Financials of Gaming Companies($ million)

Companies
Circus Circus
Harrah's Entertainment
Mirage Resorts
Showboat Inc
Station Casinos
Median
Tax Rate
T.Bond(30-year)
ERP

Sales

Debt

1,300
1,550
1,331
428
467
0.40
6.98
5.5

Kd is post tax cost of debt

Share holder Fund
Long - term debt

432,718
693,499

1,406
940
571
544
649

Equity
2,635
1,831
4,465
306
328

EV
4,041
2,771
5,036
850
977

EBIT
391
310
375
78
105

EBITDA Beta
485
390
466
110
140

1.40
1.45
1.60
1.60
1.50

BV/MV
0.37
0.39
0.29
0.62
0.63

PE
19.20
23.10
###
31.70
12.40
23.10

Bond Rating
B
BB
NR
B
B
B

Unlevered Beta
1.06
1.11
1.49
0.77
0.69
1.06
Levered Beta
Ke
Kd
WACC

D/E

EV/Sales
0.53
0.51
0.13
1.78
1.98
0.53

1.40
14.68
6.03
11.70

Sales
EBIDTA
EPS
Net Debt

3.11
1.79
3.78
1.99
2.09
2.09
1,648,320.34
787,887
246,467.00
1.10
702,891.00

EV/EBIDTA
8.33
7.11
10.81
7.73
6.98
7.73
1,904,517.73

Equity
No of share

945,429.34
65,723,316

1,201,626.73
65,723,316

Share price
Average

14.38
19.36

18.28

P/E
19.20
23.10
23.10
31.70
12.40
23.10
25.41

Lively Enterprises - Balance Sheet

(Thousand $ )
As at
As at
31st Dec1995 31st Dec 1994
Assets
Current Assets:
Cash+cash equivalent
Reciveables
Deferred Income tax
Prepayment & Other
Inventories
Total current assets

67,796
36,942
13,058
14,460
10,771
143,027

63,646
35,345
12,093
12,911
10,258
134,253

Net Fixed Assets

Investment in unconsolidated affiliates
Deferred Costs & Other
Other Assets

954,461
63,099
42,401
98,698

893,754
59,192
40,305
106,253

1,301,686

1,233,757

432,718
693,499
22,733
14,383

373,485
702,890
18,186
12,945

33,499
16,442
79,020
9,392
138,353

27,822
14,798
71,118
12,513
126,251

1,301,686

1,233,757

Total Assets

Liabilities
Share holder Fund
Long - term debt
Other Liabilities
Deferred Income tax
Current Liabilities
Payables
Construction payables
Accrued expenses
Current portion of long-term debt
Total current liabilities
Total Liabilities

Dec 1994

Debt

702,891

Lively Enterprise - Income Statement

(Thousand $ - Except per-share data)

Revenues:

1995

1994

Casino
Rooms
Food & beverages
Other
Gross Revenue
Less: Promotional allowances

493,104
119,907
118,831
96,852
828,694
40,807

460,845
111,958
111,192
92,222
776,217
38,102

Net Revenues

787,887

738,115

Casino
Rooms
Food & beverages
Other
Gen. & Admin
Depreciation & amortisation

188,564
45,029
94,777
51,005
162,045
75,449

177,886
42,005
89,328
46,107
156,212
70,648

Total Costs & Expenses

EBIDTA
Income from operations
Interest expenses
Profit Before Tax
Provision for income tax
Profit After tax

616,869
246,467
171,018
54,405
116,613
44,313
72,300

582,186

1.1
65,723,316

1.0
65,723,316

Costs & Expenses

Earnings per share

Average shares outstanding

13.64

155,929
55,721
100,208
38,079
62,129

Lively Enterprises - Financial Projections

( $ million)
Year

Sales
Less:Cost of goods sold
Less:Selling, Gen. Admin

1996

1997

1998

1999

1,000
550
200

1,120
616
224

EBIT
250
280
NOPAT
150
168
Depreciation expense
85
90
NOPAT + Depri
235
258
Capital expenditure
128
190
FCFF
107
68
Increase in net working capital
4
2
Operating FCFF
103
66
CV
Addition
103
66
Discounting Factor
0.895
0.801
Discounted @ 11.7%
92
53
Net working capital
17.9
19.7
Net fixed assets
997
1,097
NWC/Salees
1.8%
1.8%
Net PPE/Sales
99.7%
99.7%
Note: Depreciation expense is included in the COGS
Tax projec
40%

CV

2899.691

1,254
690
251

1,405
773
281

314
188
95
283
205
78
2
76

351
211
100
311
220
91
2
89

76
0.718
55
21.7
1,207
1.8%
99.7%

89
0.642
57
23.9
1,327
1.8%
99.7%

5
Steady
state
cash flow

2000
1,574
865
315
393
236
105
341
230
111
2
109
2899.69103
3,009
0.575
1,730
26.3
1,452
1.8%
99.2%

47.50
97.30

Value of Firm
Net Debt
Value of equity
No of shares

236
50
286
100
186
1
185

1,987
701
1,286
66
19.57439

1996
Sales
Less:Cost of goods sold
Less:Selling, Gen. Admin

1,000
550
200

EBIT
NOPAT
Depreciation expense
NOPAT + Depri
Capital expenditure
FCFF
Increase in net working capital
Operating FCFF
CV
Addition
Discounting Factor
Discounted @ 11.7%

250
150.0
85
235.0

1997

1998

1999

2000

1,120
605
224

1,254
666
251

1,405
732
281

1,574
805
315

291
174.6
90
264.6

338
202.5
95
297.5

392
235.2
100
335.2

454
272.3
105
377.3

Interest-Rate Yields(%)
Government
T.Bill(1-year)
T.Note(10-year)
T.Bond(30-year)

5.93
6.39
6.98

Industrials
AAA
AA
A
BBB
BB
B

7.22
7.39
7.58
7.95
8.87
10.05

ERP

5.5

Logic

Growth rate of sales is higher in early period of the company and hence we consider growt
Debt

Long term debt+Current portion of LT debt

ce we consider growth rate when it stabilizes

Q3 . 2011
EPS
Market price /Share
PE ratio
No. of shares
PAT (total earning )
Total marketvalue

Solid Co.
Float Co
st merger
3.5
3.5
4.67
52.5
26.25
52.5
15
7.5
11.25
150000
150000
225000
525000
525000 1050000
7875000
3937500 11812500 or do sum

Exchange Ratio
Total Shares to be issued to Float
Total Shares of combined

0.50
75000
225000

Total PAT

1050000

Q 4 . 22/10/2013
Sales
EBIT
NWC
Depre
Capex

Yr 1
200
20
33
5
10

Yr 2
217
22
37
5
10

Yr 3
239
25
41
6
15

Yr 4
270
26
44
7
6

Sales
EBIT
(1-tax)rate
NOPAT
add: Depre
less: NWC change
less:Capex
FCFF

Yr 1
200
20
0.66
13.2
5
3
10
5.2

Yr 2
217
22
0.66
14.52
5
4
10
5.52

Yr 3
239
25
0.66
16.5
6
4
15
3.5

Yr 4
270
26
0.66
17.16
7
3
6
15.16

Projection Year
Discount Factor
Present Value of FCF

0.88

0.78

0.69

0.61

sum

Q 5 2011
face value of share

10
XXX ltd

Sales
R&S
EPS
Market val/share
No of shares (crore)
Book value /share

P/E
P/sales
P/BV

YYY ltd
160
56
10
100
2.4

240
160
18
150
2

ZZZ ltd
300
170
16.66
160
3

33.33

90.00

66.67

10
1.5
3

8.33
1.25
1.67

9.60
1.6
2.4

Avg
9.31
1.45
2.36

networth
bv=share cap+RNS
share cap=face value*no of share

postmerger PE = avg of 2 PE

Yr 5
293
30
48
8
20

Yr 5
293
30
0.66
19.8
8
4
20
3.8

tax
WACC
Terminal growth

Total

1)

0.54
2

23

Share price calculation using perpetuity ( gordon ) growth method

METHOD

Step 1:

Present value of Explicit FCFF

22.71

Step 2:

Terminal value calculation

Step3:

Calculate present value of terminal value

49.88
Step4:

34% Asset
13% Current asset
5% Plant

Calculate Enterprise value

Present value of FCFF

22.71

Present value of Terminal value

49.88

Total Enterprise value

72.59

less: Debt
Add: cash
Equity value

NO need of this section

No of shares

Target company given data

Sales
R&S
EPS
No of shares (crore)
BV/share

200
90
10
3
40

Price from P/E

Price from P/sales
Price from P/BV

weight given
93.12
50%
290
25%
94.22
25%
TOTAL

46.56196
72.5
23.55556
142.6175

o of share

Liability

urrent asset

50
50

Current lia
debt
NW

20
30
50
100

100

ordon ) growth method

EVA Method

Yr 1

49.875

Yr 2
13.20

14.52

16.50

CAPEX

10.00

10.00

15.00

EVA

11.90

13.22

14.55

NPV of EVA

50.35

NPV of terminal value

71.81

EV

122.16

less: debt
add: cash
EV
Value per Share

Yr 3

NOPAT

NO need of this section

Yr 4

Yr 5

17.16

19.80

6.00

20.00

16.38

17.20

132.31