Valuation by Comparables Problem What range of acquisition prices for Ideko is implied by the range of multiples for P/E, EV/Sales, and EV/EBITDA in Table 19.2? Table 19.1 Spreadsheet Estimated 2005 Income Statement and Balance Sheet Data for ideko corporation Year 2005 75,000 Income Statement (8 000) 1 Sales 2 Cost of Goods Sold 3 Raw Materials 4 Direct Labor Costs 5 Gross Profit 6 Sales and Marketing 7 Administrative 8 EBITDA 9 Depreciation 10 EBIT 11 Interest Expense (net) 12 Pretax Income 13 Income Tax 14 Net Income 116.000 (18.000 11.000 111.250) (13,500) 16.250 15,5001 10,750 1750 10.075 Year 2005 Balance Sheet (8 000) Assets 1 Cash and Equivalents 12.664 2 Accounts Receivable 18,493 3 Inventories 6.165 4 Total Current Assets 37322 5 Property, Plant, and Equipment 49.500 6 Goodwill 7 Total Assets 85,822 Liabilities and Stockholders' Equity & Accounts Payable 1.050 9 Debt 1,500 10 Total Liabilities 9.150 11 Stockholders' Equity 12 Total Liabilities and Equity 36222 6.900 Table 19.2 Ideko Financial Ratios Comparison, Mid-2005 Ratio Ideko (Proposed) 21.6% 2.0% 9.1 x 21.796 PE Luxottica Group 28.0% 2.7% Oakley, Inc. 24.8% 2.0% 11.6% 17.096 EV/Sales EV/EBITDA EBITDA/Sales Sporting Goods Industry 20.3 x 1.4x 11.4 12.196 Nike, Inc. 18.2% 1.5% 9.3x 15.9% 18.596