Nantucket Nectars Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Nantucket Nectars Case Solution

Introduction & Problem Statement

Nantucket Nectars was founded by Tom Scott and Tom in 1990. Tom Scott and Tom first met at Brown University. In the following summer, the two joined four others and created a convenient floating store at Nantucket Harbor.

It is expected that the management of the company is facing the problem of valuation and the management of the company is expecting that Beverage Industry is a continuously growing industry and a number of larger competitors like Coke, Pepsi, Seagrams are entering in to the market.

Valuation with DCF

By using these forecasted earnings and assuming the tax rate is 12%, after tax profit is identified.Nantucket Nectar Case Solution

In order to identify the capital expenditure and net working capital changes, certain assumptions have been used such as the 4% of sales of each year will be considered as the capital expenditure of each projected year, by incorporating the capital expenditure, net working capital changes and depreciation, free cash flows for each projected year are identified.

In order to identify the enterprise value on the basis of free cash flows, the discounted free cash flows are used as identifying discounted future cash flows would provide more appropriate estimate of the value of the firm. ....................

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