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EPS/EBIT Analysis Feedback and Strategies for Case Presentations

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This document presents feedback and suggestions for improving EPS/EBIT analysis case presentations related to key companies such as Kroger, Limited Brands, Wal-Mart, and Harley Davidson over various dates. Key observations include the need for individual feedback forms to be completed and recommendations for engaging presentations that think outside the box. Emphasis is placed on creativity, cohesion in slide design, and the importance of enthusiasm when addressing a Board of Directors audience. Specific EPS-EBIT analysis details for Heinz Company illustrate financial decision-making processes.

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EPS/EBIT Analysis Feedback and Strategies for Case Presentations

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  1. Bus 411 DAY 22

  2. Case Feedback Eps/ebit analysis Case 8 (Kroger) on April 17 Tony Case 9 (Limited Brands) on April 21 Dustin, Jaime, Donnie and David Case 10 (Wal-Mart) On April 24 Megan, Kristin & Angéle April 28 Tony – Harley Davidson May 1 Nike Dustin, Jaime, Donnie and David May 5 Final Exam issued Royal Caribbean Megan, Kristin & Angéle May 8 Midnight Final exam due The Rest of the Semester

  3. Case feedback • Individual Feeback forms not complete • Done later today or tomorrow • General Feedback • Analysis is better but the presentations are weak! • Suggestions • You may considered having only one (or two) present • Assumes your audience is a Board of Directors that you are trying to convince about strategies & directions • Be enthusiastic ! • Slides should look like they were made by One person • Dare to be different • Think out of the BOX , take risks! • Don’t parrot what the instructor does…be creative

  4. Finance/Accounting Issues Debt vs. Equity Decisions • EPS/EBIT analysis • Earnings per share/Earnings before interest and taxes

  5. EPS-EBIT Analysis(in $millions) • $Amount Needed: $500 • Stock Price $40 • EBIT Range $1000 to $2000 • Tax Rate 175/673 = .26 = 26% • Interest Rate 5% • # Shares Outstanding 350 (million) Heinz Company – Year End 2001

  6. EPS-EBIT Analysis (in $millions) – Heinz Company

  7. EPS-EBIT Analysis • Row 1 • EBIT (Earnings before Interest and taxes • Estimated High and Low based on previous earnings and future looking analysis • Row 2 • Interest paid in one year • Loan amount * interest rate • Row 3 • EBT (Earnings before Taxes) • Subtract Row 2 from Row 1

  8. EPS-EBIT Analysis • Row 4 • Taxes (uses tax rate * row 3) • Row 5 • EAT (earnings after taxes) • Subtract row 4 from Row 3 • Row 6 • Shares outstanding (from balance sheet) • For equity financing add amount financed/ share price • Row 7 • EPS earnings per share • Divide row 5 by row 6

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