Question - The Pep Boys: Manny, Moe & Jack, is a full-service and tire automotive aftermarket chain. The first store, originally named Pep Auto Suppliers, was founded in Philadelphia in 1921. Pep Boys operates nearly 800 stores and approximately 7,400 service bays in 35 states and Puerto Rico and employs nearly 20,000. Along with its full-service vehicle maintenance and repair capabilities, the company also serves the commercial auto parts delivery market. It is one of the leading sellers of replacement tires in the United States, and in 2005 was named one of the 500 fastest-growing U.S. Companies. The company went public in 1945 and was recently purchased by Icahn Enterprises Holdings.
1. How would you forecast the revenue of Pep Boys?
2. What information would you want to be able to best forecast the revenue of Pep Boys for the next five years and why?
3. What risk do you see in the revenue forecast, that is, how accurate do you think your forecast is likely to be?