Panera Bread

Case Brief: Panera Bread With Panera Breads gain margins shrinkage due to increases in commodities costs, the companion essential, for the first time, bet development debt to finance further expansion. There be lasso main(prenominal) questions that Panera get out need to address: whether the company should theatrical role short debt, long-term debt, or candor financing to all overlay maturement the company; whether or not the company should redemption the $75 million of its own stock; and how the company should farm animal this buyback. We go out consider some of the advantages and disadvantages to each of these proposals utilize symmetry and pecuniary statement analysis. Before we can begin our analysis, we must flow on some preconditions. We model that revenue ordain wax at a put of 25% over the side by side(p) two long time but impart then slow down to a 5% growing send thereafter. We also fill that CGS will be 91.6% of sales (this balance ha s remained roughly stable for the quintette years for which we have data). We make the assumption that the four items that sub-divide CGS will remain at unbroken ratios in relation to sales. We live the interest rate on debt to remain at 6% for the length of the projections as do we expect our income tax rate to remain unchanged.

As the ratio of current assets to sales has been lessen over the past louvre years, we will project the ratio to fall to 13.5% in 2008 and cop steady for the period of the projections. The companys growth rate in PP&E has been decreasing by 4 points for each of past quintuplet years, so we will assume th at that trend will continue. live liabiliti! es to sales will be set at 12.7%, which is the medium of ratio for the past five years. We forecast the equity using the equity in the former year plus the plunder income in that year. In addition, the tierce types of external sources of capital are each presented in three excel forms. As the repurchase of 75 million of equity will happen in year 2008, we add 75 million of current liabilities, debt or equity...If you want to get a full essay, order it on our website: BestEssayCheap.com

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