The proposed purchase was $150 million. Assess wherher the valuation result makes sense

Table 19.1 Spreadsheet Estimated 2005 Income Statement and Salance Sheet Data Foro Corporation Year 2005 Year 2005 Income Statement (5000) Balance Sheet (3 000) 1 Sales 75,000 Assets 2 Cost of Goods Sold 1 Cash and Equivalents 12,664 3 Raw Materials (16,000) 2 Accounts Receivabile 18,493 4 (18,000) 3 Inventories 6.165 Direct Labor Costs 5 Gross Profit 41,000 4 Total Current Assets 37,322 (11,250) 49,500 6 Sales and Marketing 5 Property, Plant, and Equipment 7 Administrative (13,500) 6 Goodwill 8 EBITDA 16,250 7 Total Assets 86,822 9 Depreciation (5,500) Liabilities and Stockholders' Equity 10 EBIT 10,750 8 Accounts Payable 4.654 11 (75) Interest Expense (net) Debt 4,500 12 Pretax Income 10,675 10 Total Liabilities 9,154 13 Income Tax (3.736) 11 Stockholders' Equity 77,658 14 Net Income 6,939 12 Total Liabilities and 86,822 Equity Table 19.2 Ideko Financial Ratios Comparison, Mid-2005 Ratio Nike, Ideko (Proposed) Oakley, Inc. Luxottica Group Sporting Goods Industry Inc. P/E 21.6x 24.8% 28.0% 18.2x 20.3% EV/Sales 2.0x 2.0x 2.7% 1.5x 1.4x EV/EBITDA 9.1x 11.6x 14.4x 9.3x 11.4x EBITDA/ Sales 21.7% 17.0% 18.5% 15.9% 12.1%