Panera Bread Mod 4&5

1. Panera BreadMod 4&5 Yiwen Lin

2. Panera overview • My Panera rewards card: gain points and receive discounts • —build loyal customer relationships • Healthy menu options: fresh and quality ingredients • In-house fresh bakery: reduced delivery cost • Dining experience: friendly and relaxing environment • International expansion in emerging market • Keep up with customer tastes and preferences—expand menu options

3. Mod 4 Parsimonious Forecasting

4. Return on net enterprise asset For each dollar of Panera’s sales during 2013, the firm earned roughly 32 cents profit after all enterprise expenses and taxes.

6. 2013 10K forecast Approach: Use 2012 Q3 and 2013 Q3 data to forecast 2013 annual data

7. Sales growth

8. Enterprise profit margin Not recommended! Further decomposition of EPM

9. Consider EPM from sales • Excluding the impairment charge, discontinued operations, financial statement translation etc. • Why? We cannot predict their values. • We expect a much smoother result

10. EPM From sales

11. EATO • Measures the productivity of the firm’s enterprise assets • Reveals the level of sales the firm realizes from each dollar invested in enterprise assets. • All things equal, a higher EATO is preferable.

12. EATO (CONT.)

13. Forecasting—Sales GRWOTH RATE

14. Forecasting—ePM FROM SALES

15. Forecasting—eATO

16. Forecast data

17. MOD 5 Discounted Cash Flow Model

18. Introduction • Time value of money • Expected future payoffs can be stated in terms of cash flows or accounting numbers • Use Parsimonious forecasts data from Mod 4 • Cash flow based forecast for intrinsic value of a infinite time frame • Two components (finite horizon period and infinity)

19. DCF Model