REFER TO THE HANDOUT FOR THE FINANCIAL INFORMATION FOR SNOW Ltd

Snow Ltd 2022.pdf

Note:

The nominal value of the shares is 50p

Further Information

Independent valuers have assessed current realisable values of assets as:

	m
Freehold land & buildings	25.0
Plant & equipment	11.6
Fixtures & fittings	5.6
Inventory	18.4
Trade receivables	Value as SoFP

A similar business to Snow Ltd is listed on the LSE with a price earnings ratio of 15.

Required

Your boss has asked you to value the business using a variety of methods as described below:

Balance Sheet (net book value) method

(i) Calculate the number of shares that Snow Ltd has: million

(ii) What is the Net Assets using Balance Sheet Values? m

(iii) What is the value of one share in Snow Ltd using the Balance Sheet (net book value) method? (Enter your answer in and shown to the nearest penny)

Liquidation basis

(iv) What is the value of the Net Assets at Realisable Value? m

(v) What is the value of one share in Snow Ltd using the Liquidation basis method? (Enter your answer in and shown to the nearest penny)

P/E basis

What is the value of one share in Snow Ltd using the P/E basis method? (Enter your answer in and shown to the nearest penny)