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2015 Growth Projections: Sales, Profit Margin, and Asset Turnover Analysis

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This module outlines projections for a company’s sales growth rate, enterprise profit margin (EPM), and enterprise asset turnover (EATO) from 2014 to 2016. It indicates a sales growth decline of -5% in 2014, a recovery to 2% in 2015, and a forecasted growth of 4.5% in 2016 and beyond. The EPM is assumed to be 7.5%, with averages calculated for major competitors such as HP, IBM, and Microsoft. The EATO is projected at 3.86, noting that annual variations within each firm are minimal. The agenda includes restructuring, impaired acquisitions, and layoffs as part of a 5-year growth strategy.

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2015 Growth Projections: Sales, Profit Margin, and Asset Turnover Analysis

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Presentation Transcript

  1. Module 4: Parsimonious Brian Phelan

  2. Agenda • Sales growth rate • Enterprise profit margin (EPM) • Enterprise asset turnover (EATO) • Projections

  3. Sales Growth Rate • Restructuring • Impaired acquisitions • Layoffs • 5 year plan -> growth by 2015

  4. Industry Sales Growth Rates

  5. Sales Growth Rate • 2014: -5% • 2015: 2% • 2016 and beyond: 4.5%

  6. Enterprise Profit Margin

  7. Enterprise Profit Margin from Sales

  8. Industry EPM from Sales

  9. EPM Assumption • Assume: 7.5% • HP Average: 7.82% • IBM Average: 12.14% • MSFT Average: 30.49% • Little variation within each firms annual EPM

  10. Enterprise Asset Turnover

  11. Industry EATO

  12. EATO Assumption • Assume: 3.86 • Average HP EATO • EATO little annual variation for each firm

  13. Assumption Summary • Sales growth rate: • 2014: -5% 2015: 2% 2016 and beyond: 4.5% • Enterprise profit margin: 7.5% • Enterprise asset turnover: 3.86

  14. HP Projections

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