uppose that in January 2006, Kenneth Cole Productions had sales of $535 million, EBITDA of $56.5 million, excess cash of $105 million, $3.8 million of debt, and 22 million shares outstanding. Use the multiples approach estimate KCP's value based on the following data om comparable firms: E Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above?
uppose that in January 2006, Kenneth Cole Productions had sales of $535 million, EBITDA of $56.5 million, excess cash of $105 million, $3.8 million of debt, and 22 million shares outstanding. Use the multiples approach estimate KCP's value based on the following data om comparable firms: E Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above?
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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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Suppose that in January 2006, Kenneth Cole Productions had sales of $535 million, EBITDA of $56.5 million, excess cash of $105 million, $3.8 million of debt, and 22 million shares outstanding. Use the multiples approach to estimate KCP's value based on the following data
from comparable firms:
a. Using the average enterprise value to sales multiple in the table above, estimate KCP's share price.
b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above.
c. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price.
d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above?
Transcribed Image Text:(Click on the following icon in order to copy its contents into a spreadsheet.)
P
Price
Ē
Book
15.01
+ 51%
- 42%
Average
Maximum
Minimum
2.84
+ 186%
- 61%
Enterprise Value Enterprise Value
EBITDA
Sales
1.06
8.49
+ 106%
+ 27%
- 56%
- 22%
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