Question
Consider recent financials for Ellie's Essentials LLC: Balance Sheet 2020 2019 Current Assets $11,249.00 $10,000.00 Net PPE $31,000.00 $30,000.00 Total Assets $42,249.00 $40,000.00 Current Liabilities
Consider recent financials for Ellie's Essentials LLC:
Balance Sheet
| 2020 | 2019 | |
|---|---|---|
| Current Assets | $11,249.00 | $10,000.00 |
| Net PPE | $31,000.00 | $30,000.00 |
| Total Assets | $42,249.00 | $40,000.00 |
| Current Liabilities | $8,798.00 | $8,000.00 |
| Long-term debt | $13,225.00 | $12,000.00 |
| Total Liabilities | $22,023.00 | $20,000.00 |
| Shareholder Equity | $20,226.00 | $20,000.00 |
| Liabilities and Equity | $42,249.00 | $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 (38.00%) | $1,397.64 | $1,254.00 |
| NET INCOME | $2,280.36 | $2,046.00 |
Going forward, analysts have forecasted the following free cash flows: $2,650.00 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 10.00%.
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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance Applications and Theory
Authors: Marcia Cornett, Troy Adair
3rd edition
1259252221, 007786168X, 9781259252228, 978-0077861681
