NewCo Balance Sheet at 12/31/19

($ in Millions)

Assets

Cash 25

Receivables (net) 56

Inventory 51

PP & E (net) 201

Goodwill 25

Total assets 358

Liabilities & Equity

Accounts payable 59

Short term debt 12

Long term debt 130

Preferred stock 17

Common Equity 140

Total Liabilities + Equity 358

NewCo Income Statement for 2019

($ in Millions)

Sales (net) 421

CofGS 261

Gross profit 160

Other expense 93

Depr&Amort 19

Lease expense 7

EBIT 41

Interest expense 10

PBT 31

Tax @ 25% 8

PAT 23

1. NewCo has 5,400,000 shares outstanding. If its stock is trading at $42.15, what is its market capitalization? ($)
2. Calculate NewCos Enterprise Value at 12/31/19 per the Blackboard document, Enterprise Value. ($)
3. Calculate NewCos overall asset efficiency as we did in class. ($)
4. Assess Newcos working capital efficiency by calculating its:
   1. Average accounts receivables collection period for 2019 (Days), and
   2. Inventory turnover for 2019. (x)
5. If NewCos CofGS is 20% fixed, Other Expense is 90% fixed, and its Depreciation and Amortization, Interest and Lease expenses are 100% fixed, calculate its operating leverage, where Operating Leverage = Fixed Costs Total Costs. (%)