Question
The WestTek privately held venture is considering the sale of the venture to an outside buyer. WestTek has net sales = $21.2 million, EBITDA =
The WestTek privately held venture is considering the sale of the venture to an outside buyer. WestTek has net sales = $21.2 million, EBITDA = $11.1 million, net income = $2.9 million, and interest-bearing debt = $12 million. Three publicly traded comparable firms or competitors in the industry have the following net sales, EBITDA, net income, equity value or market capitalization (stock price times number of shares of common stock outstanding), and interest-bearing debt information:
No surplus cash is being held by WestTek or by any of the three comparable firms. A. Calculate the enterprise value to net sales ratios for each of the three competitors (EastTek, SouthTek, and NorthTek), as well as the average ratio for the competitors.?
EASTTEK SOUTHTEK NORTHTEK Net Sales $ 25,000,000 $ 37,500,000 $ 80,000,000 EBITDA s 12,500,000 $20,000,000 $ 20,000,000 S 37,500,000 NetIncome $ 2,500,000 $ 3,000,000 $ 10,000,000 Equity Value S 45,000,000 $ 60,000,000 $ 160,000,000 Interest-bearing debt S 15,000,000 $ 20,000,000 $ 40,000,000Step by Step Solution
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