VALUATION CONCEPTS AND METHODOLOGIES MULTIPLE CHOICE PROBLEM. Write the letter of the best answer before the number of the question or statement being answered.

1. The following data were gathered from the annual report of Thor Products Market price per share Php 30.00 Number of ordinary shares 10.000 Preferred stock, 5%, P100 par Php 10,000 Ordinary equity Php 120.000 The book value per share is a. Php30.00 b. Php15.00 c. Php14.00 d. Php12.00 2. The following information was reported by Adele Company in their financial statements: Current Assets Php250.000 Non-current Assets 760,000 Current Liabilities 60,000 Non-current Liabilities 350.000 How much is the book value of Adele Company? a. Php190.000 b. Php500,000 c. Php660,000 d. Php1,010,000 3. Sam, an analyst, is looking at the 2019 financial statements of Smith Company and gathered the following details: Cash Php310.000 Receivables 320,000 Inventory 200,000 Property, Plant and Equipment 690,000 Accounts Payable 175,000 Long-term Notes Payable 500,000 Ordinary Share Capital (250,000 312,500 outstanding shares, P1.25 par) Retained Earnings 532,500 48 VALUATION CONCEPTS AND METHODOLOGIES There are no other issuances or buyback of shares in 2019. How much is the book value per share of Smith Company? a Php6.08 b. Php3,38 c. Php2.13 d. Php 1.25 4. ZYX Incorporated showed the following balances in its financial statements for 2019: Php 510,000 1,065,000 355,000 1,000,000 500,000 Current Assets Non-current Assets Current Liabilities Non-current Liabilities Outstanding ordinary shares What is the book value per share of ZYX incorporated? a. Php0.44 b. Php1.15 c. Php3.15 d. Php5.86 5. Accounting records of Arabica Company showed the following items as of December 31: Current assets Php 950,000 Current liabilities 600,000 Noncurrent assets 3,500,000 Noncurrent liabilities 2,000,000 Ordinary shares outstanding, January 1 400,000 Ordinary shares outstanding, December 31 500,000 In July 1, Arabica Company issued additional 100,000 ordinary shares to fund its investment plan. How much is the book value of Arabica Company as of December 31? a Php4,450,000 b. Php3,850,000 c. Php2,450,000 d. Php1,850,000 wuch VALUATION CONCEPTS AND METHODOLOGIES 6. Intense Corporation showed the following balances in its financial records as of December 31: cial Current Assets Current Liabilities Non-current Assets Non-current Liabilities Outstanding ordinary shares, beginning Outstanding ordinary shares, ending Php 880,000 500,000 3,000,000 1,500,000 1,200,000 1,500,000 0 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 7. The following information are related to Citrus Corporation: Sales Php 15,000,000 Asset Tumover 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 8. 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 50 VALUATION CONCEPTS AND METHODOLOGIES 9 Hercules Company reported the following balances as of December Php 750,000 1,400,000 400,000 500,000 13 fe 1,000,000 shares 10 31, 2019 Current assets Non-current assets Current liabilities Non-current liabilities Outstanding ordinary 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. yoogon How much is the book value of Hercules Company as of December 31, 20197 a. Php1,250,000 b. Php1,650,000 c Php2,150,000 d. Php3,050,000 10. Refer to Hercules Company. How much is the book value per share in 2019? a. Php3.05 b. Php2.15 c. Php1.65 d. Php1.25 11. Refer to Hercules Company. How much is the networking capital as of December 31, 2020? a. Php247,500 b. Php350,000 c. Php497,500 d. Php937,500 12. Refer to Hercules Company. How much is the book value per share as of December 31, 20207 a. Php1.93 b. Php1.54 c. Php1 25 d. Php1.00 51 VALUATION CONCEPTS AND METHODOLOGIES 13. 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 3,000,000 Equipment 850,000 Accounts payable 400,000 Short-term notes payable 500,000 Long-term debt 1,000,000 Weighted average of 250,000 outstanding shares in 2020 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 14. 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 15. 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 52 VALUATION CONCEPTS AND METHODOLOGIES 16. How much is the replacement value per share of Cocoa Corporation? a Php21.82 b. Php19.84 c. Php14.22 d. Php12 24 17. Caramel Company showed the following balances in its balance sheet as at year-end: Php 450,000 1,150,000 300,000 900,000 120,000 shares Current Assets Non-current Assets Current Liabilities Non-current Liabilities Weighted average of outstanding shares According to the appraisal 60% of the non-current assets can be replaced at 150% of their reported book value while the remaining balance of the non-current assets has replacement value of 659 Reported balance of other items approximates their replacement value. How much is the replacement value of Caramel Company at year- end? a. Php584,000 b. Php400,000 c. Php1,784,000 d. Php1,600,000 18. Refer to Caramel Company. What is the book value per share of Caramel Company? a. Php3.33 b. Php4.87 c. Php13.33 d. Php14.87 19. Samsan Company, a start-up company which developed its own data imaging algorithm, is trying to estimate the value of their company. Their latest financial statements showed the following information: VALUATION CONCEPTS AND METHODOLOGIES Current Assets 1.250,000 4,000,000 Non-current Assets Current Liabilities 850,000 Non-current Liabilities 250,000 Part of their non-current assets is a patent for the technology they developed which has a recorded balance of P2,500,000. An equity investor is looking at buying the company. Samsan Company tried to trace back the costs of developing the patent and determined that the reproduction cost of that particular patent is at P3,000,000 What is the book value of Samsan Company? a. Php5,250,000 b. Php5,000,000 c. Php4,150,000 d. Php4,000,000 20. Refer to Samsan Company. What is the reproduction value of Samsan Company? a. Php5,000,000 b. Php4,650,000 c. Php4,150,000 d. Php4,000,000