You have been asked to value price of Kyundai Motor Company, a large privately-held automobile manufacturer. Due to lack of data regarding the company, you collect information about three publicly traded car manufacturers. All firms operate only in the automobile industry. The data on Kyundai and the three other car manufacturers are presented below (all quoted dollars are in millions) : Koyota Konda Kord Kyundai Cash 6.8 4.4 9.1 --- Sales 23.5 36.3 14.9 21.7 Dividend 2.4 1.7 0.7 2.3 Value 114.6 94.8 106.5 --- Do you observe any shortcomings of valuation by multiples above?
You have been asked to value price of Kyundai Motor Company, a large privately-held automobile manufacturer. Due to lack of data regarding the company, you collect information about three publicly traded car manufacturers. All firms operate only in the automobile industry. The data on Kyundai and the three other car manufacturers are presented below (all quoted dollars are in millions) : Koyota Konda Kord Kyundai Cash 6.8 4.4 9.1 --- Sales 23.5 36.3 14.9 21.7 Dividend 2.4 1.7 0.7 2.3 Value 114.6 94.8 106.5 --- Do you observe any shortcomings of valuation by multiples above?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 19CE
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Question
You have been asked to value price of Kyundai Motor Company, a large privately-held automobile manufacturer. Due to lack of data regarding the company, you collect information about three publicly traded car manufacturers. All firms operate only in the automobile industry. The data on Kyundai and the three other car manufacturers are presented below (all quoted dollars are in millions) :
| Koyota | Konda | Kord | Kyundai | |
| Cash | 6.8 | 4.4 | 9.1 | --- |
| Sales | 23.5 | 36.3 | 14.9 | 21.7 |
| Dividend | 2.4 | 1.7 | 0.7 | 2.3 |
| Value | 114.6 | 94.8 | 106.5 | --- |
- Do you observe any shortcomings of valuation by multiples above?
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