245125108.xls.

ms_office

EXHIBIT 1

Sales
EBIT
Interest Expense
Profit after tax
Profit after tax/Sales
After-tax Return on
Total Capital
Return on Equity
Earnings/Share
Dividends/Share
Average Stock Price
Avg. Stock Price/
Earnings per Share
Market value/
Book value
S&P 400 P/E
S&P 400 Market value/
Book value

Selected Financial Data, 1965-1982

(dollar figures in millions except per share data)

1965
2999
767
2
407
13.6%

1966
3159
727
4
389
12.3%

1967
3079
574
7
314
10.2%

1968
3455
764
7
372
10.8%

MORE -->
1969
3632
709
10
356
9.8%

18.5%
18.6%
$2.96
$2.00
$81.04

16.6%
16.8%
$2.83
$1.92
$80.88

13.0%
13.0%
$2.24
$1.67
$54.42

14.2%
14.6%
$2.66
$1.83
$54.25

12.8%
13.3%
$2.54
$1.75
$44.46

11.1%
11.8%
$2.29
$1.68
$38.29

$27.40

$28.60

$24.30

$20.40

$17.50

$16.70

1970
3618
590
11
329
9.1%

$5.40
16.8

$5.28
15.2

$3.26
17

$3.07
17.3

$2.38
17.5

$1.98
16.5

2.13

1.96

2.12

2.07

1.69

Note: After tax return on total capital =

[EBIT * (1-tax rate)]/[all debt + equity].
Average stock price is average of year's high and low values. Per
share data restated to be comparable with number of shares
outstanding as of 12/31/82.

SCROLL DOWN FOR EXHIBIT 2...

EXHIBIT 2

Capital Expenditures ($)

Change in Working
Capital ($) (a)
CAPITAL STRUCTURE
Short-term debt
($)

Selected Funds Needs Data 1965-1982

(dollar figures in millions)
1965
327

1966
531

1967
454

1968
332

MORE -->
1969
391

1970
471

--

-163

121

102

154

135

31

57

45

56

Page 1

245125108.xls.ms_office

(%)
Long-term debt
($)
(%)
Equity
($)
(%)
Total Capital
($)
(%)

Interest coverage
Bond rating
(senior debt)

0.0%

0.0%

1.2%

2.1%

1.6%

1.9%

34
1.5%

58
2.4%

95
3.7%

150
5.5%

141
4.9%

160
5.3%

2190
98.5%

2317
97.6%

2409
95.1%

2540
92.4%

2685
93.5%

2790
92.8%

2224
100.0%

2375
100.0%

2535
100.0%

2747
100.0%

2871
100.0%

3006
100.0%

383.5

181.8

82

109.1

70.9

53.6

AAA

AAA

AAA

AAA

AAA

AAA

(a) Working Capital is defined here as net working capital

excluding cash, marketable securities and short-term debt.

SCROLL DOWN FOR EXHIBIT 3...

EXHIBIT 3

Financial Data for Selected Chemical Companies

(dollars figures in millions)

Sales
10-year compound annual sales
growth rate
10-year compound annual EPS
growth rate
Net income ($)
Net income/Sales (%)
Return on total capital
Return on equity (%)
Dividend payout ratio (%) (a)
Stock price/EPS ratio (b)
Market Value/Book Value (%) (b)
Debt/Total Capital (%)
Interest coverage ratio
Bond rating (senior debt)

1980
13652

1982
33331

MORE -->
|--Dow Chemical--|
1980
1982
10626
10618

14.2%

22.5%

18.7%

16.0%

12.8%

7.4%
744
5.4%
10.9%
13.1%
58.1%
8.4
1.1%
20.4%
10.9
AAA

2.9%
894
2.7%
6.6%
8.2%
64.0%
9.9
82.9%
35.7%
4.8
AA

19.9%
805
7.6%
7.2%
18.1%
36.2%
7.6
1.4%
48.5%
2.2
A

5.7%
399
3.8%
7.9%
9.6%
101.7%
13.7
93.4%
42.7%
1.6
A

8.3%
149
2.3%
5.3%
5.5%
86.6%
13.7
72.0%
33.4%
2.8
AA

(a) Celanese 10-year compound annual EPS growth rate, dividend

Page 2

|----Monsanto----|
1980
6574

245125108.xls.ms_office

payout ratio, stock price/EPS and interest coverage use 1981

instead of 1982.
(b) Market value/book value and stock price/EPS are based on
average of year's high and low stock prices.
SCROLL DOWN FOR EXHIBIT 4...

EXHIBIT 4

MORE -->

Bond Rating Medians for 1979-1981

INDUSTRIAL CORPORATIONS
Interest coverage (x)
Total debt/capital. (%)
ELECTRIC UTILITIES
Interest coverage (x)
Low
High
Total debt/capitalization (%)
Low
High
TELEPHONE COMPANIES
Interest coverage (x)
Low
High
Total debt/capitalization (%)
Low
High

AAA

AA

BBB

BB

18.25
17.0%

8.57
23.7%

6.56
30.4%

3.82
38.6%

3.27
48.1%

1.76
58.8%

3.25
4.25

2.5
3.5

0
3

0.42
0.47

0.45
0.55

0.55

3.7
4.7

2.8
4

0
3

40.0%
48.0%

48.0%
58.0%

58.0%
64.0%

0.45

4.5

40.0%

SCROLL DOWN FOR EXHIBIT 6...

EXHIBIT 6

Financial Projections, 1983-1987 ($ Millions)

SOURCES OF FUNDS
Net Income
Depreciation
FUNDS FROM OPERATIONS
Assets Sold
Cash Decreases
Other Sources
SOURCES BEFORE NEW

1983
1009
2101
3110

1984
1196
2111
3307

1985
1444
2212
3656

1986
1591
2396
3987

1987
1753
2667
4420

600
199
74

600
-200
135

600
-200
135

0
-150
135

0
-150
135

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245125108.xls.ms_office

FINANCING
USES OF FUNDS
Dividends
Capital Expenditures
Increases in net working
capital
Other
TOTAL USES
Net Financing Requiremt.

3983

3842

4191

3972

4405

571
2767

658
3386

794
4039

896
4202

964
4667

973
10
4321

414
10
4468

594
10
5437

587
10
5695

650
10
6291

338

626

1246

1723

1886

Note: Net working capital excludes cash, marketable securities and

short term debt.
ASSUMPTIONS:
Sales are average of analysts' forecasts; average annual sales
growth rate is 10%.
EBIT recovers to 8.1% of sales by 1985.
Net working capital (excluding cash) equals 13% of sales.
Dividend payout ratio is 55%, and no dividend reductions are allowed.
Net fixed assets equal 40% of sales.
Depreciation is 15% of net fixed assets in the previous year.
SCROLL DOWN FOR EXHIBIT 7 ...

EXHIBIT 7

Financing and Market Rates, 1970-1982

(dollar figures in millions)

GROSS NEW BOND ISSUES BY

INDUSTRIALS:
AAA debt ($)
AA debt ($)
A debt ($)
BBB debt ($)
COMMON AND PREFERRED STOCK ISSUES:
cash offerings ($)
net ($)
cash offering by industrials ($)

1970

1971

MORE -->

1972

1973

1974
1,650
2,415
2,060
440

9,200
6,800
3,500

MATURITY DISTRIBUTION OF NEW

DEBT ISSUES:
Medium term (%)
Long term (%)
INTEREST RATES:

Page 4

13,000
13,500
3,200

13,100
13,000
3,100

11,100
9,100
1,500

7,400
4,300
1,000

245125108.xls.ms_office

90-day commercial paper

New issue AAA debt
New Issue AAA-AA spread
New Issue AAA-BBB spread
S&P 500 price/earnings ratio

7.89%
8.39%
0.26%
1.35%
16.5

5.12%
7.39%
0.12%
1.07%
18

4.63%
7.10%
0.10%
0.71%
18

8.11%
7.42%
0.10%
0.75%
13.4

10.06%
8.57%
0.20%
1.67%
9.4

SCROLL DOWN FOR EXHIBIT 8...

EXHIBIT 8

Projected Financial Results Under Two Financial

Policy Alternatives
MORE -->
1985
1986

20% lower

1983

1984

40% DEBT SCENARIO

Debt/Total Capitalization
Interest Coverage (a)
Earnings per Share ($)
Dividends per Share ($)
Return on total capital
Return on equity
New equity issues ($ million)
Number of Shares sold (millions)

0.36
3.67
4.2
2.38
7.9%
9.0%
0
0

0.371
3.88
4.98
2.74
8.6%
10.1%
0
0

0.397
3.95
6.02
3.31
9.3%
11.5%
0
0

0.4
3.89
6.31
3.56
9.3%
11.5%
704
11.7

0.4
3.86
6.62
3.64
9.2%
11.4%
816
13

25% DEBT SCENARIO

Debt/Total Capitalization
Interest Coverage (a)
Earnings per Share ($)
Dividends per Share ($)
Return on total capital
Return on equity
New equity issues ($ million)
Number of Shares sold (millions)

0.338
3.91
4.13
2.29
7.9%
8.8%
398
9.5

0.314
4.6
4.77
2.49
8.6%
9.8%
686
14.3

0.282
5.57
5.41
2.71
9.3%
10.7%
1306
28.8

0.25
6.23
5.46
2.72
9.3%
10.4%
1783
36.2

0.25
6.17
5.6
2.72
9.2%
10.2%
1271
25.2

Note: Interest coverage is defined as EBIT/interest.

Assumes new shares sold at a P/E ratio of 10.
SCROLL DOWN FOR INSTRUCTIONS...

E.I. DU PONT DE NEMOURS AND COMPANY - 1983

Harvard Business School
Case Software 2-292-709
Copyright (c) 1989 by the President and Fellows of Harvard College.
Developed in conjunction with MicroMentor, Inc., Cambridge, MA.

Page 5

1987

245125108.xls.ms_office

This case was prepared as the basis for class discussion rather than
to illustrate either effective or ineffective handling of an
administrative situation.

SCROLL DOWN FOR LIST OF EXHIBITS...

WORKSHEET NAVIGATION
This worksheet contains the data from the following exhibits:
Exhibit 1:
Exhibit 2:
Exhibit 3:
Exhibit 4:
Exhibit 6:
Exhibit 7:
Exhibit 8:

Selected Financial Data, 1965-1982

Selected Funds Needs Data, 1965-1982
Financial Data for Selected Chemical Companies
Bond Rating Medians for 1979-1981
Financial Projections, 1983-1987
Financing and Market Rates, 1970-1982
Projected Financial Results Under Two Financial
Policies

The first exhibit is located in the A1 position.

To view each succeeding exhibit, use the SCROLL Bar to view the next exhibit

SCROLL DOWN FOR MORE...

OPTIONAL NAVIGATIONAL TECHNIQUE

Each exhibit in this worksheet has been named using the <Formula>
<Define> <Name> commands in Excel. This allows you to easily move
from one section of the worksheet to another. Either of the following
techniques will allow you to move from one exhibit to another.
Click on <Formula> in the menu bar, then select <Go to...> from pulldown menu
A dialog box will appear listing the exhibts
Click on the exhibit you wish to view, then click on <OK>.
OR
You may use the scroll bar or arrow keys to page down through the list
of exhibits if the one you wish to view is not immediately apparent.
SCROLL TO A1 TO GO TO FIRST EXHIBIT...

Page 6

245125108.xls.ms_office

REVISION HISTORY
Date
01/14/87

Name
D. Stenberg

01/18/88

D. Lustiber

01/15/90

G. Tillotson

11/28/1991

J. Royo

6/3/1992

J. Royo

Explanation of Change
Data Resources, Inc., Lexington, MA
Base Implementation
Converted for use with ELAI
Changed all formulas to constants
MicroMentor, Inc., Cambridge, MA.
Converted to MicroMentor format
Harvard Business School, Boston, MA
Converted to Excel
Stripped HBSUTIL

Page 7

245125108.xls.ms_office

1971
3848
644
15
356
9.3%

1972
4366
768
20
414
9.5%

1973
5964
1100
34
586
9.8%

1974
6910
733
62
404
5.8%

1975
7222
574
126
271
3.8%

1976
8361
961
145
459
5.5%

More -->
1977
9435
1141
169
545
5.8%

10.9%
11.5%
$2.44
$1.67
$47.92

12.1%
12.7%
$2.83
$1.82
$54.77

15.1%
16.3%
$4.01
$1.92
$58.13

9.0%
10.7%
$2.73
$1.83
$43.92

6.6%
7.1%
$1.81
$1.42
$35.96

9.7%
11.4%
$3.30
$1.75
$46.42

11.1%
12.6%
$3.69
$1.92
$40.04

13.7%
16.7%
$5.18
$2.42
$39.34

15.1%
18.2%
$6.23
$2.75
$42.63

10.9%
13.1%
$4.73
$2.75
$40.32

$19.60

$19.40

$14.50

$16.10

$19.90

$15.00

$10.90

$7.30

$6.60

$8.40

1978
10584
1470
139
797
7.5%

1979
12572
1646
143
965
7.7%

1980
13652
1209
111
744
5.4%

$2.40
18

$2.61
18

$2.49
13.4

$1.81
9.4

$1.46
10.8

$1.76
10.4

$1.41
9.6

$1.26
8.2

$1.22
7.1

$1.09
8.4

1.95

2.1

1.89

1.34

1.31

1.46

1.33

1.2

1.17

1.26

1971
454

1972
522

1973
727

1974
1008

1975
1036

1976
876

More -->
1977
704

1978
714

1979
864

1980
1297

-39

63

278

561

-122

20

243

341

438

17

169

320

540

259

229

258

230

393

Page 8

245125108.xls.ms_office

0.0%

0.0%

4.2%

6.5%

10.3%

4.6%

4.0%

4.2%

3.5%

5.5%

236
7.1%

240
6.8%

250
6.2%

793
16.2%

889
16.9%

1282
23.0%

1236
21.4%

1058
17.4%

1067
16.1%

1068
14.9%

3095
92.9%

3267
93.2%

3593
89.6%

3782
77.3%

3835
72.8%

4032
72.4%

4315
74.6%

4761
78.4%

5312
80.4%

5690
79.6%

3331
100.0%

3507
100.0%

4012
100.0%

4895
100.0%

5264
100.0%

5573
100.0%

5780
100.0%

6077
100.0%

6609
100.0%

7151
100.0%

42.9

38.4

32.4

11.8

4.6

6.6

6.8

10.6

11.5

10.9

AAA

AAA

AAA

AAA

AAA

AAA

AAA

AAA

AAA

AAA

|----Monsanto----|
1982
6325

|----Celanese----|
1980
1982
3348
3062

11.0%

12.4%

7.4%

9.9%
352
5.6%
8.3%
10.1%
45.2%
8.3
84.7%
24.5%
7.1
AA

8.9%
122
3.6%
9.3%
11.2%
42.7%
6.3
67.0%
40.7%
4.5
A

7.3%
-34
-1.1%
-0.3%
-1.2%
42.7%
6.7
75.7%
42.9%
3.8
BBB

Page 9

245125108.xls.ms_office

More -->

Page 10

245125108.xls.ms_office

More -->

1975

1976

1977

1978

1979

1980

1981

1982

2,875
3,310
5,355
420

700
2,030
2,205
1,010

800
1,125
960
445

275
700
1,310
210

1,550
1,800
1,500
0

1,750
2,900
4,220
345

1,852
2,458
3,887
0

543
3,347
3,075
1,357

11,900
10,500
2,400

13,300
10,300
2,800

14,100
6,800
2,300

14,600
(1,400)
2,900

17,100
(1,900)
3,600

28,600
18,200
10,400

34,400
12,000
11,900

38,700
16,400
9,600

43%
57%

30%
70%

16%
84%

21%
79%

30%
70%

44%
56%

55%
45%

62%
38%

Page 11

245125108.xls.ms_office

6.41%
8.70%
0.27%
2.57%
10.8

5.28%
8.15%
0.17%
1.44%
10.4

5.45%
7.88%
0.09%
0.79%
9.6

7.73%
8.63%
0.14%
0.81%
8.2

10.72%
9.39%
0.22%
1.12%
7.1

12.37%
11.74%
0.44%
1.95%
8.4

1987 with
20% lower
EBIT
0.4
3.09
4.83
--7.4%
8.3%
816
13

0.25
4.94
4.27
--7.4%
7.8%
1271
25.2

Page 12

15.15%
14.30%
0.50%
2.09%
8.5

11.91%
14.14%
0.38%
1.87%
10.4

245125108.xls.ms_office

Page 13

245125108.xls.ms_office

Page 14

245125108.xls.ms_office

1981
22810
2631
476
1081
4.7%

1982
33331
3545
739
894
2.7%

7.5%
10.3%
$5.81
$2.75
$45.88

6.6%
8.2%
$3.75
$2.40
$37.19

$10.00

$9.80

$1.04
8.5

$0.83
10.4

1.22

1.16

1981
2389

1982
3195

2046

-987

445

319

Page 15

245125108.xls.ms_office

2.6%

1.9%

6403
37.0%

5702
33.8%

10458
60.4%

10850
64.3%

17306
100.0%

16871
100.0%

5.5

4.8

AA

AA

Page 16