Case Study – Panera Bread CompanyCase Study Questions:1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statementsa. Include a chart of your financial assumptions.2. Develop a 5 year Financial Forecast (both Balance Sheet and Income Statement)3. Describe three possible financial forecasting processes. Discuss the benefits and limitations of each three methods. Describe why you chose the approach you used in this case study.4. Provide an assessment of the earning quality of Panera Bread in Year 5 of the projected financial statements. 5. Determine the amount of Free Cash Flow Panera has in Year 5 of the projected financial statements. Discuss the importance of Free Cash Flow, and it’s relationship to overall accounting earnings.6. Develop a table of relevant financial ratios for 2007 and Forecast Year 5; discuss the ratios, their change of the forecast period, and the overall performance of Panera Bread in Forecast Year 5. 7. Given the need for external sources of capital, compare and contrast the advantages and disadvantages of external equity, a long-term note payable, and a short-term line of credit. Case Study Assumptions:1. A 5-year financial forecast worksheet has been provided to you on Blackboard.2. Assume all borrowing are a type of debt, no additional equity will be utilized to raise capital3. The share repurchase program DOES occur in 2008; and interest expense is equal to 6% of outstanding debt4. Sales growth is 25% for the first two years; then 5% thereafter. Case Study Analysis Papers grading rubric Grading Criteria Maximum Points CompletedPanera Bread Company’s 2007 forecast financial statements. 5 Describe three possible financial forecasting processes. Discuss the benefits and limitations of each method. Describe why you chose the approach you used in this case study. 10 Develop a 5 year Financial Forecast (Balance Sheet and Income Statement) 25 Provide an assessment of the earning quality of Panera Bread in 2012 of the projected financial statements. 15 Determine the amount of Free Cash Flow in 2012; discuss the importance of Free Cash Flowand its relationship to overall accounting earnings. 15 Analysis of financial ratios; including baseline ratios, their change of the forecast periods, and the overall performance in 2012. 10 Given the need for external sources of capital, compare and contrast the advantages and disadvantages of external equity, a long-term note payable, and a short-term line of credit. 10 Proper spelling, punctuation, and APA Formatting 10 Total 100 Case Study Analysis Paper Format Individuals and the weekly workgroup will write a detailed report on the 5 cases. Each workgroup should submit only one report. Individual and Workgroup reports are submitted via Blackboard. (all workgroup members will earn the same grade on the assignment). The report has to contain the following three parts: (1) Executive summary: One page, double-space (APA Format)(2) Case analysis: Each report should include 4-6 pages of analysis (APA Format) with references to an unlimited number of tables, figures, and notes attached as appendices. The written analysis must be concise, if your written analysis section exceeds 6 pages, only the first 6 pages will be graded. The cover page, the executive summary, and the appendices do not count towards the 4-6 pages of analysis. Your report should address the suggested questions for the case, but students are strongly encouraged to address additional points believed to be important for the analysis.Submission Deadlines Written case analyses are due before the start of class on the assigned due date.What Are the “Right Answers” to Cases? It should be noted that there are usually no absolute right solutions for study cases. Rather, the best cases are deliberately written to be ambiguous. While there are no right answers, there are good arguments and bad arguments. This course is designed to help the student learn to distinguish between sensible and weak arguments, but not to provide detailed answers to specific cases. Thus, “case solutions” will not be handed out, though I will provide you with “suggested solutions”. If you are uncomfortable with ambiguity, this class may not be for you.