Question
Consider recent financials for Ellie's Essentials LLC: Balance Sheet 2020 2019 Current Assets $11,330.00 $10,000.00 Net PPE $31,000.00 $30,000.00 Total Assets $42,330.00 $40,000.00 Current Liabilities
Consider recent financials for Ellie's Essentials LLC:
Balance Sheet
| 2020 | 2019 | |
|---|---|---|
| Current Assets | $11,330.00 | $10,000.00 |
| Net PPE | $31,000.00 | $30,000.00 |
| Total Assets | $42,330.00 | $40,000.00 |
| Current Liabilities | $8,919.00 | $8,000.00 |
| Long-term debt | $13,763.00 | $12,000.00 |
| Total Liabilities | $22,682.00 | $20,000.00 |
| Shareholder Equity | $19,648.00 | $20,000.00 |
| Liabilities and Equity | $42,330.00 | $40,000.00 |
| Income Statement | 2020 | 2019 |
|---|---|---|
| SALES | $11,000.00 | $10,000.00 |
| COGS | $4,400.00 | $4,000.00 |
| GROSS PROFIT | $6,600.00 | $6,000.00 |
| S&A | $1,100.00 | $1,000.00 |
| Depreciation | $550.00 | $500.00 |
| EBIT | $4,950.00 | $4,500.00 |
| INTEREST | $1,272.00 | $1,200.00 |
| EBT | $3,678.00 | $3,300.00 |
| TAXES (40.00%) | $1,471.20 | $1,320.00 |
| NET INCOME | $2,206.80 | $1,980.00 |
Going forward, analysts have forecasted the following free cash flows: $2,550.00 in 2021, and $2,600.00 in 2022. After that point, analysts expect free cash flows to grow at 4.00%. The firm has no short-term debt or preferred stock, and there are 1,000 shares outstanding. The firm's cost of capital is 11.00%.
You are trying to estimate the value of Doc McRuffins Incorporated. It is a rival firm to Ellie's Essentials, but not publicly traded. You do know that Doc McRuffins has an EBITDA of $4,750 for 2020. Using multiples, what is a rough estimate for the enterprise value of Doc McRuffins
Submit
Answer format: Currency: Round to: 2 decimal places.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
