A company with 0 net debt has sales of 10m, EBIT of 2m And net income...
A company with 0 net debt has sales of 10m, EBIT of 2m And net income of 1.8m. Harmonic mean of comparable companies multiples is 1 for EV/Sales, 5 for EV/EBIT and 10 for P/E. What can be the explanations to the high P/E ratio of the peers?
A. Comparable companies face low corporate income tax rates. B. are more leveraged C.have lower growth prospects D. ALL
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Answer:: Option C
Lower tax rate means higher income & higher earnings which leads to lower P/E ratio. More leveraged firms reduces net income resuling in lower P/E ratios
Lower growth prospects leads to low earnings which leads to high P/E ratios
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A company with 0 net debt has sales of 10m, EBIT of 2m And net
income...
Please help me do this if you know, thank you very much and please step by step that makes me bet...
Please help me do this if you know, thank you very much and
please step by step that makes me better understand.
1. Valuation of Firms The private equity firm Greylock Group LLC is looking to sell a stake in the automotive manufacturer VRT Automotive Co, a relatively new entrant in the auto parts manu- facturing industry, via an initial public offering (IPO). Greylock acquired its stake in VRT several years ago and has been able to improve the efficiency...
Firm M is a mature company in a mature industry. Its annual net income and net...
Firm M is a mature company in a mature industry. Its annual net income and net cash flows are consistently high and stable. However, M's growth prospects are quite limited, so its capital budget is small relative to its net income. Firm N is a relatively new company in a new and growing industry. Its markets and products have not stabilized, so its annual operating income fluctuates considerably. However, N has substantial growth opportunities, and its capital budget is expected...
How to get picture 1 "Cost of Sales" and picture 2 "Net Income or Net Earnings",...
How to get picture 1 "Cost of Sales" and picture 2 "Net Income
or Net Earnings", thank you.
February 1, 2020 February 2 2019 Year Ended February 3, 2018 Jamiary 28, 2017 January 30, 2016 3. Total Assets S S Total Liabilities Total Equity or Total Shareholders Investments Financial Statement Name as stated in the 10-K Statement of Operations Data: Net sales Gross profit Selling, general and administrative expenses Operating income (loss) 23,610.8 S 7,040.7 5.778.5 1.262.2 22,823.3 $ 6.947.5...
Preston Industries has two separate divisions. Each division is in a separate line of business. Division...
Preston Industries has two separate divisions. Each division is in a separate line of business. Division A is the largest division and represents 70 percent of the firm's overall sales. Division A is also the riskier of the two divisions. Division B is the smaller and Icast risky of the two. When management is deciding which of the various divisional projects should be accepted, the managers should: A. Allocate more funds to Division A since it is the largest of...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 122,760 Accounts payable $ 133,920 Receivables 446,400 Other current liabilities 156,240 Inventories 301,320 Notes payable to bank 55,800 Total current assets $ 870,480 Total current...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 84,000 Accounts payable $ 119,000 Receivables 252,000 Other current liabilities 105,000 Inventories 196,000 Notes payable to bank 84,000 Total current assets $ 532,000 Total current...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash $221,260 Accounts payable $255,300 Receivables 629,740 Other current liabilities 187,220 Inventories 476,560 Notes payable to bank 170,200 Total current assets $1,327,560 Total current liabilities $612,720 Long-term...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 107,360 Accounts payable $ 214,720 Receivables 496,540 Other current liabilities 214,720 Inventories 389,180 Notes payable to bank 80,520 Total current assets $ 993,080 Total current...
Data for Barry Computer Co, and its industry averages follow. The firm's debt is priced at par,...
Data for Barry Computer Co, and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash Accounts payable $82,225 Receivables $56,925 202,400 164,450 Other current liabilities 101,200 Inventories Notes payable to bank 44,275 Total current assets $423,775 Total current liabilities $227,700 $132,825...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 131,250 Accounts payable Receivables 253,125 Other current liabilities Inventories 196,875 Notes payable to bank Total current assets $581,250 Total current liabilities Long-term debt Net fixed...
Please help me do this if you know, thank you very much and
please step by step that makes me better understand.
1. Valuation of Firms The private equity firm Greylock Group LLC is looking to sell a stake in the automotive manufacturer VRT Automotive Co, a relatively new entrant in the auto parts manu- facturing industry, via an initial public offering (IPO). Greylock acquired its stake in VRT several years ago and has been able to improve the efficiency...
How to get picture 1 "Cost of Sales" and picture 2 "Net Income
or Net Earnings", thank you.
February 1, 2020 February 2 2019 Year Ended February 3, 2018 Jamiary 28, 2017 January 30, 2016 3. Total Assets S S Total Liabilities Total Equity or Total Shareholders Investments Financial Statement Name as stated in the 10-K Statement of Operations Data: Net sales Gross profit Selling, general and administrative expenses Operating income (loss) 23,610.8 S 7,040.7 5.778.5 1.262.2 22,823.3 $ 6.947.5...
Preston Industries has two separate divisions. Each division is in a separate line of business. Division A is the largest division and represents 70 percent of the firm's overall sales. Division A is also the riskier of the two divisions. Division B is the smaller and Icast risky of the two. When management is deciding which of the various divisional projects should be accepted, the managers should: A. Allocate more funds to Division A since it is the largest of...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash $221,260 Accounts payable $255,300 Receivables 629,740 Other current liabilities 187,220 Inventories 476,560 Notes payable to bank 170,200 Total current assets $1,327,560 Total current liabilities $612,720 Long-term...
Data for Barry Computer Co, and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash Accounts payable $82,225 Receivables $56,925 202,400 164,450 Other current liabilities 101,200 Inventories Notes payable to bank 44,275 Total current assets $423,775 Total current liabilities $227,700 $132,825...
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 131,250 Accounts payable Receivables 253,125 Other current liabilities Inventories 196,875 Notes payable to bank Total current assets $581,250 Total current liabilities Long-term debt Net fixed...
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