24. Keokuk Corp. had the following operating results for 2021 & 2020. Keokuk paid dividends of $100,000 per year for both years and made capital expenditures of $45,000 in both years. The company's stock price in 2021 was $12.00 and $10.00 in 2020. In 2021, the industry average earnings multiple was 10, the free cash flow multiple was 20 and sales multiple was 2.00. The company is publicly owned and has 1,050,000 shares of outstanding stock at the end of 2021. 2021 Cash Accounts Receivable Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity Balance Sheet, Dec 31, 2020 $ 489,350 $ 125,000 $ 315,000 $ 400,000 $ 225,000 $ 375,000 $ 1,029,350 $ 900,000 2,345,000 2,350,000 $ 3,374,350 $ 3,250,000 $ 285,000 $ 315,000 600,000 800,000 2,489,350 2,135,000 $ 3,347,350 $ 3,250,000 Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes Net Income Income Statement, for year ended Dec 31, 2021 2020 $ 3,775,000 $ 3,555,000 2,554,000 2,445,000 1,221,000 1,110,000 522,000 445,000 699,000 655,000 244,650 232,750 $ 454,350 $ 432,250 2020 $ 432,250 50,000 Cash Flow From Operations Net Income Plus Depreciation Expense + Decrease (-inc) in AccRec. and Inv. + Increase (-dec) in ur. Liabl. Cash Flow from Operations 2021 $ 454,350 50,000 (235,000) (30,000) $ 709,350 $ 482,250 24. (10 points) Using the data and information from the previous page, calculate the following for Keokuk Corp. a. Calculate the 2021 value of the company using the earnings multiple. b. Calculate the 2021 value of the company using the free cash flow multiple C. Calculate the 2021 book value of the company's equity. d. Calculate the 2021 market value of the company. e. Compare Keokuk's Equity Book Value (c.) to the Market Value (d.). Discuss conceptually (not differences in the numerical calculations) the difference between these two amounts. 24. Keokuk Corp. had the following operating results for 2021 & 2020. Keokuk paid dividends of $100,000 per year for both years and made capital expenditures of $45,000 in both years. The company's stock price in 2021 was $12.00 and $10.00 in 2020. In 2021, the industry average earnings multiple was 10, the free cash flow multiple was 20 and sales multiple was 2.00. The company is publicly owned and has 1,050,000 shares of outstanding stock at the end of 2021. 2021 Cash Accounts Receivable Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity Balance Sheet, Dec 31, 2020 $ 489,350 $ 125,000 $ 315,000 $ 400,000 $ 225,000 $ 375,000 $ 1,029,350 $ 900,000 2,345,000 2,350,000 $ 3,374,350 $ 3,250,000 $ 285,000 $ 315,000 600,000 800,000 2,489,350 2,135,000 $ 3,347,350 $ 3,250,000 Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes Net Income Income Statement, for year ended Dec 31, 2021 2020 $ 3,775,000 $ 3,555,000 2,554,000 2,445,000 1,221,000 1,110,000 522,000 445,000 699,000 655,000 244,650 232,750 $ 454,350 $ 432,250 2020 $ 432,250 50,000 Cash Flow From Operations Net Income Plus Depreciation Expense + Decrease (-inc) in AccRec. and Inv. + Increase (-dec) in ur. Liabl. Cash Flow from Operations 2021 $ 454,350 50,000 (235,000) (30,000) $ 709,350 $ 482,250 24. (10 points) Using the data and information from the previous page, calculate the following for Keokuk Corp. a. Calculate the 2021 value of the company using the earnings multiple. b. Calculate the 2021 value of the company using the free cash flow multiple C. Calculate the 2021 book value of the company's equity. d. Calculate the 2021 market value of the company. e. Compare Keokuk's Equity Book Value (c.) to the Market Value (d.). Discuss conceptually (not differences in the numerical calculations) the difference between these two amounts
