  • Sales growth rate:

    • 2014: -5% 2015: 2% 2016 and beyond: 4.5%

  • Enterprise profit margin: 7.5%

  • Enterprise asset turnover: 3.86


HP Projections


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