Question
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 | |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started