P6-6. Ancient Times Corp., a closed corporation and selling its shares to aninvestor. The statement of income of the company for the period endingDecember 31, 2019 is as follows:Ancient Times Corp.Statement of IncomeFor the Period Ending December 31, 2019(in million pesos)1500900RevenueCost of SalesGross ProfitOperating ExpensesOperating IncomeInterest ExpenseNet Income60030030075225Ancient Times depreciation is Php50 million and is exempted from payingcorporate income tax. The industry where Ancient Times recognizes theEBITDA Multiple of 2.75.• How much is the EBITDA of Ancient Times for the Period?• How much is the market value of Ancient Times?If the owners is willing to sell 50% of the ownership at Php500Million, are you going to buy the company's stake?

1. EBITDA = Net income + Income tax + Interest + Depreciation + Amortization Given: Net Income =…

P6-6. Ancient Times Corp., a closed corporation and selling its shares to ar investor. The statement of income of the company for the period ending December 31, 2019 is as follows: Ancient Times Corp. Statement of Income For the Period Ending December 31, 2019 (in million pesos) 1500 Revenue Cost of Sales Gross Profit Operating Expenses Operating Income Interest Expense Net Income 900 600 300 300 75 225 Ancient Times depreciation is Php50 million and is exempted from paying corporate income tax. The industry where Ancient Times recognizes the EBITDA Multiple of 2.75. • How much is the EBITDA of Ancient Times for the Period? • How much is the market value of Ancient Times? • If the owners is willing to sell 50% of the ownership at Php500 Million, are you going to buy the company's stake?

P6-6. Ancient Times Corp., a closed corporation and selling its shares to ar investor. The statement of income of the company for the period ending December 31, 2019 is as follows: Ancient Times Corp. Statement of Income For the Period Ending December 31, 2019 (in million pesos) 1500 Revenue Cost of Sales Gross Profit Operating Expenses Operating Income Interest Expense Net Income 900 600 300 300 75 225 Ancient Times depreciation is Php50 million and is exempted from paying corporate income tax. The industry where Ancient Times recognizes the EBITDA Multiple of 2.75. • How much is the EBITDA of Ancient Times for the Period? • How much is the market value of Ancient Times? • If the owners is willing to sell 50% of the ownership at Php500 Million, are you going to buy the company's stake?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

P6-6. Ancient Times Corp., a closed corporation and selling its shares to an
investor. The statement of income of the company for the period ending
December 31, 2019 is as follows:
Ancient Times Corp.
Statement of Income
For the Period Ending December 31, 2019
(in million pesos)
1500
900
Revenue
Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Interest Expense
Net Income
600
300
300
75
225
Ancient Times depreciation is Php50 million and is exempted from paying
corporate income tax. The industry where Ancient Times recognizes the
EBITDA Multiple of 2.75.
• How much is the EBITDA of Ancient Times for the Period?
• How much is the market value of Ancient Times?
If the owners is willing to sell 50% of the ownership at Php500
Million, are you going to buy the company's stake?

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