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Case Study: "Green Zebra": Notes

Green Zebra is considering expanding its grocery store business either to Portland with one additional store or to Seattle with three or more stores. The case study document provides questions to analyze Green Zebra's historical performance, forecast financial statements for a one-store Portland expansion, calculate a discount rate for evaluating a three-store Seattle expansion, assess the risk and attractiveness of the Seattle expansion, forecast financials for the Seattle expansion, and make a recommendation for which expansion option Green Zebra should pursue.

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Flora Papastf
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491 views1 page

Case Study: "Green Zebra": Notes

Green Zebra is considering expanding its grocery store business either to Portland with one additional store or to Seattle with three or more stores. The case study document provides questions to analyze Green Zebra's historical performance, forecast financial statements for a one-store Portland expansion, calculate a discount rate for evaluating a three-store Seattle expansion, assess the risk and attractiveness of the Seattle expansion, forecast financials for the Seattle expansion, and make a recommendation for which expansion option Green Zebra should pursue.

Uploaded by

Flora Papastf
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Case Study: “Green Zebra”

After reading the “Green Zebra” Case study you are required to answer to the
following questions:

1. Evaluate the historical performance of Green Zebra as compared to


industry peers and against its own forecasts. What do you conclude? How
comfortable are you with the forecasts?

2. Assuming a 1-store Portland expansion, forecast Green Zebra’s year-end


income statement and balance sheet, assuming no new financing. Use a
‘plug’ for external funding needs (EFN) to balance the balance sheet and
hold financing at 2019 levels. Estimate external financing needed over the
2020-2025 period.

3. Prepare a discount rate for Green Zebra to use in evaluating the 3+ store
expansion to Seattle. How confident are you in using peer data?

4. Is Green Zebra’s investment in a 3-store expansion attractive? How risky


is it?

5. Assuming a 3-store expansion, how do Green Zebra’s year-end income


statement and balance sheet change due to the expansion? Holding
financing elements constant, estimate the level of external financing
needed over the 2020-2025 period? How does this amount compare to the
1-store expansion?

6. What is your recommendation - should Green Zebra expand to Seattle (3


or more stores) or Portland (1-store)? Specify your criteria and provide
your evaluation of the growth options accordingly when framing your
decision.

Notes:
 You must show analytically how you have estimated all the inputs you
need along with any assumptions that you have made.

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