Problem

The balance sheet and income statement of Eastland Products, Inc., are as follows:...

The balance sheet and income statement of Eastland Products, Inc., are as follows:

Using these data, determine the following:

a. Earnings per share

b. Price-to-earnings ratio

c. Book value per share

d. Market-to-book ratio

e. EV-EBITDA multiple. Assume the cost of sales includes $10 million in depreciation expenses. Assume there are no amortization expenses.

f. How much of the retained earnings total was added during 2013?

g. Show Eastland’s new balance sheet after the company sells 1 million new common shares in early 2014 to net $30 a share. Part of the proceeds, $10 million, is used to reduce current liabilities, and the remainder is temporarily deposited in the company’s bank account. Later, this remaining amount (along with additional long-term debt financing) will be invested in new manufacturing facilities.

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