Question
Consider the following balance sheet and income statement for Tasty Brands, Inc., in condensed form, including some information from the cash flow statement: Tasty Brands,
Consider the following balance sheet and income statement for Tasty Brands, Inc., in condensed form, including some information from the cash flow statement:
Tasty Brands, Inc. (in millions except per share data) | |||
Balance Sheet | 2016 | ||
Cash and short-term Investments | $ | 590 | |
Accounts receivable | 336 | ||
Inventory | 311 | ||
Other current assets | 590 | ||
Long-lived assets | 7,106 | ||
Total assets | $ | 8,933 | |
Current liabilities | 2,350 | ||
Total liabilities | 6,461 | ||
Noncontrolling interest | 56 | ||
Shareholders equity | 2,416 | ||
Total debt and equity | $ | 8,933 | |
Income Statement | |||
Sales | $ | 13,254 | |
Cost of sales | 9,586 | ||
Gross margin | $ | 3,668 | |
Earnings before interest and taxes | $ | 1,815 | |
Interest | 264 | ||
Taxes | 504 | ||
Noncontrolling interest | (44 | ) | |
Net income | $ | 1,091 | |
Share price | $ | 91 | |
Earnings per share | 4.11 | ||
Number of outstanding shares (millions) | 444.7 | ||
Cash Flows | |||
Cash flow from operations | $ | 2,156 | |
Capital expenditures | 903 | ||
Dividends | 700 | ||
Determine the valuation of the company at the end of 2013 using each of the following three methods. Assume earnings and cash flows for the coming 10 years are equal to the earnings and cash flows in 2013; the appropriate free cash flow multiple is 23.4; and while the earnings multiple is 21.7. (Enter your answers in millions rounded to nearest whole number.) a. Market capitalization b. Enterprise value c. Free cash flow multiple
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