So, my friend is taking an accounting course and we are struggling to get the second part completed. We have the data and do not understand how some of the numbers are found. Such as inventory and interest rate. The interest rate is supposed to be 7% on long term liabilities. Any idea how to solve number two?

Thank you

1. 30% Ratio Analysis. Do a comprehensive Ratio Analysis of the target company, including all of the ratios covered in this course. Look at the current state of the company and do a historical trend analysis for the six years of statements you have. Use charts and graphs when it is appropriate. There are some industry comparisons at the bottom of the company information that you can compare to. 2. 30% Financial Forecasts. Develop cash flow statements to support the income statement and balance sheet information for 2016-2021. Then based on past growth and industry projections use reasonable methods to project income statements, balance sheets, and cash flow statements forward for five years. Do a scenario analysis of expected and/or sustainable growth rates. Estimate Additional funds needed and/or surplus cash. 3. 10\% WACC \& EVA (Chapter 7) - Estimate the WACC and EVA for Organic Merchants for 2014-2019. Given your projections, how do you expect it to change in the future? The interest on the long-term debt is 7%. 4. 20% Company Value (Chapter 9) - Using the free cash flow method arrive at a value for this company as of year-end 2022. For reference, the company started in 2016. That should help you determine an appropriate discount rate for the company. Using the appropriate multipliers, estimate the value of the company at year end 2021. My research shows appropriate EBITDA multiplier of 6.9 times and an appropriate sales multiplier of .4. Estimate what the business would be worth if you just sold the assets. After doing a cash-flow valuation, a comparison valuation, and an asset valuation how much do you think the business could be reasonably sold for in 2021 ? Then estimate what you think the company would be worth in 2026. 5. 10\%. Decisions. Given your analysis comment on the viability of this business as an ongoing business or as a business that should be groomed to be sold. By 2026 would you recommend that Matthew sell the business or continue running it? What would the price have to be in 2022 for him to consider selling? Consolidated Financial Statements: Organic Merchants Balance Sheet Current Assets: \begin{tabular}{llrrrrrrr} Cash \& Short-Term Investments & $143,000.00 & $ & 109,819.51 & $72,203.97 & $280,720.17 & $682,437.01 & $1,343,398.03 \\ \hline Accounts Receivable & $ & & & & $87,500.00 & $131,250.00 & $218,750.00 & $328,125.00 \\ Inventory & $75,000.00 & $123,400.00 & $186,500.00 & $280,000.00 & $463,000.00 & $689,000.00 \\ \hline Dther Current Assets & $25,000.00 & $28,470.00 & $32,000.00 & $38,000.00 & $47,600.00 & $58,000.00 \\ \hline Total Current Assets & $243,000.00 & $261,689.51 & $378,203.97 & $729,970.17 & $1,411,787.01 & $2,418,523.03 \end{tabular} Long-Term Assets: Current Liabilities: Accounts Payable Short-Term Debt Total Current Liabilities Long-Term Liabilities Total Liabilities Equity \& Capital: Paid-In Capital Retained Earnings Total Equity Total Equity, Capital, \& Liabilities \begin{tabular}{ll|r|rrrr|rrr} $100,000.00 & $100,000.00 & $100,000.00 & $100,000.00 & $100,000.00 & $100,000.00 \\ $53,000.00 & $ & 77,401.39 & $123,792.60 & $335,558.80 & $752,375.64 & $1,431,611.66 \\ $153,000.00 & $ & 177,401.39 & $223,792.60 & $435,558.80 & $852,375.64 & $1,531,611.66 \\ & & & $253,000.00 & $446,689.51 & $643,203.97 & $954,970.17 & $1,596,787.01 & $2,563,523.03 \\ \hline \end{tabular}