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Please provide a SUBSTANTIAL RESPONSE and show ALL calculations. Lands' End PROBLEM 2-12 Relations between Income, Cash Bar and Stock Price The following information is
Please provide a SUBSTANTIAL RESPONSE and show ALL calculations.
Lands' End PROBLEM 2-12 Relations between Income, Cash Bar and Stock Price The following information is extracted from the annual report of Lands' End (in milions, except per share data): Year 4 Assal y Net income Cash frem (used by) operations Net cash flow Free cash flow* Market price per share (end of fiscal year) Common shares outstanding Year 9 $31.2 74.3 0.03 27.5 32.375 30.1 Year 8 $64.2 (26.9 (86.5) (74.6) 39.312 31.0 Year 7 $ 51.0 121.8 75.7 103.3 28.375 32.4 Year 6 $30.6 41.4 11.8 27.5 14.625 33.7 Year 5 $36.1 34.5 (16.1) 2.4 16.125 34.8 $43.7 22.4 (1.2) 5.1 24.375 35.9 *Defined as Cash flow from operations Capital expenditures - Dividends. Required: a. Calculate and graph the following separate relations: (1) Net income per share (EPS) and market (3) Net cash flow per share and market price per share price per share (2) Cash from operations per share and market (4) Free cash flow per share and market price per share price per share b. Which of the measures extracted from the annual report appear to best explain changes in stock price? Discuss the implications of this for stock valuation. c. Choose another company and prepare similar graphs. Do your observations from Lands' End generalize? CHECK EPS performs bestStep by Step Solution
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