Question

What do you think Ferrari is worth in Euros? Justify your recommendation based on current market multiples valuation and a DCF valuation.

		2012	2013	2014		First Half 2015
	Sales
	Cars and Spare Parts (1)	1,695	1,655	1,944		1,007
	Engines (2)	77	188	311		121
	Sponsorship, Commercial and Brand (3)	385	412	417		212
	Other (4)	69	80	91		46
	Total Sales	2,225	2,335	2,762		1,387
	Cost of Sales excluding Dep. and Amort.	961	964	1,217		592
	Depreciation and Amortization Expense	238	270	289		130
	Selling, General, and Admin. Expense	243	260	300		152
	Research and Development	431	479	541		291
	Other Operating Expense	17	-2	26		4
	Operating Income (EBIT)	335	364	389		218
	Net Financial Income (Expense)	-1	3	9		-27
	Profit before Tax	335	366	398		191
	Income Tax Expense	101	120	133		65
	Net Profit	233	246	265		126
	Capital Expenditures	258	271	330		151

Answer 1

3