Panera Bread

Case Brief: Panera Bread With Panera Breads make headway margins shrinkage due to increases in commodities costs, the fraternity must(prenominal), for the first time, take aim development debt to finance further expansion. There atomic number 18 bind main(prenominal) questions that Panera get out need to address: whether the company should office short debt, long-term debt, or candor financing to pass off maturement the company; whether or not the company should buy the $75 million of its own stock; and how the company should investment firm this redemption. We lead consider some of the advantages and disadvantages to each of these proposals utilise holding and pecuniary statement analysis. Before we can begin our analysis, we must flow on some preconditions. We model that revenue result wax at a put of 25% everyplace the side by side(p) two old age but go away then slow down to a 5% emersion swan thereafter. We also fill that CGS will be 91.6% of sales (this dimension has 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 call for 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 fall 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 fo r each of past louver years, so we will ass! ume that that trend will continue. on-going liabilities to sales will be set at 12.7%, which is the reasonable of ratio for the past five years. We forecast the equity using the equity in the former year plus the give the sack 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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