MS final round interview question: DCF me a typical starbucks down the street!

Hi guys,

a friend of mine got this final round interview question at MS, which I find quite though - I would be glad if anyone would give it a try:

"Let's say we want to value the Starbucks down the street (ie it has about 2000 square feet or 180 square meters of size, one cashier, middle of business district where MS offices are) - please guide me through and calculate a DCF with me"

Ie this is a mix of a consulting case question and a technical paper DCF question - first one has to assume what the P&L is and the base basic DCF calcs on that.

For this one has to also arrive at a WACC and have some understanding of typical Restaurant margins.

Any ideas?

Best,

P

2 Comments
 

One more Thing, the tricky part is also that you have to demonstrate the capability to calculate everything in your head! So when trying to solve this question, one should be prepared to make some assumptions that are easy to work with, but not to easy (ie multiplying everything with 10 etc.) ...

 

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