Brooks Plumbing Products Incorporated (BPP) manufactures plumbing fixtures and other home improvement products that are sold in Home Depot and Walmart as well as hardware stores. BPP has a solid reputation for providing value products, good quality, and a good price. The company has been approached by an investment banking firm representing a third company, Garden Specialties Incorporated (GSI), that is interested in acquiring BPP. The acquiring firm (GSI) is a retailer of garden supplies; it sees the potential synergies of the combined firm and is willing to pay BPP shareholders $37 cash per share for their stock, which is greater than the current stock price; the stock has traded at about $34 in recent months. Summary financial information about BPP follows. BROOKS PLUMBING PRODUCTS INCORPORATED Selected Financial Information For the Years Ended December 31 Cash Accounts receivable Inventory Long-lived assets Gross book value Net book value Replacement cost Liquidation value Current liabilities 2022 2022 $ 79,949,778 56,808,465 39,695,416 2021 $ 3,486,227 87,327,771 Industry Average 59,916,645 167,308,377 143,808,377 100,650,809 95,917,302 170,617,409 68,764,002 188,495,338 67,365,209 119,075,766 121,028,274 32,027,364 37,918,302 Shareholders' equity 125,971,338 87,671,369 23,530,000 13,020,336 667,834,771 639,076,465 498,807,788 477,641,001 102,697,355 134,795,229 38% 38% 38.00% 18,796,493 2,780,000 15,694,254 1,280,000 $ 23.29 23,063,554 Long-term debt Capital expenditures Sales Cost of sales Operating expense* Income tax rate Depreciation expense Dividends Year-end stock price Number of outstanding shares Sales multiplier Free cash flow multiplier Earnings multiplier Cost of capital Accounts receivable turnover Inventory turnover Current ratio Quick ratio Cash flow ratio Free cash flow ratio Gross margin percentage Return on assets (net book value) Return on equity Earnings per share $ 36.08 25,989,554 *Operating expense includes depreciation expense. 1.60 8.70 13.20 5.5% 5.5% 5.80 8.50 1.70 1.20 1.60 1.20 33.0% 18.0% 28.0% $ 2.35