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Gap Inc.

Gap Inc. The Valuation Project -Mod 12&13: Full-Info Forecasting & Valuation Sherry Xu ( netID : jxu6). Table of Contents. 1. Company Profile 2. Reformulation 2.1 BS 2.2 IS 3 . Forecasting Sales EPM EATO 4. Valuation Assumptions DCF REI AEIG Adjustments. 1. Company profile.

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Gap Inc.

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  1. GapInc. TheValuationProject-Mod12&13:Full-InfoForecasting&Valuation SherryXu(netID:jxu6)

  2. Table of Contents • 1. Company Profile • 2. Reformulation • 2.1 BS • 2.2 IS • 3. Forecasting • Sales • EPM • EATO • 4.Valuation • Assumptions • DCF • REI • AEIG • Adjustments

  3. 1. Companyprofile Industry:Apparelstores Global retailer offering apparel, accessories, and personal care products for men, women, children, and babies Comparablecompanies:Abercrombie(ANF),AmericanEagle(AEO),Aeropostle(ARO) Foundedin1969inSanFrancisco;incorporatedinDelaware Brands:Gap, Old Navy, Banana Republic, Piperlime, Athleta, and Intermix #ofcompany-operatedstores: 3,095; # of franchise stores: 312 (As of FY2012 balance sheet date)

  4. 2.1 BS

  5. 2.1 BS

  6. 2.1 BS

  7. 2.1 BS

  8. 2.1 BS

  9. 2.1 BS

  10. NEA

  11. NEA

  12. NEA

  13. NEA

  14. NFL

  15. NFL

  16. 2.2 IS The income statement is highly aggregated. Line items are not discussed in the footnotes.

  17. EPAT

  18. FEAT

  19. 3.1 Sales 2014: average of past four years 2015: adjust slightly downward due to increased competition Other: included higher-margin brands, expected to achieve higher growth but stable 2018 onwards Thereafter: assume going forward at 2018 growth rate

  20. 3.2 EPM 2014: average of the past three years COGS, oper. expenses and income tax remain constant over the past years, not expected to change significantly Thereafter: assume going forward at 2018 %

  21. 3.3 EATO

  22. 3.3EATO

  23. 3.3 EATO

  24. 3.3 EATO 2014:averageofthepastthreeyears,continueinto2015andbeyond

  25. 4.1 Assumptions

  26. 4.2 DCF

  27. 4.3 REI

  28. 4.4 AEIG

  29. 4.5 Adjustments

  30. Questions?

  31. Thank you! Sherry Xu (netID: jxu6)

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