Williams Company is a manufacturer of auto parts having the following financial statements for 2021-2022. Balance Sheet December 31 2022 Cash $ 261,000 Accounts receivable 151,000 Inventory 386,000 Total current assets $ 798,000 Long-lived assets 1,650,000 Total assets $ 2,448,000 Current liabilities 212,000 Long-term debt 900,000 Shareholders' equity 1,336,000 Total debt and equity $ 2,448,000 2021 $ 136,000 226,000 176,000 $ 538,000 1,510,000 $ 2,048,000 185,000 810,000 1,053,000 $ 2,048,000 Income Statement For the years ended December 31 2022 Sales $ 3,510,000 Cost of sales 2,520,000 Gross margin 990,000 Operating expenses* 501,000 Operating income 489,000 Taxes 195,600 Net income $ 293,400 2021 $ 3,610,000 2,620,000 990,000 439,000 551,000 192,850 $ 358, 150 Cash Flow from Operations 2021 $ 358, 150 55,000 Net income Plus depreciation expense + Decrease (-increase) in accounts receivable and inventory + Increase (-decrease) in current liabilities Cash flow from operations 2022 $ 293,400 65,000 (135,000) 27,000 $ 250, 400 $ 413,150 * Operating expenses include depreciation expense. Additional financial information, including industry averages for 2022, where appropriate, includes: Additional financial information, including industry averages for 2022, where appropriate, includes: Industry 2022 35.0% 2022 $ 120,000 40% $ 65,000 $ 49,000 $ 2.35 1,810,000 2021 $ 110,000 35% $ 55,000 $ 49,000 $ 3 1,810,000 25.00 1.50 18.00 9.00 Capital expenditures Income tax rate Depreciation expense Dividends Year-end stock price Number of outstanding shares Sales multiplier Free cash flow multiplier Earnings multiplier Cost of capital Accounts receivable turnover Inventory turnover Current ratio Quick ratio Cash flow from operations ratio Free cash flow ratio Gross margin percentage Return on assets (net book value) Return on equity 5% 5% 11.10 10.50 2.30 1.90 1.20 1.10 30.0% 20.0% 30.0% Required: Develop a business valuation for Williams Company for 2022 using the following methods: (1) book value of equity, (2) market value of equity, (3) discounted cash flow (DCF), (4) enterprise value, and (5) all the multiples-based valuations for which there is an industry average multiplier. For the calculation of the DCF valuation, you may use the simplifying assumption that free cash flows will continue indefinitely at the amount in 2022. Book value of equity Market value of equity Discounted free cash flows Enterprise value Multiples-based valuation Earnings multiple Free cash flow multiple Sales multiple
