Star River Excel

This Spreadsheet supports STUDENT analysis of the case, "Star River
Electronics Ltd." (Case 24)
Revised December 2001

Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
Exhibit 1
STAR RIVER ELECTRONICS LTD.
Historical Income Statements
Fiscal Year Ended June 30
(SGD 000)
1998
1999
2000
2001
Assumptions
Sales
Operating expenses:
Production costs and expenses
Admin. and selling expenses
Depreciation
Total operating expenses
71,924
80,115
92,613
106,042
15% /year increase
33,703
16,733
8,076
58,512
38,393
17,787
9,028
65,208
46,492
21,301
10,392
78,185
53,445
24,177
11,360
88,983
Average 49% of sales

Average 22.5% of sales
1/7 of gross property and equip
Operating profit
Interest expense
Earnings before taxes
Income taxes*
Net earnings
13,412
5,464
7,949
2,221
5,728
14,908
6,010
8,897
2,322
6,576
14,429
7,938
6,491
1,601
4,889
17,059
7,818
9,241
2,093
7,148
2,000
3,728
2,000
4,576
2,000
2,889
2,000
5,148
Dividends to all common shares

Retentions of earnings
*The expected corporate tax rate was 24.5%.
6.7% of short term borrowings

24.5% of EBT
2002
2003
121,948
140,241
59,755
27,438
20,450
107,643
68,718
31,554
20,450
120,722
14,305
6,753
7,552
1,850
5,702
19,519
5,791
13,728
3,363
10,364
2,000
3,702
2,000
8,364
Exhibit 2
Historical Balance Sheets
(Fiscal Year Ended June 30)
(SGD 000)
Assets:
Cash
Accounts receivable
Inventories
Total current assets
Gross property, plant & equipment
Accumulated depreciation
Net property, plant & equipment
Total assets
Liabilities and Stockholders' Equity:
Short-term borrowings (bank)1
Accounts payable
Other accrued liabilities
Total current liabilities
Long-term debt2
Shareholders' equity
Total liabilities and stockholders' equity
1
1998
1999
2000
2001
4,816
22,148
23,301
50,265
5,670
25,364
27,662
58,697
6,090
28,078
53,828
87,996
5,795
35,486
63,778
105,059
64,611
(4,559)
60,052
110,317
80,153
(13,587)
66,566
125,262
97,899
(23,979)
73,920
161,916
115,153
(35,339)
79,814
184,873
29,002
12,315
24,608
65,926
37,160
12,806
26,330
76,296
73,089
11,890
25,081
110,060
84,981
13,370
21,318
119,669
10,000
34,391
110,317
10,000
38,967
125,263
10,000
41,856
161,916
18,200
47,004
184,873
Short-term debt was borrowed from City Bank at an interest rate equal to Singaporean prime lending rates + 1.5 percent.
Current prime lending rates were 5.2 percent. The benchmark 10-year Singapore treasury bond currently yielded 3.6 percent.
Two components made up the company's long term debt. One was a SGD10 million loan that had been issued privately
in 1996 to New Era Partners and to Star River Electronics Ltd., U.K. This debt was subordinate to any bank debt outstanding.
The second component was a SGD8.2 million from a 5-year bond issued on a private placement basis last July 1, 2000 at
a price of SGD97 and a coupon of 5.75% paid semi-annually.
+ 1.5 percent.
Assumptions
2002
2003
Similar to past couple of years

Average of 32% of sales
Average of 60% of sales
6,000
39,023
73,169
118,192
6,000
44,877
84,145
135,022
New DVD equipment over 2 years

1/7 of gross property/equipment
143,153
(55,789)
87,364
205,556
143,153
(76,239)
66,914
201,936
100,797
15,853
20,000
136,650
86,435
18,231
20,000
124,666
18,200
50,706
205,556
18,200
59,070
201,936
Average 13% of sales

Assuming 20,000
Same as last year

Retention of earnings
Exhibit 3
Ratio Analyses of Historical Financial Statements
Fiscal Year Ended June 30
1998
1999
2000
Operating margin (%)

Tax rate (%)
Return on sales (%)
Return on equity (%)
Return on assets (%)
18.6%
27.9%
8.0%
16.7%
5.2%
18.6%
26.1%
8.2%
16.9%
5.2%
15.6%
24.7%
5.3%
11.7%
3.0%
Debt/equity ratio
Debt/total capital (%)
EBIT/interest (x)
1.13
0.53
2.45
1.21
0.55
2.48
1.99
0.67
1.82
65.2%
15.0%
8.0%
112.4
36.5%
69.1%
64.0%
11.4%
13.5%
115.6
33.4%
72.1%
0.76
0.41
0.77
0.41
Profitability
Leverage
Asset Utilization
Sales/assets
Sales growth rate (%)
Assets growth rate (%)
Days in receivables
Payables to COGS
Inventories to COGS
57.2%
15.6%
29.3%
110.7
25.6%
115.8%
Liquidity
Current ratio
Quick ratio
0.80
0.31
2001
16.1%
22.6%
6.7%
15.2%
3.9%
2.20
0.69
2.18
57.4%
14.5%
14.2%
122.1
25.0%
119.3%
0.88
0.34
Exhibit 5

Data on Comparable Companies
Name
Sing Studios, Inc.
Wintronics, Inc.
STOR-Max Corp.
Digital Media Corp.
Wymax, Inc.
% of Sales
from CD-ROM and/or Price/Earnings
DVD Production
Ratio
20%
9.0
95%
NMF
90%
18.2
30%
34.6
60%
NMF
Beta
1.07
1.56
1.67
1.18
1.52
Book
D/E
0.23
1.70
1.30
0.00
0.40
Number of
Market
Shares
5-Year
Book Value
Price
Outstanding Last Annual Earnings Growth
per Share per Share (millions)
Dividend
Forecast
1.24
1.37
9.3
1.82
4.0%
1.46
6.39
177.2
0.15
15.7%
7.06
27.48
89.3
none
21.3%
17.75
75.22
48.3
none
38.2%
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.

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What are the historical financial trends of Star River Electronics?

What are the components of Star River Electronics' long term debt?

This Spreadsheet supports STUDENT analysis of the case, "Star River

Electronics Ltd." (Case 24)

Revised December 2001

15% /year increase

Average 49% of sales

Dividends to all common shares

6.7% of short term borrowings

Similar to past couple of years

New DVD equipment over 2 years

Average 13% of sales

Same as last year

Operating margin (%)

STAR RIVER ELECTRONICS LTD.

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