Buffalo Wings Bwld

2/5/2011

|Business Analysis for Financial Statements, FINC 664 | Amanda Robertson |

Table of Contents

Executive Summary- Buffalo Wild Wings, Inc. (BWLD) 3

Buffalo Wild Wings, Inc.: Background 4

Business Mission 4

Products and Services 4

Major Markets and Customers 4

History of BWLD 4

Strategy of the Organization 5

Accounting Policies 5

Revenue Recognition 5

Inventories 6

Accounts Receivable 6

Cost of Goods Sold 6

Capitalizing Assets 6

Accounting Policy Changes 7

Financial Analysis- Part 1 7

Income Statement Review 7

Balance Sheet Review 8

Key Performance Ratios 8

Cash Flow Analysis 9

Financial Analysis Part II 9

Competition 9

Management Compensation 10

Major Fixed Costs 10

Major Variable Costs 10

Dupont Analysis (Appendix 1.5) 11

WACC 11

Economic Value Added (Appendix 1.6) 11

Forecasted Free Cash Flow Valuation (Appendix 1.7) 12

Assumptions 12

Results of PV of Free Cash Flow 13

Market Multiple Valuation (Appendix 1.8) 13

Recommendation and Conclusion 14

APPENDIX 15

ENDNOTES 22

Executive Summary- Buffalo Wild Wings, Inc. (BWLD)

Recommendation- BUY Current Price- $47 Target Price- $70

Market Cap- $858million P/E Ratio- 28 Beta- .90

WACC- 9.36% Terminal Growth Rate- 5% ROE- 14.62%

BWLD Overview: Buffalo Wild Wings, Inc. (“BWLD”, NASDAQ) is a popular national restaurant chain that owns, operates, and franchises casual dining restaurants focused on tasty chicken wings, a full bar and a friendly sports bar atmosphere. BWLD was started in 1982 near Ohio State University by Jim Disbrow and Scott Lowery. Buffalo Wild Wings’ mission is “To WOW People Every Day” by being guest driven, team focused, community connected and dedicated to excellence.[i] As of December 27, 2009 there are 14,000 employees working in 652 national restaurant locations in 42 states, where 232 of them are company-owned and 420 of...