and 2017. What can you con 3. (16 points) Prepare a statement of cash flows for Egon Castle Corp for the year ending December 31, 2016. See template on next page. Egon Castle's 2016 income statement revealed sales of $1,400,000, EBITDA margin of 18%; interest expense of $22,000, and an effective tax rate of 24%. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash. Comparative balance sheets for Egon Castle follow. 2016 2015 (All Amounts in 000s) Assets Cash Accounts receivable Inventories Prepaids Land Building and equipment Less: Accumulated depreciation Total assets xoox $ 470,000 180,000 70,000 240.000 280,000 12.000 250.000 250,000 1,500,000 1,300,000 (205,000) (175,000) Yoox $ 2.208,300 $ xox 11.000 24,000 92.000 15,000 Xocx Liabilities Accounts payable Accrued liabilities Income taxes payable Stockholders' equity Common stock Paid in capital in excess of par Retained earnings Total liabilities and equity 610,000 990,000 640,000 $ 2,600,000 700,000 800,000 585,350 xox Page 2 of 10 2. (pod ended July 10 There were 5,098 approximate net income, did Det income Basic Eng 2.84 X 500gr 114,47130 Million and 2017 What can Egon Castle Corp Statement of Cash Flows (Indirect Approach) For the year ending December 31, 2016 Cash flows from operating activities: Net income 129.ouo Add (deduct) noncash effects on operating income Depreciation expense 30OU Change in accounts receivable C110. 0 Change in inventory 40, 00 Change in prepaid insurance 1300 Change in accounts payable Change in accrued liabilities Change in income taxes payable Net cash provided by operating activities 326.350 293,550 C4 cup Cash flows from investing activities: Purchase of equipment Net cash used by investing activities C200,000) C250.000 Cash flows from financing activities: Proceeds from issuing stock Dividends on common Net cash provided by financing activities Net change in cash Cash balance at January 1, 2016 Cash balance at December 31, 2016 tico, (13,3 eng 27.050 153,350 70,000 623,350 Page 3 of 10 ed average Aug. artstand Eps x .. illion 14,496 30 Page 1 of 10 Colected Financial Data Calculate the dividend payout ratio for the last 5 Refer to the selected financial statements and notes on pages 7-10 4. 16 points) Calculate quality of earnings ratio for 2019, 2018 and 2017. What can you conclude from your calculations? 2ota 2014 5. (10 points) Using inputs solely from the cash flow statement, calculate the company's FCF for 2019 6. (6 points) Using a market cap of $48.28, and assuming a cost of equity of 11%, calculate the long term growth rate that is implied by the company's valuation. 7. (12 points) Calculate the company's EBITDA, EBITDA margin and EBITDA multiple. EDTTDA Margin-21BITDA EBITDA HUEV Jet sales @BITC 0.18 = EBITDA 7,400,000 EBITDA - 1252.000 8. (4 points) How does this multiple compare to the industry average? Quantify your answer. (You have to make an educated guess at this company's industry) Page 4 of 10 n Million outstan 4 x 5008 1,498 32 nem Selected Financial Data Selected Financial Data 2016 Om , except per share data) 2019 77,1305 78,112 74,433 Total revenue 71.7853 72.714 59.414 70 271 73,717 74 494 Net Earnings Congens Disconnections 2030 331 3.281 2.914 Bas Earnings Per Share Continuing operations 5.54 0.01 5.32 473 Base earings per share Diluted Earnings Per Share Continuing operations Deconnued operations Dikud ange per share 5.50 AS 4.58 0.12 0.07 531 2.20 Canh didende declared per share 7. Cash and Cash Equivalents Cash equivalents include highly liquid investments with an orginal maturity of three months or less from the time of purchase Cash equivalents also include amounts due from third-party financial s for credit and debit card transactions. These receivables typically settle in five days or less February 2 2010 February 1, 2020 320 1.810 441 $ 359 789 Cash and Cash Equivalents millions) Cash Short-term investments Receivables from third-party financial institutions for credit and debit card transactions Cash and cash equivalents $ We have access to these funds without any significant restrictions, taxes or penaties 2577 1.558 As of February 1, 2020 and February 2, 2019, we reclassified book overdrafts of $200 milion and 5242 milion respectively, to Accounts Payable and $23 million and $25 million, respectively, to Accrued and Other Current Liabilities Page 10 of 10 Page 3 of av outstand asquiat Systems Inc 30, 2018: Basic emines pel ere 5,098 million weighted average amate net income, did the company report me Basic EOSAO 2.84 x 5008 Hillion 114,490 32 million Page 1 of 10 9. (6 points) Refer to item 6 Selected Financial Data Calculate the dividend payout ratio for the last 5 years 10. (2 points) Calculate the current dividend yield based on a stock price of $96. 11. (3 points) Calculate the Company's PE, 12. (6 points) Calculate the gross margin for the past 3 years, Page 5 of 10 Page 3 of 10 and 2017. What can you con 3. (16 points) Prepare a statement of cash flows for Egon Castle Corp for the year ending December 31, 2016. See template on next page. Egon Castle's 2016 income statement revealed sales of $1,400,000, EBITDA margin of 18%; interest expense of $22,000, and an effective tax rate of 24%. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash. Comparative balance sheets for Egon Castle follow. 2016 2015 (All Amounts in 000s) Assets Cash Accounts receivable Inventories Prepaids Land Building and equipment Less: Accumulated depreciation Total assets xoox $ 470,000 180,000 70,000 240.000 280,000 12.000 250.000 250,000 1,500,000 1,300,000 (205,000) (175,000) Yoox $ 2.208,300 $ xox 11.000 24,000 92.000 15,000 Xocx Liabilities Accounts payable Accrued liabilities Income taxes payable Stockholders' equity Common stock Paid in capital in excess of par Retained earnings Total liabilities and equity 610,000 990,000 640,000 $ 2,600,000 700,000 800,000 585,350 xox Page 2 of 10 2. (pod ended July 10 There were 5,098 approximate net income, did Det income Basic Eng 2.84 X 500gr 114,47130 Million and 2017 What can Egon Castle Corp Statement of Cash Flows (Indirect Approach) For the year ending December 31, 2016 Cash flows from operating activities: Net income 129.ouo Add (deduct) noncash effects on operating income Depreciation expense 30OU Change in accounts receivable C110. 0 Change in inventory 40, 00 Change in prepaid insurance 1300 Change in accounts payable Change in accrued liabilities Change in income taxes payable Net cash provided by operating activities 326.350 293,550 C4 cup Cash flows from investing activities: Purchase of equipment Net cash used by investing activities C200,000) C250.000 Cash flows from financing activities: Proceeds from issuing stock Dividends on common Net cash provided by financing activities Net change in cash Cash balance at January 1, 2016 Cash balance at December 31, 2016 tico, (13,3 eng 27.050 153,350 70,000 623,350 Page 3 of 10 ed average Aug. artstand Eps x .. illion 14,496 30 Page 1 of 10 Colected Financial Data Calculate the dividend payout ratio for the last 5 Refer to the selected financial statements and notes on pages 7-10 4. 16 points) Calculate quality of earnings ratio for 2019, 2018 and 2017. What can you conclude from your calculations? 2ota 2014 5. (10 points) Using inputs solely from the cash flow statement, calculate the company's FCF for 2019 6. (6 points) Using a market cap of $48.28, and assuming a cost of equity of 11%, calculate the long term growth rate that is implied by the company's valuation. 7. (12 points) Calculate the company's EBITDA, EBITDA margin and EBITDA multiple. EDTTDA Margin-21BITDA EBITDA HUEV Jet sales @BITC 0.18 = EBITDA 7,400,000 EBITDA - 1252.000 8. (4 points) How does this multiple compare to the industry average? Quantify your answer. (You have to make an educated guess at this company's industry) Page 4 of 10 n Million outstan 4 x 5008 1,498 32 nem Selected Financial Data Selected Financial Data 2016 Om , except per share data) 2019 77,1305 78,112 74,433 Total revenue 71.7853 72.714 59.414 70 271 73,717 74 494 Net Earnings Congens Disconnections 2030 331 3.281 2.914 Bas Earnings Per Share Continuing operations 5.54 0.01 5.32 473 Base earings per share Diluted Earnings Per Share Continuing operations Deconnued operations Dikud ange per share 5.50 AS 4.58 0.12 0.07 531 2.20 Canh didende declared per share 7. Cash and Cash Equivalents Cash equivalents include highly liquid investments with an orginal maturity of three months or less from the time of purchase Cash equivalents also include amounts due from third-party financial s for credit and debit card transactions. These receivables typically settle in five days or less February 2 2010 February 1, 2020 320 1.810 441 $ 359 789 Cash and Cash Equivalents millions) Cash Short-term investments Receivables from third-party financial institutions for credit and debit card transactions Cash and cash equivalents $ We have access to these funds without any significant restrictions, taxes or penaties 2577 1.558 As of February 1, 2020 and February 2, 2019, we reclassified book overdrafts of $200 milion and 5242 milion respectively, to Accounts Payable and $23 million and $25 million, respectively, to Accrued and Other Current Liabilities Page 10 of 10 Page 3 of av outstand asquiat Systems Inc 30, 2018: Basic emines pel ere 5,098 million weighted average amate net income, did the company report me Basic EOSAO 2.84 x 5008 Hillion 114,490 32 million Page 1 of 10 9. (6 points) Refer to item 6 Selected Financial Data Calculate the dividend payout ratio for the last 5 years 10. (2 points) Calculate the current dividend yield based on a stock price of $96. 11. (3 points) Calculate the Company's PE, 12. (6 points) Calculate the gross margin for the past 3 years, Page 5 of 10 Page 3 of 10