Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Show Full Process/Details with Formula on Excel.
Calculate (1) Horizon Value (HV) or Terminal Value (TV) and (2) Value of Operations
Transcribed Image Text:Company Financial Statements (Mllions, Except for Per Share Data)
INCOME STATEMENTS
BALANCE SHEETS
2018
5,000
2019 Assets
2018
2019
Net sales
4,760
3.560
Cash
ST Investments
Accounts receivable
Inventories
Total CA
Net PP&E
60
50
COGS (excl. depr.)
3,800
40
Depreciation
Other operating expenses
170
200
380
500
1,000
480
1550
500
820
EBIT
500
1,300
1,550
Interest expense
120
1,700
2,000
100
Pre-tax earnings
450
380
Total assets
3,000
3,550
Taxes (40%)
180
152
NI before pref. div.
Preferred div.
Liabilities and equity
Асcounts payable
Accruals
Notes payable
Total CL
$50 Long-term bonds
S170 Total liabilities
40% Preferred stock
270
8
228
8
190
200
Net income
262
220
280
300
130
280
Other Data
600
780
Common dividends
$48
1,000
1,200
Addition to RE
$214
1,600
1,980
Tax rate
40%
100
100
Shares of common stock
50
50 Common stock
500
500
970
Earnings per share
Dividends per share
$4.40 Retained earnings
$1.00 Total common equity
$27.00 Total liabs. & equity
$5.24
800
$0.96
1,300
1,470
Price per share
$40.00
3,000
3,550
Actual
Forecast
Sales Revenues
2019
2020
2021
2022
2023
2024
Net sales
5000
5500
5940
6355.8
6673.59 7007.27
Operating Assets and Operating Liabilities
Cash
50
55
59.4
63,558
66,74
70.07
Accounts receivable
500
550
594
635.58
667.36
700.73
Inventories
1000
1100
1188
1271.16
1334.72
1401.45
Net PP&E
2000
2200
2376
2542.32
2669.44
2802.91
Accounts payable
200
220
237.6
254.232
266.94
280.29
Accruals
300
330
356.4
381.348
400.42
420,44
Operating Income
COGS (excl. depr.)
3800
4180
4514.4
4830.408
5071.93
5325.52
200
220
237.6
254.232
266.94
Depreciation
Other operating expenses
280.29
500
550
594
635.58
667.36
700.73
EBIT
500
550
594
635.58
667.36
700.73
Net operating profit after taxes
300
330
356.4
381.348
400.42
420.44
Free Cash Flows
1247.4
1471.53
Net operating working capital
Total operating capital
FCF = NOPAT - A op capital
1050
1155
1334.718
1401,45
3623.4
4070.89
206,56
3050
3355
3877.038
4274.43
-260
88
127.71
216.89
Target WACC
10.97%
10.97%
10.97%
10.97%
10.97%
Growth rates in FCF
252.00%
45.12%
61.74%
5.00%
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