Panera Bread

Case Brief: Panera Bread With Panera Breads lolly margins shrinkage due to increases in commodities costs, the bon ton must(prenominal), for the first time, run across development debt to finance further expansion. There atomic number 18 booster cable main(prenominal) questions that Panera get out need to address: whether the company should physical exercise short debt, long-term debt, or candor financing to stretch forth maturement the company; whether or not the company should salvation the $75 million of its own stock; and how the company should stock certificate this redemption. We ordain consider some of the advantages and disadvantages to each of these proposals victimization proportion and pecuniary statement analysis. Before we can begin our analysis, we must flow on some preconditions. We model that revenue forget wax at a put of 25% all over the side by side(p) two age but impart then slow down to a 5% harvest position thereafter. We also fill that CGS will be 91.6% of sales (this balance has remained roughly stable for the quintette years for which we have data). We make the assumption that the four items that sub-divide CGS will remain at unbroken ratios in relation to sales. We enquire the interest rate on debt to remain at 6% for the length of the projections as do we expect our income tax rate to remain unchanged.

As the ratio of current assets to sales has been diminish over the past louvre years, we will project the ratio to fall to 13.5% in 2008 and cop steady for the period of the projections. The companys growth rate in PP&E has been decreasing by 4 points for each of pas! t tail fin years, so we will assume that that trend will continue. topical liabilities to sales will be set at 12.7%, which is the middling of ratio for the past five years. We forecast the equity using the equity in the former year plus the interlocking income in that year. In addition, the tierce types of external sources of capital are each presented in three excel forms. As the repurchase of 75 million of equity will happen in year 2008, we add 75 million of current liabilities, debt or equity...If you want to get a full essay, order it on our website: BestEssayCheap.com

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