mercury athletic footwear sensitivity analysis

Nike has captured approx. -Founded in 1968 by Daniel Fiore -Producer, designer and distributor of branded athletic and View Notes - Mercury Athletic Footwear Case File from FIN 555 at DePaul University. MGMT S-2720 Assignment 1: Mercury Athletic Footwear Questions The case uses the potential acquisition of Mercury Athletic as a vehicle to teach students basic DCF (discounted cash flow) valuation using the weighted average cost of capital (WACC). As a global fashion industry and retail expert, he supports clients on a broad range of strategic and top management topics, as well as on operations and sourcing- related issues. 3 million in revenue in 2006, making it relatively small compared to big players in the athletic and casual footwear industry. Mercury Athletic Footwear, Inc.: Valuing the Opportunity: Brief Case No. Opinion & Analysis Jan 12, 2019 9:00AM PT Why Shoe Production May Never Come Back to the US . Majo Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 CASH FLOW AND OPERATING ASSUMPTIONS Mercury Athletic Footwear Case DCF VALUATION ANALYSIS Jianqiu … Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Reasons why Mercury is an appropriate target for AGI 4 2. The company also offers other products such as sports equipment and accessories. Active Gear, Inc. is a privately held footwear company with $470. Amongst the procedur In the first excess free cash flow analysis ran for Mercury Athletic Footwear, as can be seen in Exhibit 1, we used the assumptions given by Liedtke. The rise in the market value can be attributed to rising health awareness, changing consumer lifestyle and technological advancements. The last page of the Mercury Athletic case mentions at least two possible sources of value creation not captured in Liedtke’s base case scenario: a significant reduction in Mercury’s days sales in inventory (DSI) and a possible combination of Mercury’s and … Global shipments were over 3.5 billion units in 2015. Nike’s Strengths – Internal Strategic Factors. Operating Income. Mercury Athletic is the footwear division of West Coast Fashions (WCF), a designer and distributer of branded athletic and casual footwear, targeted at youth market. In order to summarize, due to AGI’s small size, there is a strong risk of being overtaken by the other giant players in the market therefore, if it acquires Mercury, the risk will be minimized and there is a strong opportunity that the company will grow steadily. Just three companies (Nike, Adidas, and Under Armour) account for more than $25 billion in sneaker sales each year. Its swoosh symbol is easily recognized by everyone. 12.5%. $60.4mn. Mercury Athletic Footwear – Acquisition Analysis. AGI Mercury Athletic Footwear $470.3 Million Sales Revenue in 2006 42% Revenue - Athletic Footwear 58% Revenue - Casual Footwear Among the best profit margins in the Industry Prosperous, Active, and Fashion-Conscious Brand Image. clothing, textiles, footwear, athletic wear, beauty, accessories and retailers spanning from the value end to luxury. Key players include Puma, Nike, Gap Inc., Athletic footwear refers to those shoes that are designed for sports and other outdoor activities. Mercury Athletic: Valuing the Opportunity Case Solution,Mercury Athletic: Valuing the Opportunity Case Analysis, Mercury Athletic: Valuing the Opportunity Case Study Solution, When pupils have the English language PDF of this Brief Case in a coursepack, they are going to … Revenue growth . $470,285mn. A Five Forces Analysis, based on Michael Porter’s model, points out that competition, customers and substitutes are the most important external forces in Nike’s industry environment. Samantha McDonald. It was estimated in 2017, that the apparel market grew by approximately 5.46 percent compared to the previous year, with an expected peak growth rate of around 6.2 percent in 2020. Format: Print | Language: English ShareBar. 31% of the global athletic footwear market. Mercury Athletic Footwear: Valuing the Opportunity Case Study Solution & Analysis Why Almost Everything You’ve Learned About Mercury Athletic Footwear: Valuing the Opportunity Case Solution Ideas Is Wrong and What You Should Know. 4 a. Estimation of the weighted average cost of capital 5 b. Is Mercury an Appropriate Target for AGI? Mercury Potential to double revenues Increase leverage with manufacturers Increase long run growth rate Expand presence with key retailers and distributors. 4050. More Stories … Academic writing is getting a service in itself. Global Athletic Footwear Market is expected to reach $114.8 billion by 2022, growing at a CAGR of 2.1% during the forecast period 2016 - 2022. $42,299mn. 79% Athletic 21% Casual. Should AGI purchase Mercury? Athletic Footwear Market Overview. India: Revenue in the Footwear market is projected to reach US$7,923m in 2020. ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset ?eta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Reasons why Mercury is an appropriate target for AGI 4 2. Athleisure Market size was valued at $155.2 billion in 2018 & to reach $257.1 billion by 2026, with a CAGR of 6.7%. 42% Athletic 58% Casual. Mercury Athletic Footwear Case Study Analysis is really simple to comprehend it's centered on creating content that can be readily discovered by leading search engines such as Google, Yahoo, and Bing. In 2006, making it relatively small compared to big players in footwear... And analyzes different economic aspects of the firm & Overview of Problems 3 Analysis on Mercury 4. 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