8/17/2019 High Country Seasonings Valuation

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High Country Seasonings

Year 0

Growth Rate of Sales 7.0% 6.0% 5.0% 4.8% 4.8%

Operating Cash Flows  Year 1 Year 2 Year 3 Year 4 Terminal Value

Sales $8.7! $!.!" $"0.! $".!"Cost of Goo#s Sol# at 58.5% of sales $.56 $.65 $"." $".8"

  Gross rofit &argin $7." $8."7 $8.68 $!.0

'nterest ()pense $0."0 $0.0 $0.40 $0.50

R*+ $0.! $0." $0. $0.5

SG*, $5.66 $6."7 $6.5! $6.!0

  'n-reental Operating rofit $.! $.7 $.6 $.4

 

'n-oe /a)es at "7% $0." $0.7 $0.7 $0.6

  'n-reental et 'n-oe $0.87 $.00 $0.!! $0.!8

1 +epre-iation ()pense 20%3 $0.47 $0.47 $0.47 $0.47

  'n-reental Operating Cash Flow $.4 $.47 $.46 $.45

Yearl et oring Capital 'nestent  Year 1 Year 2 Year 3 Year 4 Terminal Value

 ,##itional Cash $0." $0.6 $0.8 $0.40

 ,##itional ,R at 75 +as Sales O9tstan#ing $0."5 $0." $0."0 $0."

 ,##itional 'nentor at 4 'nentor /9rns $0.5 $0.0" $0.4 $0.5

 ,##itional , at 0 +as COGS $0.0" $0.0 $0.05 $0.05

  /otal C 'nestent :$.08 :$0.6 :$0.68 :$0.7

/erinal Cash Flows  Year 1 Year 2 Year 3 Year 4 Terminal Value

/otal ro;e-t Cash Flows $0."6 $0.86 $0.78 $0.74 $0.6

et resent

8/17/2019 High Country Seasonings Valuation

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rE = 3.25 + 0.65(7) = 7.8%

WACC = 7.4!08!!"