Balance Sheet Assets Current Assets Cash 50 Accounts receivable 22 Inventories 17 Total current assets 89 Liabilities Current Liabilities Accounts payable 42 Notes payable short-term debt 7 Total current liabilities 49 128 128 177 33 210 Long-Term Assets Long-Term Liabilities Net property, plant and equipment 121 Long-term debt Total long-term assets 121 Total long-term liabilities Total Liabilities Stockholders' Equity Total Liabilities and Total Assets 210 Stockholders' Equity Income Statement Total sales 312 Cost of sales -210 Gross Profit 102 Selling general and administrative expenses -34 Research and development -10 Depreciation and amortization -5 Operating Income 53 Other income Earnings before interest and taxes (EBIT) 53 Interest income (expense) -20 Pretax income 33 Taxes Net Income Refer to the income statement and the balance sheet above. Assume all data is in 5 million. If the company has 5 million shares outstanding trading at $23.60 each on stock exchange, what is your estimate of EV-to-EBITDA (Enterprise Value / EBITDA)? O 2.0 3.5 3.2 2.7 Corvex Corporation Consolidated Income Statement Year ended December 31 (in Smillions) 2016 Total sales 610.1 Cost of sales -5002 Gross profit 1099 Selling, general, and administrative expenses -40.5 Research and development -24.6 Depreciation and amortization -3.6 Operating income 41.2 Other income Earnings before interest and taxes (EBIT) 41.2 Interest income (expense) -25.1 Pretax income 16.1 Taxes -5.5 10.6 2015 5649 -3605 2044 -40.5 -23,5 -3.4 137.0 1370 - 14.3 122.7 -42.9 79.8 Net income Consider the above Income Statement for Corvex Corporation. Calculate the gross margin for 2015 and 2016. What does the change in the gross margin between these two years imply about the company? The efficiency of Corvex Corporation has significantly risen between 2015 and 2016, o Corvex Corporation is less likely to be able to cover its short-term liabilities with immediate funds in 2016 when compared to 2015, The ability of Corvex Corporation to sell its goods and services for more than the costs of producing them fell between 2015 and 2016, The leverage of Corvex Corporation fell slightly between 2015 and 2016 The ability of Corvex Corporation to sell its goods and services for more than the costs of producing them rose between 20-5 and 2016. Balance Sheet Assets Current Assets Cash 50 Accounts receivable 22 Inventories 17 Total current assets 89 Liabilities Current Liabilities Accounts payable 42 Notes payable short-term debt 7 Total current liabilities 49 128 128 177 33 210 Long-Term Assets Long-Term Liabilities Net property, plant and equipment 121 Long-term debt Total long-term assets 121 Total long-term liabilities Total Liabilities Stockholders' Equity Total Liabilities and Total Assets 210 Stockholders' Equity Income Statement Total sales 312 Cost of sales -210 Gross Profit 102 Selling general and administrative expenses -34 Research and development -10 Depreciation and amortization -5 Operating Income 53 Other income Earnings before interest and taxes (EBIT) 53 Interest income (expense) -20 Pretax income 33 Taxes Net Income Refer to the income statement and the balance sheet above. Assume all data is in 5 million. If the company has 5 million shares outstanding trading at $23.60 each on stock exchange, what is your estimate of EV-to-EBITDA (Enterprise Value / EBITDA)? O 2.0 3.5 3.2 2.7 Corvex Corporation Consolidated Income Statement Year ended December 31 (in Smillions) 2016 Total sales 610.1 Cost of sales -5002 Gross profit 1099 Selling, general, and administrative expenses -40.5 Research and development -24.6 Depreciation and amortization -3.6 Operating income 41.2 Other income Earnings before interest and taxes (EBIT) 41.2 Interest income (expense) -25.1 Pretax income 16.1 Taxes -5.5 10.6 2015 5649 -3605 2044 -40.5 -23,5 -3.4 137.0 1370 - 14.3 122.7 -42.9 79.8 Net income Consider the above Income Statement for Corvex Corporation. Calculate the gross margin for 2015 and 2016. What does the change in the gross margin between these two years imply about the company? The efficiency of Corvex Corporation has significantly risen between 2015 and 2016, o Corvex Corporation is less likely to be able to cover its short-term liabilities with immediate funds in 2016 when compared to 2015, The ability of Corvex Corporation to sell its goods and services for more than the costs of producing them fell between 2015 and 2016, The leverage of Corvex Corporation fell slightly between 2015 and 2016 The ability of Corvex Corporation to sell its goods and services for more than the costs of producing them rose between 20-5 and 2016