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Staples Module 8 Presentation

Staples Module 8 Presentation. Mary Astuno 17 February 2014. Business Segments. North American Commercial segment consists of the U.S. and Canadian business units that sell and deliver office products and services directly to businesses, including Staples Advantage and Quill.com .

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Staples Module 8 Presentation

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  1. Staples Module 8 Presentation Mary Astuno 17 February 2014

  2. Business Segments North American Commercial segment consists of the U.S. and Canadian business units that sell and deliver office products and services directly to businesses, including Staples Advantage and Quill.com. International Operations segment consists of businesses in 23 countries in Europe, Australia, South America and Asia] Reported negative NI of $210.7M for FY 2012 Reported NI of $620M for FY 2013

  3. Residual Enterprise Income Residual enterprise income method can be algebraically derived from the free cash flow model and thus the two are equivalent. REI and FCF using 2013 forecasted data:

  4. REI-Forecasted 2013 Sales

  5. DCF-forecasted 2013 Sales

  6. REI-2013 Data

  7. DCF-2013 Data

  8. Abnormal Enterprise Income Growth Model

  9. Abnormal Enterprise Income Growth Model • Mathematically equivalent to the free cash flow model. • FCF=EPAT-Change in NEA • EPAT/r(ent) serves as the starting point-it anchors the valuation • Agr=EPAT+(r(ent)*FCF)Represents Cumulative FCF income - ((1+r(ent))*EPAT)Represents Normal Income

  10. Abnormal Enterprise Income Growth Model • Different accounting methods do not causes a change in the value estimate: • Change in depreciation causes no effect on value calculated • Income shifted between periods causes no effect on value calculated • Ex: LIFO vs FIFO • Capital vs Operating lease • GAAP vs IFRS

  11. Abnormal Enterprise Income Growth Model

  12. Staples Enterprise Value-Ycharts.com

  13. The End Questions, comments?

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