HPL (NPV Analysis with Constant Growth)
Operating Results:
Total Capacity (000's)
Capacity Utilization
Unit Volume
Selling Price Per Unit - Growing at 3.0%
Revenue
Production Costs:
Raw Materials Per Unit Growing at 3.0%
Manufacturing Overhead Growing at 3.0%
Maintenance Expense Growing at 3.0%
Salaried Labor Cost:
Managers
Average Annual Fully Loaded Cost 3.0%
Total Salaried Labor Cost
Hourly Labor Cost:
Average Fully Loaded Hourly Cost 3.0%
Hours Per Year
Cost Per Hourly Employee
Number of Hourly Workers
Total Hourly Labor Cost (000's)
Selling, General & Administrative/Revenue
Total Labor Cost
Less: Raw Materials Costs
Less: Labor Cost
Less: Manufacturing Overhead
Less: Maintenance Expense
Less: Selling, General & Administrative
EBITDA
Less: Depreciation
EBIT
Less: Taxes 40%
NOPAT
Un-levered Free Cash Flow:
NOPAT
Plus: Depreciation (Less: Change in Net Fixed Assets)
Less: Change in Net Working Capital
Un-levered Free Cash Flow
Cost of Capital 9.38%
Present Value of Un-levered FCF 45,893 45,893
Present Value of Return of Working Capital 3,147
Investment 45,000
NPV (Net Present Value) 4,040
Working Capital Assumptions (1):
Days Sales Outstanding
Days Sales Inventory
Days Payable Outstanding
Balance Sheet Data:
Accounts Receivable
Inventory
Accounts Payable & Accrued Liabilities
Net Working Capital 12,817
Property, Plant & Equipment 45,000
Total Invested Capital 57,817
Asset Efficiency:
RNOA
ATO
HPL (EVA Analysis with Constant Growth)
Invested Capital:
Beginning Balance
Plus: Change in Working Capital
Less: Depreciation
Ending Balance
EVA Analysis:
NOPAT
Less: Capital Charge
EVA
Cost of Capital 9.38%
Present Value of EVA 12,766 12,766
Present Value of Return of Working Capital 3,147
Less: PV of 2018 Capital 11,873
NPV (Net Present Value) 4,040
HPL (NPV Analysis Using Gates Assumptions)
Operating Results:
Total Capacity (000's)
Capacity Utilization
Unit Volume
Selling Price Per Unit - Growing at 2.0%
Revenue
Production Costs:
Raw Materials Per Unit Growing at 1.0%
Manufacturing Overhead Growing at 3.0%
Maintenance Expense Growing at 3.0%
Salaried Labor Cost:
Managers
Average Annual Fully Loaded Cost 3.5%
Total Salaried Labor Cost
Hourly Labor Cost:
Average Fully Loaded Hourly Cost 3.5%
Hours Per Year
Cost Per Hourly Employee
Number of Hourly Workers
Total Hourly Labor Cost (000's)
Selling, General & Administrative/Revenue
Total Labor Cost
Less: Raw Materials Costs
Less: Labor Cost
Less: Manufacturing Overhead
Less: Maintenance Expense
Less: Selling, General & Administrative
EBITDA
Less: Depreciation
EBIT
Less: Taxes 40%
NOPAT
Un-levered Free Cash Flow:
NOPAT
Plus: Depreciation (Less: Change in Net Fixed Assets)
Less: Change in Net Working Capital
Un-levered Free Cash Flow
Cost of Capital 9.38%
Present Value of Un-levered FCF 47,030 47,030
Present Value of Return of Working Capital 2,941
Investment 45,000
NPV (Net Present Value) 4,971
Working Capital Assumptions (1):
Days Sales Outstanding
Days Sales Inventory
Days Payable Outstanding
Balance Sheet Data:
Accounts Receivable
Inventory
Accounts Payable & Accrued Liabilities
Net Working Capital 12,817
Property, Plant & Equipment 45,000
Total Invested Capital 57,817
Asset Efficiency:
RNOA
ATO
HPL (EVA Analysis Using Gates Assumptions)
Invested Capital:
Beginning Balance
Plus: Change in Working Capital
Less: Depreciation
Ending Balance
EVA Analysis:
NOPAT
Less: Capital Charge
EVA
Cost of Capital 9.38%
Present Value of EVA 13,134 13,134
Present Value of Return of Working Capital 2,941
Less: PV of 2018 Capital 11,104
NPV (Net Present Value) 4,971
2009 2010 2011 2012 2013 2014
80,000 80,000 80,000 80,000 80,000 80,000
60.0% 65.0% 70.0% 75.0% 80.0% 85.0%
48,000 52,000 56,000 60,000 64,000 68,000
1.77 1.82 1.88 1.93 1.99 2.05
84,960 94,801 105,156 116,048 127,498 139,530
0.94 0.97 1.00 1.03 1.06 1.09
3,920 4,038 4,159 4,283 4,412 4,544
2,250 2,318 2,387 2,459 2,532 2,608
4 4 6 6 6 6
160.0 164.8 169.7 174.8 180.1 185.5
640.0 659.2 1,018.5 1,049.0 1,080.5 1,112.9
20.00 20.60 21.22 21.85 22.51 23.19
2,000 2,000 2,000 2,000 2,000 2,000
40,000 41,200 42,436 43,709 45,020 46,371
450 473 509 545 582 618
18,000.0 19,476.4 21,603.8 23,841.3 26,193.7 28,665.7
7.8% 7.8% 7.8% 7.8% 7.8% 7.8%
18,640.0 20,135.6 22,622.2 24,890.3 27,274.1 29,778.6
45,120 50,346 55,846 61,630 67,711 74,101
18,640 20,136 22,622 24,890 27,274 29,779
3,920 4,038 4,159 4,283 4,412 4,544
2,250 2,318 2,387 2,459 2,532 2,608
6,594 7,358 8,161 9,007 9,895 10,829
8,436 10,606 11,981 13,779 15,673 17,669
4,000 4,000 4,000 4,000 4,000 4,000
4,436 6,606 7,981 9,779 11,673 13,669
1,774 2,643 3,192 3,911 4,669 5,468
2,662 3,964 4,789 5,867 7,004 8,201
2,662 3,964 4,789 5,867 7,004 8,201
4,000 4,000 4,000 4,000 4,000 4,000
12,817 1,598 1,595 1,711 1,799 1,891
(6,156) 6,366 7,194 8,156 9,204 10,310
(5,628) 5,321 5,497 5,698 5,879 6,021
47.6x 47.6x 47.6x 47.6x 47.6x 47.6x
37.6x 37.6x 37.6x 37.6x 37.6x 37.6x
34.2x 34.2x 34.2x 34.2x 34.2x 34.2x
2009 2010 2011 2012 2013 2014
11,223 12,523 13,891 15,329 16,842 18,431
8,865 9,892 10,972 12,108 13,303 14,559
7,270 7,999 8,852 9,716 10,624 11,578
12,817 14,415 16,010 17,722 19,521 21,412
41,000 37,000 33,000 29,000 25,000 21,000
53,817 51,415 49,010 46,722 44,521 42,412
4.9% 7.7% 9.8% 12.6% 15.7% 19.3%
1.6x 1.8x 2.1x 2.5x 2.9x 3.3x
2009 2010 2011 2012 2013 2014
45,000 53,817 51,415 49,010 46,722 44,521
12,817 1,598 1,595 1,711 1,799 1,891
4,000 4,000 4,000 4,000 4,000 4,000
53,817 51,415 49,010 46,722 44,521 42,412
2,662 3,964 4,789 5,867 7,004 8,201
4,220 5,047 4,822 4,597 4,382 4,175
(1,559) (1,084) (33) 1,271 2,622 4,026
(1,425) (906) (26) 888 1,675 2,351
2009 2010 2011 2012 2013 2014
80,000 80,000 80,000 80,000 80,000 80,000
60.0% 65.0% 70.0% 75.0% 80.0% 85.0%
48,000 52,000 56,000 60,000 64,000 68,000
1.77 1.81 1.84 1.88 1.92 1.95
84,960 93,881 103,124 112,700 122,618 132,887
0.94 0.95 0.96 0.97 0.98 0.99
3,920 4,038 4,159 4,283 4,412 4,544
2,250 2,318 2,387 2,459 2,532 2,608
4 4 6 6 6 6
160.0 165.6 171.4 177.4 183.6 190.0
640.0 662.4 1,028.4 1,064.4 1,101.6 1,140.2
20.00 20.70 21.42 22.17 22.95 23.75
2,000 2,000 2,000 2,000 2,000 2,000
40,000 41,400 42,849 44,349 45,901 47,507
450 473 509 545 582 618
18,000.0 19,570.9 21,814.0 24,190.2 26,706.0 29,368.2
7.8% 7.8% 7.8% 7.8% 7.8% 7.8%
18,640.0 20,233.3 22,842.4 25,254.6 27,807.6 30,508.4
45,120 49,369 53,698 58,109 62,603 67,181
18,640 20,233 22,842 25,255 27,808 30,508
3,920 4,038 4,159 4,283 4,412 4,544
2,250 2,318 2,387 2,459 2,532 2,608
6,594 7,286 8,004 8,747 9,517 10,314
8,436 10,637 12,034 13,848 15,746 17,732
4,000 4,000 4,000 4,000 4,000 4,000
4,436 6,637 8,034 9,848 11,746 13,732
1,774 2,655 3,214 3,939 4,699 5,493
2,662 3,982 4,821 5,909 7,048 8,239
2,662 3,982 4,821 5,909 7,048 8,239
4,000 4,000 4,000 4,000 4,000 4,000
12,817 1,471 1,440 1,527 1,583 1,641
(6,156) 6,512 7,381 8,382 9,465 10,598
(5,628) 5,443 5,640 5,856 6,046 6,189
47.6x 47.6x 47.6x 47.6x 47.6x 47.6x
37.6x 37.6x 37.6x 37.6x 37.6x 37.6x
34.2x 34.2x 34.2x 34.2x 34.2x 34.2x
2009 2010 2011 2012 2013 2014
11,223 12,401 13,622 14,887 16,197 17,554
8,865 9,796 10,760 11,759 12,794 13,865
7,270 7,909 8,654 9,392 10,154 10,941
12,817 14,288 15,728 17,255 18,838 20,479
41,000 37,000 33,000 29,000 25,000 21,000
53,817 51,288 48,728 46,255 43,838 41,479
4.9% 7.8% 9.9% 12.8% 16.1% 19.9%
1.6x 1.8x 2.1x 2.4x 2.8x 3.2x
2009 2010 2011 2012 2013 2014
45,000 53,817 51,288 48,728 46,255 43,838
12,817 1,471 1,440 1,527 1,583 1,641
4,000 4,000 4,000 4,000 4,000 4,000
53,817 51,288 48,728 46,255 43,838 41,479
2,662 3,982 4,821 5,909 7,048 8,239
4,220 5,047 4,810 4,570 4,338 4,111
(1,559) (1,065) 11 1,339 2,710 4,128
(1,425) (890) 8 935 1,731 2,410
2015 2016 2017 2018
80,000 80,000 80,000 80,000
85.0% 85.0% 85.0% 85.0%
68,000 68,000 68,000 68,000
2.11 2.18 2.24 2.31
143,716 148,028 152,468 157,043
1.12 1.16 1.19 1.23
4,681 4,821 4,966 5,115
2,687 2,767 2,850 2,936
6 6 6 6
191.0 196.8 202.7 208.8
1,146.3 1,180.7 1,216.1 1,252.6
23.88 24.60 25.34 26.10
2,000 2,000 2,000 2,000
47,762 49,195 50,671 52,191
618 618 618 618
29,525.7 30,411.4 31,323.8 32,263.5
7.8% 7.8% 7.8% 7.8%
30,671.9 31,592.1 32,539.9 33,516.1
76,324 78,614 80,972 83,401
30,672 31,592 32,540 33,516
4,681 4,821 4,966 5,115
2,687 2,767 2,850 2,936
11,154 11,489 11,834 12,189
18,199 18,745 19,307 19,886
4,000 4,000 4,000 4,000
14,199 14,745 15,307 15,886
5,680 5,898 6,123 6,355
8,519 8,847 9,184 9,532
8,519 8,847 9,184 9,532
4,000 4,000 4,000 4,000
642 662 681 702
11,877 12,185 12,503 12,830
6,341 5,948 5,580 5,235
7,714
47.6x 47.6x 47.6x 47.6x
37.6x 37.6x 37.6x 37.6x
34.2x 34.2x 34.2x 34.2x
2015 2016 2017 2018
18,984 19,554 20,141 20,745
14,995 15,445 15,909 16,386
11,925 12,283 12,651 13,031
22,055 22,716 23,398 24,100
17,000 13,000 9,000 5,000
39,055 35,716 32,398 29,100
21.8% 24.8% 28.3% 32.8%
3.7x 4.1x 4.7x 5.4x
2015 2016 2017 2018
42,412 39,055 35,716 32,398
642 662 681 702
4,000 4,000 4,000 4,000
39,055 35,716 32,398 29,100
8,519 8,847 9,184 9,532
3,978 3,663 3,350 3,038
4,542 5,184 5,835 6,493
2,425 2,531 2,604 2,649
7,714
29,100
2015 2016 2017 2018
80,000 80,000 80,000 80,000
85.0% 85.0% 85.0% 85.0%
68,000 68,000 68,000 68,000
1.99 2.03 2.07 2.12
135,545 138,256 141,021 143,841
1.00 1.01 1.02 1.03
4,681 4,821 4,966 5,115
2,687 2,767 2,850 2,936
6 6 6 6
196.7 203.6 210.7 218.1
1,180.1 1,221.4 1,264.1 1,308.4
24.59 25.45 26.34 27.26
2,000 2,000 2,000 2,000
49,170 50,891 52,672 54,516
618 618 618 618
30,396.1 31,460.0 32,561.1 33,700.7
7.8% 7.8% 7.8% 7.8%
31,576.2 32,681.4 33,825.2 35,009.1
67,852 68,531 69,216 69,908
31,576 32,681 33,825 35,009
4,681 4,821 4,966 5,115
2,687 2,767 2,850 2,936
10,520 10,730 10,945 11,164
18,229 18,725 19,218 19,709
4,000 4,000 4,000 4,000
14,229 14,725 15,218 15,709
5,692 5,890 6,087 6,284
8,537 8,835 9,131 9,426
8,537 8,835 9,131 9,426
4,000 4,000 4,000 4,000
423 431 438 446
12,114 12,404 12,693 12,980
6,468 6,055 5,665 5,296
7,207
47.6x 47.6x 47.6x 47.6x
37.6x 37.6x 37.6x 37.6x
34.2x 34.2x 34.2x 34.2x
2015 2016 2017 2018
17,905 18,263 18,628 19,001
14,143 14,426 14,714 15,008
11,146 11,356 11,572 11,793
20,902 21,332 21,770 22,216
17,000 13,000 9,000 5,000
37,902 34,332 30,770 27,216
22.5% 25.7% 29.7% 34.6%
3.6x 4.0x 4.6x 5.3x
2015 2016 2017 2018
41,479 37,902 34,332 30,770
423 431 438 446
4,000 4,000 4,000 4,000
37,902 34,332 30,770 27,216
8,537 8,835 9,131 9,426
3,890 3,555 3,220 2,886
4,647 5,280 5,911 6,540
2,481 2,577 2,638 2,668
7,207
27,216
