Scotts Miracle-Gro is the worlds leading supplier and marketer of do it yourself lawn and garden products; it is located in Marysville, Ohio. Although Scotts

Question

63 users unlocked this solution today!

Scotts Miracle-Gro is the world€™s leading supplier and marketer of do it yourself lawn and garden products; it is located in Marysville, Ohio. Although Scotts dominates many of its chosen markets, its profit margins are mediocre. Use the following information on Scotts and five other similar companies to value Scotts€™ common stock on November 1, 2007.

Scotts Miracle-Gro s millions) 113.4 63.9 156 Net income Number of common shares (millions) Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt 40% 479.3 1,118 Scotts Miracle-Gro Garden & Pet Holdings Brands Clark Rubbermaid Centra Eergizer Fortune Kimberly Newell Comparison of Scotts Miracle-Gro with Comparable Companies 5-year growth rate in sales (%) 5-year growth rate in EPS (%) Analysts' projected growth (%" Interest coverage ratio (X) Total liabilities to assets (X) Total assets millions) 9.8 6.1 10.3 2.7 0.79 2,277 9.2 (20.2) NA 2.1 0.53 1,647 7.5 11.5 0.73 3,55315,055 18,324 14.1 21.1 13.5 5.8 (3.0) 3.1 9.3 6.5 0.67 6,591 0.82 0.65 Indicators of Value 21.5 18.2 0.3 0.7 0.7 0.7 16.9 17.8 Price/earnings (X MV firm/EBIT1 Tax rate(X MV equity sales (X) MV firm/sales (X) MV equity BV equity ix) MV firm/BV firm (X) 19.1 15.3 17.1 16.8 16.5 20.2 2.3 2.2 2.2 2.4 2.0