Question
CBAD Corporation Income Statement 2015 2016 Sales $1,000.00 $1,200.00 Cost of goods sold 600.00 590.00 Gross profit $400.00 $610.00 SGA expenses 150.00 170.00 Depreciation expense
CBAD Corporation
Income Statement
2015
2016
Sales
$1,000.00
$1,200.00
Cost of goods sold
600.00
590.00
Gross profit
$400.00
$610.00
SGA expenses
150.00
170.00
Depreciation expense
50.00
60.00
EBIT
$200.00
$380.00
Interest
15.00
14.00
EBT
$185.00
$366.00
Taxes
74.00
146.40
Net Income
$111.00
$219.60
Dividends
66.60
109.60
Add'n to R.E.
$44.40
$110.00
Balance Sheet
Cash
$100.00
$180.00
Receivables
250.00
260.00
Inventories
350.00
330.00
Total current assets
$700.00
$770.00
Gross property, plant, and equip.
$375.00
$495.00
Accumulated depreciation
75.00
135.00
Net property, plant, and equip.
$300.00
$360.00
Total assets
$1,000.00
$1,130.00
Accounts Payable
$100.00
$105.00
Accrued Expenses
50.00
55.00
Notes Payable
200.00
210.00
Total Liabilities
$350.00
$370.00
Common stock
150.00
150.00
Retained earnings
500.00
610.00
Total Liab. & Equity
$1,000.00
$1,130.00
*All values are in millions
In 2016, a relevant benchmark for CBAD corporation is found to have the following values:
P/E = 12.5
P/S = 2.4
P/B = 3.9
P/OCF = 9.1
Calculate the estimated price for CBAD Corporation using the Valuation by Comparables and assuming that CBAD has 85 million shares outstanding.
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Financial Management Core Concepts
Authors: Raymond M Brooks
3rd edition
133866696, 978-0133866698
