1. REPORT ON VALUATION PROJECT OF CROWN CRAFTS
BY JIUN-AN CHEN & ZIYI WANG
FEB. 19th 2019
UNIVERSITY OF
ILLINOIS

2. agenda Framework of report ILLINOIS INTRODUCTION METHODOLOGY
VALUATION ANALYSIS
Introduction-Macro(Industry), Company(Timeline)
Methodology-Porter/Pest, DCF
Analysis-Key assumption, I/S, B/S, Modeling
Extension-Technical analysis
Timeline
8/4/2017 Acquire Carosusel
12/15/2017 Acquire Sassy
2019 fiscal year Impacted by bankruptcy of Babies"R"Us and Toys"R"Us, Toys R Us and Babies R Us will be liquidating at least through June, 2018
Summary-Buy or sell?
EXTENSION DISCUSSION
SUMMARY
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3. INTRODUCTION Basic Information of Company Description of Business
Timeline(bankrupt)-product category(business model)-subsidiary(acquisition)
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4. METHODOLODY Analysis Methods of Report Key Assumptions Macro Analysis
Porter Five Forces Theory
P. E. S. T. Theory
Financial Analysis
Valuation Model
DCF Model
Technical Analysis
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5. VALUATION ANALYSIS Key Assumptions
Net Sales grow at 3% at fiscal year 2019 and 2020 because of 2 acquisitions and then grow at 1% in the following three years
Perpetual growth rate is 2%
Based on Crown Craft previous 5 years financial statements, it only raised debt for acquisition funding. As a result, we assume that only equity plays the role in CAPM
The effective tax rate should continue to hold at 24.2% according to management.
According to latest earning call, Toy“R”Us should stop being such a big drag entering fiscal year 2020
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6. Bargaining power of buyers Bargaining power of SUPPLIERS
VALUATION ANALYSIS
Macro Analysis
Porter Five Forces Theory
P. E. S. T Analysis
POLITICAL
Regulation
Tariff
Law
RIVALRY
Bargaining power of buyers
Bargaining power of SUPPLIERS
THREAT OF NEW ENTRANTS
THREAT OF SUBSTITUTES
SOCIAL
Population
Culture
Habit
TECH
Improvement
Efficiency
Cost
industry
producer
Consumption
ECONOMICS
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7. VALUATION ANALYSIS
Financial Analysis
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8. VALUATION ANALYSIS
Financial Analysis

9. VALUATION ANALYSIS
Financial Analysis

10. VALUATION ANALYSIS
Financial Analysis

11. VALUATION ANALYSIS Valuation Model Monte Carlo Model DCF Model
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ILLINOIS

12. VALUATION ANALYSIS
Technical Analysis
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13. EXTENSION DISCUSSION Economic Cycle Extreme Situation
Financial crisis: Curse or Concern?
Measure test
Hedge risk
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14. ACQUISITION: POSITIVE ATTITUDE
SUMMARY
The Final Conclusion
BASIC ANALYSIS
TECHNICAL ANALYSIS
ACQUISITION: POSITIVE ATTITUDE
RECOMMENDATION: HOLD
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15. THANK YOU FOR LISTENING!
BY JIUN-AN CHEN & ZIYI WANG
FEB. 19th 2019
UNIVERSITY OF
ILLINOIS