Guide Question Dragon Soup Essay

For slip (A)1. Using Excel sheet provided, and the recommended consequential disclosures as a basis for your analysis, what recommendations would you give Phillips on distributively of the items listed below? In each case, justify your recommendations and estimate how much the decision will change the rightful(a) lever of the conjunction and its encourage in the eyes of an investor in a private comp whatever. a. The lease or buy decision, including whether to structure an operating lease. b. The regular price of the soup, whether or not to run an end-of year packaging or target end-of-year inventory level. c. Whether or not to ask Dunwood to guarantee accounts receivable. d. Whether or not to mow the end-of-year provision for bad debts due to recent strong collection experience. e. Whether or not to sell unalike investments and, if the recommendation is not to sell the mortgage-backed securities, how to value them on the end-of-year balance sheet assuming market conditions d o not change. Given your recommendations, how much do you think a potential buyer will supply based upon a valuation earnings multiple of ten times sustainable earnings, addition the value of cash and marketable investments on the balance sheet?2. In the case, Phillips questioned how far he should push the envelope. why should he be concerned if all the actions you recommend are legal? Do you think the associated disclosures live up to the SEC requirement that a company provides a narrative explanation of its financial statements that enables investors to see the company through the eyes of the management?For Case (B)As stated in the case, Kerr had given the task of valuing potassium hydrogen tartrates equity for possible acquisition, assuming a valuation of ten times sustainable earnings, plus the value of cash and marketable investments on the balance sheet.He understood that most companies preparing for the sale would windowpane dress their financial statements. However, he h ad no reason to believe Dunwoodyand Phillips would do anything deliberately dishonest. In any event, it was Kerrs job to try to unwind any such behavior to establish Dragons true value.3. Using the Excel spreadsheet provided and the footnote disclosures it contains as a basis for your analysis, estimate the true value of the company in the eyes of an investor in a private company.4. Assuming Phillips had prepared the forecasts for you, would you want him to essence your team? Please justify your decision. Assuming you want to hire him, would you offer a similar hire structure to the Tomato Farm deal? Please describe how you think such a movement should be treated in accounting terms.5. The footnote disclosures in Excel spreadsheet are designed to slackly satisfy the SEC requirements to provide a narrative explanation of a companys financial statements, which enables investors to see company the through the eyes of management. What supernumerary information would you like to see in the alleged(prenominal) standard disclosures?As part of your submission, please provide an Excel spreadsheet that justifies your answers. To the extent that you change any assumptions from those contained in the Excel spreadsheet provided to your group, please provide a detailed explanation of the reasons for these changes and details of the magnitude of their impact on the valuation you propose.If your valuation includes information and/or calculations that cannot easily be incorporated into the spreadsheet provided, please provide additional explanations with your submissionMW PETROLEUM (A)JETBLUE AIRWAYS IPO VALUATIONKOHLER (A)CONSOLIDATED RAILFor Case (A)For Case (B)