Question
You are trying to value the equity of a company with total Sales of 200, Comprehensive income of 10, and Common shareholders equity of 100.
You are trying to value the equity of a company with total Sales of 200, Comprehensive income of 10, and Common shareholders equity of 100. You decide to conduct a comparable companies valuation using the following three comparable companies:
| Comparable X | Comparable Y | Comparable Z |
Income Statement |
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Sales | 500 | 300 | 400 |
Operating income (after tax) | 100 | 20 | 60 |
Net financial expense (after tax) | (30) | 0 | (50) |
Comprehensive income | 70 | 20 | 10 |
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Balance Sheet |
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Operating assets | 550 | 400 | 650 |
Operating liabilities | (100) | (100) | (150) |
Net operating assets | 450 | 300 | 500 |
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Financial obligations | 300 | 0 | 450 |
Financial assets | (50) | 0 | (50) |
Net financial obligations | 250 | 0 | 400 |
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Common shareholders equity | 200 | 300 | 100 |
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Market Data |
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Price | 8 | 3 | 1 |
Shares outstanding | 100 | 250 | 200 |
Market capitalisation | 900 | 750 | 200 |
You include all three companies in your multiples calculation. What is the value of your company using the mean P/B multiple?
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