Question
Consider recent financials for Ellie's Essentials LLC: Balance Sheet 2020 2019 Current Assets $11,214.00 $10,000.00 Net PPE $31,000.00 $30,000.00 Total Assets $42,214.00 $40,000.00 Current Liabilities
Consider recent financials for Ellie's Essentials LLC:
Balance Sheet
| 2020 | 2019 | |
|---|---|---|
| Current Assets | $11,214.00 | $10,000.00 |
| Net PPE | $31,000.00 | $30,000.00 |
| Total Assets | $42,214.00 | $40,000.00 |
| Current Liabilities | $8,620.00 | $8,000.00 |
| Long-term debt | $13,188.00 | $12,000.00 |
| Total Liabilities | $21,808.00 | $20,000.00 |
| Shareholder Equity | $20,406.00 | $20,000.00 |
| Liabilities and Equity | $42,214.00 | $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 (37.00%) | $1,360.86 | $1,221.00 |
| NET INCOME | $2,317.14 | $2,079.00 |
Going forward, analysts have forecasted the following free cash flows: $2,750.00 in 2021, and $2,600.00 in 2022. After that point, analysts expect free cash flows to grow at 5.00%. The firm has no short-term debt or preferred stock, and there are 1,000 shares outstanding. The firm's cost of capital is 9.00%.
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
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Introduction To Estimating Economic Models
Authors: Atsushi Maki
1st Edition
0415589878, 978-0415589871
