16. Beagle Corp. had the following operating results for 2020 & 2019. Beagle Corp. paid dividends of $50,000 per year for both years and made capital expenditures of $100,000 in both years. The company's stock price in 2019 was $4.00 and $4.50 in 2020. In 2020, the industry average earnings multiple was 10 and the free cash flow and sales multiples were 16 and 1.35, respectively. The company is publicly owned and has 1,400,000 shares of outstanding stock at the end of 2020. Cash Accounts Receivable Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt reholder Equity Balance Sheet, Dec 31, 2020 2019 $ 267,000 $ 100,000 $ 525,000 $ 400,000 $ 450,000 $ 300,000 $ 1,242,000 $ 800,000 1,205,000 1,100,000 $ 2,447,000 $ 1,900,000 $ 500,000 $ 300,000 600,000 500,000 1,347,000 1,100,000 Total Debt and Equity $ 2,447,000 $ 1,900,000 Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes Income Statement, for year ended Dec 31, 2020 2019 $ 6,250,000 $ 5,450,000 5,125,000 4,400,000 1,125,000 1,050,000 580,000 550,000 545,000 500,000 218,000 200,000 $ 327,000 $ 300,000 Net Income 2019 $ 300,000 125,000 Cash Flow From Operations Net Income Plus Depreciation Expense + Decrease (-inc) in AccRec. and Inv. + Increase (-dec) in Cur. Liabl. Cash Flow from Operations 2020 $ 327,000 125,000 (275,000) 200,000 $ 377,000 $ 425,000 (10 points) Using the data and information from the previous page, calculate the following for Beagle Corp. a. Calculate the 2020 value of the company using the earnings multiple. b. Calculate the 2020 value of the company using the free cash flow multiple c. Calculate the 2020 book value of the company's equity. d. Calculate the 2020 market value of the company. e. Compare Beagle's Equity Book Value (c.) to the Market Value (d.). Discuss conceptually (not differences in the calculations) the difference between these two amounts. 16. Beagle Corp. had the following operating results for 2020 & 2019. Beagle Corp. paid dividends of $50,000 per year for both years and made capital expenditures of $100,000 in both years. The company's stock price in 2019 was $4.00 and $4.50 in 2020. In 2020, the industry average earnings multiple was 10 and the free cash flow and sales multiples were 16 and 1.35, respectively. The company is publicly owned and has 1,400,000 shares of outstanding stock at the end of 2020. Cash Accounts Receivable Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt reholder Equity Balance Sheet, Dec 31, 2020 2019 $ 267,000 $ 100,000 $ 525,000 $ 400,000 $ 450,000 $ 300,000 $ 1,242,000 $ 800,000 1,205,000 1,100,000 $ 2,447,000 $ 1,900,000 $ 500,000 $ 300,000 600,000 500,000 1,347,000 1,100,000 Total Debt and Equity $ 2,447,000 $ 1,900,000 Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes Income Statement, for year ended Dec 31, 2020 2019 $ 6,250,000 $ 5,450,000 5,125,000 4,400,000 1,125,000 1,050,000 580,000 550,000 545,000 500,000 218,000 200,000 $ 327,000 $ 300,000 Net Income 2019 $ 300,000 125,000 Cash Flow From Operations Net Income Plus Depreciation Expense + Decrease (-inc) in AccRec. and Inv. + Increase (-dec) in Cur. Liabl. Cash Flow from Operations 2020 $ 327,000 125,000 (275,000) 200,000 $ 377,000 $ 425,000 (10 points) Using the data and information from the previous page, calculate the following for Beagle Corp. a. Calculate the 2020 value of the company using the earnings multiple. b. Calculate the 2020 value of the company using the free cash flow multiple c. Calculate the 2020 book value of the company's equity. d. Calculate the 2020 market value of the company. e. Compare Beagle's Equity Book Value (c.) to the Market Value (d.). Discuss conceptually (not differences in the calculations) the difference between these two amounts
