ASSIGNMENT : CLC-Steps Required for Financial Recommendations

Part I: EPS / EBIT Analysis

Prepare an EPS/EBIT Analysis for your CLC group’s company by doing the following:

• Determine whether the firm should use all debt, all stock, or a 50-50 combination of debt and stock to finance their market-development strategy.
• Use your Strategic-Planning Template to complete the EPS/EBIT tables and chart.
• In 50-100 words, provide a summary recommendation/analysis overview for this part
• Slide 22 from strategy club: https:// www.strategyclub.com/wp-content/uploads/2020/11/SandersonFarms.Sample.Project.pdf

EBIT for Disney in 2021 was $3.005B a 254.82% decline from 2020 (Macrotrends)

Disney plans to raise its capital by $8 Million

Disney’s outstanding shares is 1.828B in 2021

	Common Stock Financing	Debt Financing
	Pessimistic Realistic Optimistic	Pessimistic Realistic Optimistic
EBIT	2.000,000 5,000,000 8,000,000	2,000,000 5,000,000 8,000,000
Interest	0 0 0	500 500 500
EBT	2,000,000 5,000,000 8,000,000
Taxes	438,000 1,095,000 1,752,000
EAT	1,562,000 3905,000 6,248,000
# shares
EPS

Stock	60%	Debt	40%
	Pessimistic	Realistic	Optimistic
EBIT	2,000,000	5,000,000	8,000,000
Interest
EBT
Taxes
#Shares
EPS

Amount Needed $8,000,000

Interest Rate 5%

# Shares Outstanding 1.828 B

Additional Shares outstanding 1.818

Stock Price

290 MIL before taxes

Below is a figure illustrating the changes of EPS (y-axis) with estimated EBIT values (x-axis).

HAVE TO REDO CHART JUST AN EXAMPLE

Summary

The Financial mixes represented in the data tables above examine Disney’s earnings per share (EPS) and earnings before income tax (EBIT) from a pessimistic, realistic, and optimistic viewpoint. Both the EPS and EBIT consist of a combination of financing from stock and debt (David et al., 2020)

Part II: Financial Statements

Prepare a projected income statement and balance sheet for the firm by doing the following:

• Refer to and follow the steps given in Chapter 8 of the David text to learn how to complete financial statements.
• Apply current acceptable financing percentages afforded your CLC group’s company according to the Standard and Poor’s or Moody’s rating.
• Make any other assumptions necessary for this segment of the project and have them approved by your instructor prior to completing this part of the assignment.
• Assume that the firm needs to secure capital to implement the strategy your team proposes to recommend. Your instructor will give you an amount if the team doesn’t determine an amount that will accommodate the production of the required reports.
• Use the information gathered above to prepare a projected income statement and 8balance sheet for the firm using your Strategic-Planning Template.
• In 50-100 words each, provide an analysis overview for both the projected financial statement and balance sheet.