Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
This Spreadsheet supports STUDENT analysis of the case, "Star River Electronics Ltd."
(Case 24)
14,305 19,519
6.7% of short term borrowings 6,753 5,791
7,552 13,728
24.5% of EBT 1,850 3,363
5,702 10,364
2,000 2,000
3,702 8,364
Exhibit 2
STAR RIVER ELECTRONICS LTD.
Assets:
Cash 4,816 5,670 6,090 5,795
Accounts receivable 22,148 25,364 28,078 35,486
Inventories 23,301 27,662 53,828 63,778
Total current assets 50,265 58,697 87,996 105,059
100,797 86,435
Average 13% of sales 15,853 18,231
Assuming 20,000 20,000 20,000
136,650 124,666
1998 1999
Profitability
Operating margin (%) 18.6% 18.6%
Tax rate (%) 27.9% 26.1%
Return on sales (%) 8.0% 8.2%
Return on equity (%) 16.7% 16.9%
Return on assets (%) 5.2% 5.2%
Leverage
Debt/equity ratio 1.13 1.21
Debt/total capital (%) 0.53 0.55
EBIT/interest (x) 2.45 2.48
Asset Utilization
Sales/assets 65.2% 64.0%
Sales growth rate (%) 15.0% 11.4%
Assets growth rate (%) 8.0% 13.5%
Days in receivables 112.4 115.6
Payables to COGS 36.5% 33.4%
Inventories to COGS 69.1% 72.1%
Liquidity
Current ratio 0.76 0.77
Quick ratio 0.41 0.41
ements
2000 2001
15.6% 16.1%
24.7% 22.6%
5.3% 6.7%
11.7% 15.2%
3.0% 3.9%
1.99 2.20
0.67 0.69
1.82 2.18
57.2% 57.4%
15.6% 14.5%
29.3% 14.2%
110.7 122.1
25.6% 25.0%
115.8% 119.3%
0.80 0.88
0.31 0.34
Exhibit 5
STAR RIVER ELECTRONICS LTD.
Data on Comparable Companies
Number of
% of Sales Market Shares 5-Year
from CD-ROM and/or Price/Earnings Book Book Value Price Outstanding Last Annual Earnings Growth
Name DVD Production Ratio Beta D/E per Share per Share (millions) Dividend Forecast
Sing Studios, Inc. 20% 9.0 1.07 0.23 1.24 1.37 9.3 1.82 4.0%
Wintronics, Inc. 95% NMF 1.56 1.70 1.46 6.39 177.2 0.15 15.7%
STOR-Max Corp. 90% 18.2 1.67 1.30 7.06 27.48 89.3 none 21.3%
Digital Media Corp. 30% 34.6 1.18 0.00 17.75 75.22 48.3 none 38.2%
Wymax, Inc. 60% NMF 1.52 0.40 6.95 22.19 371.2 1.57 11.3%
Note: NMF means not a meaningful figure. This arises when a company's earnings or projected earnings are negative.