TB MC Qu. 20-87 (Algo) The book value of the company's equity: 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 $110,000 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 1,200,000 shares of outstanding stock at the end of 2022. Balance Sheet, December 31, 2022 2021 Cash $ 273,000 $ 106,000 Accounts Receivable $ 531,000 $ 406,000 Inventory $ 456,000 $ 306,000 Total Current Assets $ 1,260,000 Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity 1,235,000 $ 2,495,000 $ 506,000 660,000 1,329,000 $ 2,495,000 Income Statement, for year ended December 31, Sales Cost of Sales Gross Margin Operating Expenses Operating Income Taxes 2022 $ 6,250,000 5,085,000 1,165,000 510,000 2021 $ 818,000 1,130,000 $ 1,948,000 $ 306,000 560,000 1,082,000 $ 1,948,000 $ 5,450,000 4,300,000 1,150,000 460,000 655,000 298,000 690,000 193,000 Net Income $ 357,000 $ 497,000 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 $ 357,000 125,000 (275,000) 200,000 $ 407,000 $ 497,000 125,000 $ 622,000