Balance sheet as of December 31t... Income Statement for the year 2017 (in $ mil

Question

Balance sheet as of December 31t... Income Statement for the year 2017 (in $ millions) 1 Cash A/R Inventories 600 490 Accruals Current Assets 990 789 Curren Liab. 640 620 Operating Expenses 560 (in $ millions) 2017 2016 150 99 A/P 240 200 N/P 2017 2016 280 260 Sales 360 360 COGS 0 2,810 1,686 1.124 0 Gross profit 700 700 Depreciation expense 140 L.T Debt Comm. Stock par 195 95 EBIT 424 Gross Fixed Assets Accum. Depr. 1,400 1,260 Ret. Earnings 595 554 EBT 2,840 2,840 Paid-in capital 300 300 Interest expense 1,049| 138 206 Net fixed assets 1,440 1,580| Common Equity 1,090 Tax (40%) Total Assets 2,430 2.369 Total Liab, & Eq.2430 2.369 Net Income Dividend payout ratio Number of shares outstanding Normal P/E ratio Normal P/CFPS ratio 13 -80% Other information: 150 million shares 16 4. What was the net margin of the company in 2017? 5. Calculate the value of the stock at the end of 2017 using the P/E price multiple 6. Calculate the value of the stock at the end of 2017 using the P/CF price multiple

Explanation / Answer

4: Net Margin 2017 = 206 / 2810 = 7.33% 5: Stock value P/E 2017 = P/E * (NI/OS) = 16 *(206 / 150) = 21.97 6: Stock value P/CF 2017 = P/cf * (FCF/OS) = 13 * (216 / 150) = 18.72 per share FCF = Cash from operating activities - capital expenditure = 206+140-ar 40 - INV 110 + ap 20 = 216 - C Exp 0 = FCF 216

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