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Module 4: Parsimonious

Module 4: Parsimonious. Brian Phelan. Agenda. Sales growth rate Enterprise profit m argin (EPM) Enterprise asset turnover (EATO) Projections. Sales Growth Rate. Restructuring Impaired acquisitions Layoffs 5 year plan -> growth by 2015. Industry Sales Growth Rates. Sales Growth Rate.

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Module 4: Parsimonious

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  1. Module 4: Parsimonious Brian Phelan

  2. Agenda • Sales growth rate • Enterprise profit margin (EPM) • Enterprise asset turnover (EATO) • Projections

  3. Sales Growth Rate • Restructuring • Impaired acquisitions • Layoffs • 5 year plan -> growth by 2015

  4. Industry Sales Growth Rates

  5. Sales Growth Rate • 2014: -5% • 2015: 2% • 2016 and beyond: 4.5%

  6. Enterprise Profit Margin

  7. Enterprise Profit Margin from Sales

  8. Industry EPM from Sales

  9. EPM Assumption • Assume: 7.5% • HP Average: 7.82% • IBM Average: 12.14% • MSFT Average: 30.49% • Little variation within each firms annual EPM

  10. Enterprise Asset Turnover

  11. Industry EATO

  12. EATO Assumption • Assume: 3.86 • Average HP EATO • EATO little annual variation for each firm

  13. Assumption Summary • Sales growth rate: • 2014: -5% 2015: 2% 2016 and beyond: 4.5% • Enterprise profit margin: 7.5% • Enterprise asset turnover: 3.86

  14. HP Projections

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