Business Valuation of Polo Ralph Lauren Corporation - Mark Moore ...

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Discounted Dividends (Amounts in millions of dollars except per share data)Years from valuation date 1 2 3 4 5 6 7 8 9 10 Terminal2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Dividends per share $0.20 $0.20 $0.25 $0.25 $0.30 $0.30 $0.35 $0.35 $0.40 $0.40 $0.45Present Value Factor 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463Present Value of Future Dividends $0.19 $0.17 $0.20 $0.18 $0.20 $0.19 $0.20 $0.19 $0.20 $0.19Total Present Value of Forecast FutureDividends $1.91Continuing (Terminal) Value (assume nogrowth) $15.00Present Value of Continuing (Terminal) Value $7.50Estimated Value per Share $9.41Earnings Per Share $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05 $ 2.11Dividends per share $0.20 $0.20 $0.25 $0.25 $0.30 $0.30 $0.35 $0.35 $0.40 $0.40Book Value Per Share 13.67 13.73 14.83 15.38 16.81 18.36 20.06 21.80 23.70 25.35 27.13Actual Price per shareCost of Equity Estimated 0.08growth rate 0.0546
Abnormal EarningsGrowth 1 2 3 4 5 6 7 8 9 PerpForecast Years2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014EPS $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05 $2.11DPS $0.20 $0.20 $0.25 $0.25 $0.30 $0.30 $0.35 $0.35 $0.40 $0.40DPS invested at 5.44% $0.02 $0.02 $0.02 $0.02 $0.02 $0.02 $0.03 $0.03 $0.03Cum-Dividend Earnings $1.68 $1.73 $1.78 $1.84 $1.90 $1.95 $2.01 $2.07 $2.14Normal Earnings $1.61 $1.66 $1.71 $1.76 $1.82 $1.87 $1.93 $1.99 $2.05Abnormal Earning Growth (AEG) $0.06 $0.07 $0.07 $0.07 $0.08 $0.08 $0.09 $0.09 $0.09 $0.00PV Factor 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540PV of AEG $0.06 $0.06 $0.06 $0.05 $0.05 $0.05 $0.05 $0.05Core EPS $1.61Total PV of AEG $0.43Continuing (Terminal) ValueFV ofPerp. $0.00PV of Terminal Value $0.00Total PV of AEG $0.43Average Perpetuity $2.04Capitalization Rate (perpetuity) $0.054Value Per Share pv $37.54 1-Apr-04 $38.04fv $38.27 1-Apr-05 $38.78Ke 0.08g 0.0347
Page 1 and 2: Business Valuation of Polo Ralph La
Page 3 and 4: Executive SummaryThe objective of t
Page 5 and 6: Industry Overview and Analysis.Comp
Page 7 and 8: Products and Services:Polo Ralph La
Page 9 and 10: Company-operated a total of 3,022 s
Page 11 and 12: Ralph Lauren lifestyle through new
Page 13 and 14: Lauren must remain a respected inno
Page 15: Net Accounts ReceivableA reserve fo
Page 18 and 19: offset by the increase in selling s
Page 20 and 21: Evaluation of the Quality of Disclo
Page 22 and 23: Ratio Analysis of Polo Ralph Lauren
Page 24 and 25: for the company. The Times Interest
Page 26 and 27: average of this ratio, with the exc
Page 28 and 29: (In millions of dollars)Annual Bala
Page 30 and 31: Based on the Comparable forward P/E
Page 32 and 33: occurred because their Book Value a
Page 34 and 35: Sensitivity Analysisg0 0.02 0.03 0.
Page 36 and 37: on those obligations. This valuatio
Page 38 and 39: AppendixCross Sectional (Benchmark)
Page 40 and 41: Net Profit Margin 4/3/2004 3/29/200
Page 42 and 43: Return on Equity (ROE) 4/3/2004 3/2
Page 44 and 45: Quick Ratio 4/3/2004 3/29/2003 3/30
Page 48: Residual Income 1 2 3 4 5 6 7 8 9 1
Page 51 and 52: 51Polo Ralph Lauren Corp.As Reporte
Page 54 and 55: 54Polo Ralph Lauren Corp.As Reporte

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