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See Table showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydeco's PE ratio each year from 2009 to 2013. In

See Table showing financial statement data and stock price data for Mydeco Corp.

a. Compute Mydeco's PE ratio each year from 2009 to 2013. In which year was it the highest?

b. What was Mydeco's Enterprise Value to EBITDA ratio each year? In which year was it the highest?

c. What might explain the differing time pattern of the two valuation ratios?

a. Compute Mydeco's PE ratio each year from 2009 to 2013.

Calculate the PE ratio for 2009-2013 below:

Table

2009--2013 Financial Statement Data and Stock Price Data for Mydeco Corp.

Mydeco Corp. 2009--2013 (All data as of fiscal year end, in $ million)

Income Statement

2009

2010

2011

2012

2013

Revenue

404.3

363.8

424.6

510.7

604..1

Cost of Goods Sold

( 188.3 )

( 173.8 )

( 206.2 )

( 246.8 )

( 293.4 )

Gross Profit

216.0

190.0

218.4

263.9

310.7

Sales and Marketing

( 66.7 )

( 66.4 )

( 82.8 )

( 102.1 )

( 120.8 )

Administration

( 60.6 )

( 59.1 )

( 59.4 )

( 66.4 )

( 78.5 )

Depreciation & Amortization

( 27.3 )

( 27.0 )

( 34.3 )

( 38.4 )

( 38.6 )

EBIT

61.4

37.5

41.9

57.0

72.8

Interest Income (Expense)

( 33.7 )

( 32.9 )

( 32.2 )

( 37.4 )

( 39.4 )

Pretax Income

27.7

4.6

9.7

19.6

33.4

Income Tax

( 9.7 )

( 1.6 )

( 3.4 )

( 6.9 )

( 11.7 )

Net Income

18.0

3.0

6.3

12.7

21.7

Shares outstanding (millions)

55

55

55

55

55

Earnings per share

$ 0.33

$ 0.05

$ 0.11

$ 0.23

$ 0.39

Balance Sheet

2009

2010

2011

2012

2013

Assets

Cash

48.8

68.9

86.3

77.5

85.0

Accounts Receivable

88.6

69.8

69.8

76.9

86.1

Inventory

33.7

30.9

28.4

31.7

35.3

Total Current Assets

171.1

169.6

184.5

186.1

206.4

Net Property, Plant & Equip.

245.3

243.3

309.0

345.6

347.0

Goodwill & Intangibles

361.7

361.7

361.7

361.7

361.7

Total Assets

778.1

774.6

855.2

893.4

915.1

Liabilities & Stockholders' Equity

Accounts Payable

18.7

17.9

22.0

26.8

31.7

Accrued Compensation

6.7

6.4

7.0

8.1

9.7

Total Current Liabilities

25.4

24.3

29.0

34.9

41.4

Long-term Debt

500.0

500.0

575.0

600.0

600.0

Total Liabilities

525.4

524.3

604.0

634.9

641.4

Stockholders' Equity

252.7

250.3

251.2

258.5

273.7

Total Liabilities & Stockholders' Equity

778.1

774.6

855.2

893.4

915.1

Statement of Cash Flows

2009

2010

2011

2012

2013

Net Income

18.0

3.0

6.3

12.7

21.7

Depreciation & Amortization

27.3

27.0

34.3

38.4

38.6

Chg. in Accounts Receivable

3.9

18.8

0.0

( 7.1 )

( 9.2 )

Chg. in Inventory

( 2.9 )

2.8

2.5

( 3.3 )

( 3.6 )

Chg. in Pay. & Accrued Comp.

2.2

( 1.1 )

4.7

5.9

6.5

Cash from Operations

48.5

50.5

47.8

46.6

54.0

Capital Expenditures

( 25.0 )

( 25.0 )

( 100.0 )

( 75.0 )

( 40.0 )

Cash from Investing Activ.

( 25.0 )

( 25.0 )

( 100.0 )

( 75.0 )

( 40.0 )

Dividends Paid

( 5.4 )

( 5.4 )

( 5.4 )

( 5.4 )

( 6.5 )

Sale (or purchase) of stock

-

-

-

-

-

Debt Issuance (Pay Down)

-

-

75.0

25.0

-

Cash from Financing Activ.

( 5.4 )

( 5.4 )

69.6

19.6

( 6.5 )

Change in Cash

18.1

20.1

17.4

( 8.8 )

7.5

Mydeco Stock Price

$ 7.92

$ 3.30

$ 5.25

$ 8.71

$ 10.89

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