The following are extracted from the financial statements of Frem, Inc., for 2006, 2005, and 2004.

	2006	2005	2004
Net sales	$233,000	$204,000
Cost of sales	(124,000)	(110,000)
Selling and administrative expenses	(95,000)	(81,500)
Other income (expense):
Interest	(3,700)	(3,050)
Other	100	1,175
Earnings before tax and extraordinary credit	$ 10,400	$ 10,625
Provision for income tax	(4,800)	(4,740)
Earnings before extraordinary credit	5,600	5,885
Extraordinary credit		1,510
	$ 5,600	$ 7,395
Total assets	$202,000	$173,000	$161,000
Current liabilities	50,400	34,800	29,000
Long-term debt	24,600	17,400	15,200
Total liabilities	75,000	52,200	44,200
Common equity	123,000	116,800	112,800
Preferred stock	4,000	4,000	4,000
Total equity	127,000	120,800	116,800
Total liabilities and equity	$202,000	$173,000	$161,000

What is book value in 2006? In 2005? In 2004?

Assume depreciation and amortization expense of $11,000 in 2006 and $7,000 in 2005. What is EBITDA for 2006? For 2005? Ignore the extraordinary credit in your calculations.

What multiple of EBITDA do you believe is suitable to value this business, and why?

What would you determine the value of this business to be at the end of 2006? 2005?