Lab 3 - Equity (Filled
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Oregon State University, Corvallis *
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Course
123
Subject
Finance
Date
Jan 9, 2024
Type
xlsx
Pages
29
Uploaded by AdmiralJay493
342 Term Project -- Lab 3: Equity
Name:
Company Stock Ticker:
Prompt:
Instructions:
Do Not Delete Any Columns, Rows, or Cells in this Workbook. It will me
Part A: Practice
On the tab "Comparables - Practice"
-Use the 3M sample data to fill in the tables at the top
- The definition of all multiples calculated is on the right hand sid
-Question 1 requires you to calculate the multiple for 3M and its
-Question 2 requires that you calculate the average multiple acro
-Question 3 requires you to determine if 3M is trading above (pre
-Question 4 requires you to apply the peer average to 3M to com
Part B: You Try
You will need to gather data from Yahoo finance to fill in the Company
On the tab "Comparables - You Try"
-Fill in the company data using information from Yahoo finance, som
-Fill in the tables with the closest competitors you identified in Que
-Complete the analysis at the top in the same way as the practice ta
On the tab "Comparables Chart - You Try"
-Use the data you have generated to create a bar chart for each mu
Tips / FAQ:
The CFO wants to know about the firms valuation relative to competitors
the CFO whether it is appropriate to issue or buy back shares. You will us
company using the
multiples method
. You have been given some sample in
multiples for a firm and its competitors. Use these exercises to practice. They w
gather data for your company yourself. This information will go on slide 11-12 o
If a competitors of your company has a negative values for any of their m
Why? A negative P/E ratio for a competitor would imply a negative price
method and negative prices are not possible because of limited liability. S
the peer average. You can include the competitor in any graph you make
on the graph "NM" showing that the value is not meaningful.
You must work on this lab by yourself, though you can ask questions to
not submit anyone else's workbook as your own work.
Applied Materials Inc.
AMAT
ess up the grading!
de of the sheet
competitors individually
oss all of 3M's peers. Be sure to exclude 3M from the average. We want to compare 3M to its peers, no
emium), below (discount), or in-line (within 1X) of its peers
me up with a price for 3M implied by each of the multiples
y data at the bottom of the page. This can be found
Financials > Income Statement / Balance Sheet > Q
me formulas are already there for you
estion 14 of the overview tab in Lab 1.
ab
ultiple that shows how your firm compares to its peers. See page 12 of the 3M sample term project for
s. A high or low relative valuation might inform
se information from Yahoo Finance to value the
nformation to familiarize yourself with calculating
will be graded for accuracy. Then, you will need to
of your presentation.
multiples, these numbers are not meaningful.
for your own company if we use the multiples
So, if this is the case, leave this number out of
by setting the value to zero, then creating a label
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classmates, the TA, or the professor. You may
ot itself +
its peers.
Quarterly > TTM / MRQ and the Statistics tabs on Yahoo Finance
reference.
59632
86612
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Questions
Question 1: Calculate the following multiples by referencing cells in the sample company data b
3M
MSA Safety
Danaher
P/E (ttm)
10.47X
81.08X
29.28X
P/B (mrq)
4.86X
6.39X
4.28X
EV/EBITDA (ttm)
8.57X
39.14X
20.26X
P/S (ttm)
1.98X
3.61X
6.19X
Question 2: Calculate the Peer Average for each multple in Q1 using the =AVERAGE formula. Exc
Peer Average
P/E
39.93X
P/B
6.43X
EV/EBITDA
23.79X
P/S
4.49X
Question 3: Is 3M currently trading a a discount, premium, or in-line (within +/- 1X) relative to t
Discount
Question 4:
If the company traded at the average ratio of these competitors, what is the implie
Multiple Method Implied Price
P/E
$474.94 <--- Example: Take the peer average P/E
P/B
$164.62
EV/EBITDA
$230.78 <--- Note that this number represents the
P/S
$282.65
Sample Company Data
3M
MSA Safety
Danaher
Current Value
124.53
137.85
265.35
83.12
6.01
215.39
Competitors Pro-Forma Income Statement (in billions $, trailing twelve months -- TTM)
Sales
34.76
1.49
31.25
Sales Per Share
62.89
38.16
42.90
Gross Profit
16.58
0.65
18.95
Gross Profit Margin
47.7%
43.8%
60.6%
EBIT
7.82
0.10
8.39
EBIT Margin
22.5%
6.5%
26.8%
Price Per Share
($/share)
Enterprise Value
($B)
Net Income
6.58
0.07
6.60
Profit Margin
18.9%
4.5%
21.1%
Shares Outstanding
0.55
0.04
0.73
Earnings Per Share
11.90
1.70
9.06
Non-GAAP Income Statement Measures
Depreciation & Amortization
1.88
0.06
2.24
EBITDA
9.70
0.15
10.63
Competitors Pro Forma Balance Sheet (in billions $, most recent quarter -- MRQ)
Total Assets
46.18
2.39
83.18
Total Debt
16.63
0.64
23.27
Total Liabilities
32.02
1.54
38.01
Total Equity
14.16
0.84
45.18
Book Value Per Share
25.61
21.57
62.01
Numbers for example purposes only and do not reflect current values
below:
Definitions:
Amphenol
Procter and Gamble
Peer Average
P/E (ttm): Price Per Sha
25.05X
24.29X
34.04X P/B: Price Per Share / B
7.01X
8.03X
6.11X EV/EBITDA: Enterprise
17.60X
18.14X
20.74X P/S: Price Per Share / S
3.75X
4.43X
3.99X
clude 3M from the average.
the peer average P/E ratio.
ed stock price or enterprise value? Multiply the peer average ratio X 3M ratio-specific den
(cell B11) and multiply that by 3M's earnings per share (cell B48) to get 3M's price implie
e implied Enterprise Value in $B, not price per share
Amphenol
Procter and Gamble
78.27
149.28
51.48
384.03
12.41
80.46
20.85
33.73
3.93
37.82
31.7%
47.0%
2.52
18.41
20.3%
22.9%
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1.86
14.66
15.0%
18.2%
0.60
2.39
3.12
6.14
0.41
2.76
2.92
21.17
15.10
116.28
4.75
33.00
8.45
71.95
6.65
44.33
11.17
18.58
are / Earnings Per Share over last 12 months
Book Value Per Share … (Book Value = Total Assets - Total Liabilities in most recent quarter)
Value / Earnings Before Interest Taxes Depreciation and Amortization over last 12 months
Sales Per Share over last 12 months
nominator
ed by the multiple method
1
1
1
1
2
2
2
3
3
3
4
4
4
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5
5
6
7
7
8
8
9
9
10
22
86612
Questions
Question 1: Fill in the table below then calculate the following multiples for your company and its com
Applied Materials Inc.
KLA Corporation
P/E (ttm)
17.32X
20.49X
P/B (mrq)
7.28X
20.88X
EV/EBITDA (ttm)
13.28X
15.17X
P/S (ttm)
4.14X
6.14X
Question 2: Calculate the Peer Average for each multple in Q1 using the =AVERAGE formula. Exclude yo
Peer Average
P/E
17.22X
P/B
13.25X
EV/EBITDA
12.26X
P/S
5.28X
Question 3: Is your company currently trading a a discount, premium, or in-line (within +/- 1X) relative
In-Line
Question 4:
If the company traded at the average ratio of these competitors, what is the implied stock
Multiple Method Implied Price
P/E
$132.65
P/B
$239.07
EV/EBITDA
$100.97 <--- Note that this number represe
P/S
$167.69
Company Data
Fill in the blank cells with data from the Financials > Income Statement / Balance Sheet > Quarterly > T
Applied Materials Inc. (AMAT)
KLA Corporation (KLAC)
Current Value
131.3
457.93
109.42
64.97
Competitors Pro-Forma Income Statement (in billions $, trailing twelve months -- TTM)
Sales
26.54
10.17
Sales Per Share
31.73
74.59
Gross Profit
12.32
60.45
Gross Profit Margin
46.4%
594.4%
EBIT
7.73
3.87
EBIT Margin
29.1%
38.0%
Price Per Share
($/share)
Enterprise Value
($B)
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Net Income
6.44
3.10
Profit Margin
24.3%
30.5%
Shares Outstanding
0.84
0.14
EPS
7.70
22.76
Non-GAAP Income Statement Measures
Depreciation & Amortization
0.51
0.42
EBITDA
8.24
4.28
Competitors Pro Forma Balance Sheet (in billions $, most recent quarter -- MRQ)
Total Assets
30.41
14.14
Total Debt
5.66
5.89
Total Liabilities
15.32
11.15
Total Equity
15.09
2.99
Book Value Per Share
18.04
21.94
mpetitors
Arrow Electronics, Inc.
Broadcom Inc.
NXP Semiconductors
5.68X
25.77X
16.95X
11.01X
15.67X
5.45X
4.96X
18.22X
10.68X
1.74X
9.76X
3.50X
our company and any negative or missing numbers from the average.
e to the peer average P/E ratio.
k price or enterprise value?
ents the implied Enterprise Value in $B, not price per share
TTM / MRQ and the Statistics tabs on Yahoo Finance
Arrow Electronics, Inc. (ARW)
Broadcom Inc
NXP Semiconductors (NXPI)
111.8
838.36
179.13
10.14
373.31
53.51
35.84
35.45
13.18
64.39
85.90
51.11
4.57
24.21
7.51
12.8%
68.3%
57.0%
1.86
16.37
3.82
5.2%
46.2%
29.0%
1.20
13.87
2.77
3.4%
39.1%
21.0%
0.56
0.41
0.26
2.16
33.60
10.76
0.18
4.12
1.19
2.04
20.49
5.01
20.54
71.60
23.80
4.16
39.34
11.17
14.88
49.52
15.32
5.65
22.08
8.48
10.16
53.49
32.88
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Definitions
Peer Average
P/E (ttm): Price Per Share / Earnings Per Share over last 12 mont
17.24X P/B: Price Per Share / Book Value Per Share … (Book Value = Tota
12.06X EV/EBITDA: Enterprise Value / Earnings Before Interest Taxes Dep
12.46X P/S: Price Per Share / Sales Per Share over last 12 months
5.06X
This is just the current stock price
This is on the Statistics tab
All info below is on Financials > Quarterly > Income Statement or Balance Sheet tabs
TTM
TTM
TTM
TTM
Most recent quarter
TTM
Most recent quarter
Most recent quarter
Most recent quarter
ths
al Assets - Total Liabilities in most recent quarter)
preciation and Amortization over alst 12 months
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1
1
1
1
2
2
2
3
3
3
4
4
4
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5
5
6
7
7
8
8
9
9
10
16
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86612
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Questions:
Question 1: Create a bar chart to visualize how your company's P/E ratio compares to its peers
Question 2: Create a bar chart to visualize how your company's P/B ratio compares to its peers
Question 3: Create a bar chart to visualize how your company's EV/EBITDA ratio compares to its peers
Question 4: Create a bar chart to visualize how your company's P/S ratio compares to its peers
Applied Materials Inc.
KLA Corporation
Arrow Electronics, Inc.
Broadcom Inc.
NXP Semiconductors
Peer Average
0.00X
5.00X
10.00X
15.00X
20.00X
25.00X
30.00X
P/E ratio
Applied Materials Inc.
KLA Corporation
Arrow Electronics, Inc.
Broadcom Inc.
NXP Semiconductors
Peer Averag
0.00X
5.00X
10.00X
15.00X
20.00X
25.00X
P/B ratio
Applied Materials Inc.
KLA Corporation
Arrow Electronics, Inc.
Broadcom Inc.
NXP Semiconductors
Peer Avera
0.00X
4.00X
8.00X
12.00X
16.00X
20.00X
EV/EBITDA ratio
4.00X
6.00X
8.00X
10.00X
12.00X
P/S ratio
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Comparables data
You can copy data from the "Comparables" tab in to a table here to create the charts above if you'd lik
Applied Materials Inc.
KLA Corporation
Arrow Electronics, Inc.
Broadcom Inc.
NXP Semiconductors
Peer Ave
0.00X
2.00X
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s
e
e
age
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ke. Or just reference the data in that tab directly.
erage
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86612
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W
B.
1 Problem 2- Prepare a vertical analysis schedule
3 Here is the operating data for Yalis Cleaning, Inc.:
2021
2020
Service revenue $ 523,000 $ 476,000
385,500
34,375
Net income $ 103,125 $ 117,150
319,800
Operating expenses
Income tax expense
39,050
6
10 Purpose
11 The purpose of this problem is to demonstrate an understanding of preparing a vertical analysis schedule.
12
13 Instructions
14 After analyzing the transactions, prepare a vertical analysis schedule for the company for 2021 and 2020 using service revenue
15 as the base amount. Round percentages to two decimal places.
16
17 Guidance
18 For formatting guidance, see the vertical analysis examples that are provided in Chapter 13 of the textbook.
6T…
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I have answered A-F (in the pictures I posted below) I need the answers for G-L !
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Required information
[The following information applies to the questions displayed below.]
Leach Incorporated experienced the following events for the first two years of its operations.
Year 1:
1. Issued $16,000 of common stock for cash.
2. Provided $84,600 of services on account.
3. Provided $42,000 of services and received cash.
4. Collected $75,000 cash from accounts receivable.
5. Paid $44,000 of salaries expense for the year.
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent
of the ending accounts receivable balance will be uncollectible.
7. Closed the revenue account.
8. Closed the expense accounts.
Year 2:
1. Wrote off an uncollectible account for $950.
2. Provided $94,000 of services on account.
3. Provided $38,000 of services and collected cash.
4. Collected $87,000 cash from accounts receivable.
5. Paid $71,000 of salaries expense for the year.
6. Adjusted the accounts to reflect uncollectible accounts…
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