TB MC Qu. 20-84 (Algo) The value of the company, calculated using the earnings multiple: The Harrison Bicycle Company The Harrison Bicycle Company had the following operating results for 2021-2022. In addition, the company paid dividends in both 2021 and 2022 of $270,000 per year and made capital expenditures in both years of $230,000 per year. The company's stock price in 2021 was $14.20 and $12.50 in 2022. Also in 2022, the industry average earnings multiple for the bicycle industry was 8 and the free cash flow and sales multiples were 16 and 1.35, respectively. The company is publicly owned and has 1,800,000 shares of outstanding stock at the end of 2022. Cash Accounts Receivable Balance Sheet, December 31, 2022 2021 $ 277,000 $ 110,000 $ 535,000 $ 410,000 $ 460,000 $ 310,000 Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity $ 1,272,000 1,255,000 $ 2,527,000 $ 510,000 700,000 1,317,000 $ 2,527,000 Income Statement, for year ended December 31, Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes 2022 $ 6,300,000 5,045,000 1,255,000 480,000 2021 $ 830,000 1,150,000 $ 1,980,000 $ 310,000 600,000 1,070,000 $ 1,980,000 $ 5,540,000 4,460,000 1,080,000 470,000 610,000 775,000 258,000 196,000 Net Income $ 517,000 $ 414,000 Cash Flow From Operations Net Income 2022 2021 Plus Depreciation Expense + Decrease (-increase) in Account Receivable and Inventory + Increase (-decrease) in Current Liabilities Cash Flow from Operations $ 517,000 125,000 (275,000) 200,000 $ 567,000 $ 414,000 125,000 $ 539,000