Consider the following balance sheet and income statement for Mmm Good Foods Incorporated (thecompany that operates Tasty Fried Chicken and Pizza Party), in condensed form, including someinformation from the cash flow statement: (amounts are in millions)Mmm GoodFoodsIncorporated2019Balance Sheet$ 72238854462Cash and short-term InvestmentsAccounts receivableInventoryOther current assets4,104$5,730$1,45911,170Long-lived assetsTotal assetsCurrent liabilitiesTotal liabilitiesNoncontrolling interestShareholders' equityTotal liabilities and equity(5,440)$5,730Income StatementSales$ 6,5463,588$2,958$ 1,643Cost of salesGross marginEarnings before interest and taxesInterest325342TaxesIncome from discontinued operations607$1,583$ 815.91356.8Net incomeShare priceEarnings per shareNumber of outstanding shares (millions)Cash FlowsCash flow from operationsCapital expendituresDividends$ 1,222404784Required:Determine the valuation of the company at the end of 2019 using each of the following three methods.Assume earnings and cash flows for the coming 10 years are equal to the earnings and cash flows in2019; the appropriate free cash flow multiple is 23.4. (Enter your answers in millions rounded tonearest whole number.)a. Market capitalization.b. Enterprise value.c. Free cash flow multiple. a. Market capitalizationmillionb. Enterprise valuemillionc. Free cash flow multiplemillionReferencesLearning Objective: 20-04 Apply thedifferent methods for business analysisand business valuation.WorksheetDifficulty: 2 Medium

Market Capitalization: Market Capitalization = Number of shares outstanding ×Market price per share…

Required: Determine the valuation of the company at the end of 2019 using each of the following three methods. Assume earnings and cash flows for the coming 10 years are equal to the earnings and cash flows in 2019; the appropriate free cash flow multiple is 23.4. (Enter your answers in millions rounded to nearest whole number.) a. Market capitalization. b. Enterprise value. c. Free cash flow multiple.

Required: Determine the valuation of the company at the end of 2019 using each of the following three methods. Assume earnings and cash flows for the coming 10 years are equal to the earnings and cash flows in 2019; the appropriate free cash flow multiple is 23.4. (Enter your answers in millions rounded to nearest whole number.) a. Market capitalization. b. Enterprise value. c. Free cash flow multiple.

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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Prepare Projected Balance Sheet
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