2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Average | Projected share price | Formula used | ||
a) | Price ($) | 61.85 | 82.34 | 104.97 | 132.25 | 134.08 | 189.53 | Given | ||
b) | Revenue ($M) | 70395 | 74754 | 78812 | 83176 | 88519 | 94595 | Given | ||
c) | Net income ($M) | 3883 | 4535 | 5385 | 6345 | 7009 | 7957 | Given | ||
d) | # of shares out (M) | 1570 | 1511 | 1434 | 1346 | 1283 | 1234 | Given | ||
e) | Operating cashflows ($M) | 6651 | 6975 | 7628 | 8242 | 9373 | 9783 | Given | ||
f) | EPS (f=c/d) | 2.4732 | 3.0013 | 3.7552 | 4.7140 | 5.4630 | 6.4481 | EPS= Net income/ No. of shares outstanding | ||
g) | SPS (g=b/d) | 44.8376 | 49.4732 | 54.9596 | 61.7949 | 68.9938 | 76.6572 | SPS= Revenue/ No. of shares outstanding | ||
h) | CFPS (h= e/d) | 4.2363 | 4.6161 | 5.3194 | 6.1233 | 7.3055 | 7.9279 | CFPS= Operating cashflows/ No. of shares outstanding | ||
i) | P/E (i= a/f) | 25.0076 | 27.4346 | 27.9530 | 28.0549 | 24.5434 | 29.3930 | 27.0644 | P/E= Price per share/Earning per share | |
j) | P/SPS (j= a/g) | 1.3794 | 1.6643 | 1.9100 | 2.1401 | 1.9434 | 2.4724 | 1.9183 | P/SPS= Price per share/Sales per share | |
k) | P/CFPS (k= a/h) | 14.6000 | 17.8374 | 19.7335 | 21.5977 | 18.3532 | 23.9068 | 19.3381 | P/CFPS= Price per share/CFPS | |
EPS_G | 21.12% | See below | ||||||||
SPS_G | 11.32% | See below | ||||||||
CFPS_G | 13.35% | See below | ||||||||
P/E method | 211.37 | See below | ||||||||
P/SPS method | 163.70 | See below | ||||||||
P/CFPS method | 173.78 | See below | ||||||||
Calculation of average ratios | ||||||||||
P/E= (25.01+27.43+27.95+28.05+24.54+29.39)/6 = 27.0644 | ||||||||||
P/SPS= (1.38+1.66+1.91+2.14+1.94+2.47)/6= 1.9183 | ||||||||||
P/CFPS= (14.60+17.84+19.73+21.60+18.35+23.91)/6= 19.3381 | ||||||||||
Calculation of growth rate | ||||||||||
Growth rate= ((End value/Start value)^(1/no of years))-1 | ||||||||||
EPS= ((6.44814/2.47325)^(1/5))-1= 21.12% | ||||||||||
SPS= ((76.65721/44.83758)^(1/5))-1= 11.32% | ||||||||||
CFPS= ((7.92788/4.23631)^(1/5))-1= 13.35% | ||||||||||
Calculation of share price | ||||||||||
Expected EPS 2018= EPS of 2017+ growth | ||||||||||
Expected EPS= 6.44814*121.12%= $ 7.80998 | ||||||||||
Similarly, | ||||||||||
Expected SPS= 76.65721*111.32%= $85.33481 | ||||||||||
Expected CFPS= 7.92788*113.35%= $ 8.98625 | ||||||||||
Therefore, share price by different methods can be arrived as:- | ||||||||||
Share price by P/E method= Expected EPS * Average P/E ratio= 7.8099*27.0644= $211.37 | ||||||||||
Share price by P/SPS method= Expected SPS * Average P/SPS ratio= 85.3348*1.9183= $163.70 | ||||||||||
Share price by P/CFPS method= Expected CFPS * Average P/CFPS ratio= 8.98625*19.3381= $173.78 |
Please show with all steps HD Projected share price 2013 82.34 $ $ $ $ $...
included in Appetit LO13-1, LO13-2, LO13-4 EXERCISE 13.15 Home Depot, Inc. Using a Statement of Cash Flows Statements of cash flow for Home Depot, Inc., for 2013, 2014, and 2013 are include of this text. a. Focus on the information for 2015 (year ending January 31, 2010). How does compare with net cash provided by or used in operations, and what accounts for the difference between the two amounts? does not eating unts for the per the major uses of...