vALUATION CONCEPTS AND METHODOLOGIES

ASSET BASED VALUATION

1. Intense Corporation showed the following balances in its financial records as of December 31: Current Assets Php 880,000

Current Liabilities 500,000

Non-current Assets 3,000,000

Non-current Liabilities 1,500,000

Outstanding ordinary shares, beginning 1,200,000

Outstanding ordinary shares, ending 1,500,000

Intense Corporation issued additional 300,000 ordinary shares on June 1 as part of its financing plan. What is the book value per share of Intense Corporation as of December 31?

a. Php1.57

b. Php1.39

c. Php1.37

d. Php1.25

2. The following information are related to Citrus Corporation:

Sales Php 15,000,000

Asset Turnover 3.0x

Debt to Equity Ratio 1.5

Weighted average outstanding shares 200,000 shares

Asset turnover only considered asset balance as of December 31. How much is the book value per share of Citrus Corporation based on the foregoing information?

a. Php75.00

b. Php25.00

c. Php15.00

d. Php10.00

3. Spice Corporation reported 500,000 ordinary shares at the beginning of 2020. In the beginning of the second quarter, convertible bondholders opted to exercise their option to convert to shares, resulting to additional 100,000 shares. In October 1, Spice Corporation bought back 50,000 shares as they have spare cash. What is the weighted average outstanding shares for 2020?

a. 600,000 shares

b. 562,500 shares

c. 550,000 shares

d. 500,000 shares

4. Hercules Company reported the following balances as of December 31, 2019:

Current assets Php 750,000

Non-current assets 1,400,000

Current liabilities 400,000

Non-current liabilities 500,000

Outstanding ordinary shares 1,000,000 shares

In 2020, analytics showed that current assets increased by 25%, non current assets increased by 20% and current liabilities by 10%. Half of the non-current liabilities were also paid. At the beginning of 2020, additional 250,000 shares were issued by Hercules Company

How much is the book value of Hercules Company as of December 31, 2019?

a. Php 1,250,000

b. Php 1,650,000

c. Php 2,150,000

d. Php 3,050,000

5. Refer to Hercules Company. How much is the book value per share in 2019?

a. Php 3.05

b. Php 2.15

c. Php 1.65

d. Php 1.25

6. Refer to Hercules Company. How much is the net working capital as of December 31, 2020?

a. Php 247,500

b. Php 350,000

c. Php 497,500

d. Php 937,500

7. Refer to Hercules Company How much is the book value per share as of December 31, 20207

a Php 1.93

b. Php 1.54

c. Php 1.25

d. Php 1.00

8. As of December 31, 2020, Cocoa Corporation reported the following items in its balance sheet:

Cash Php 240,000

Receivables 520,000

Inventory 350,000

Property and plant Equipment 3,000,000

Accounts payable 850,000

Short-term notes payable 500,000

Long-term debt 1,000,000

Weighted average of

outstanding shares in 2020 250,000

Cocoa Corporation contracted with a third-party appraiser to determine how much is the replacement cost of its assets. Based on the report of the appraiser, the property and plant has replacement cost of 125% of its reported value. On the other hand, the equipment only commands replacement cost of 70% of its value. According to the appraiser, the equipment was designed using an old technology, thus, the lower replacement cost. Other assets and liabilities are valued fairly. How much is the non-current assets reflected in the books of Cocoa Corporation as of December 31, 2020?

a. Php4,960,000

b. Php3,850,000

c. Php2,850,000

d. Php2,150,000

9. How much is the book value per share of Cocoa Corporation as of December 31, 2020?

a. Php19.84

b. Php16.24

c. Php15.84

d. Php12.24

10. How much is the replacement value of the non-current assets of Cocoa Corporation?

a. Php3,345,000

b. Php3,850,000

c. Php4,345,000

d. Php5,455,000