See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute

QUESTION

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydecos PE ratio each year from 2009 to 2013. In which year was it the highest? b. What was Mydecos Enterprise Value to EBITDA ratio each year? In which year was it the highest? c. What might explain the differing time pattern of the two valuation ratios? Table 2.5 Mydeco Corp. 20092013 (All data as of fiscal year end; in $ million) Income Statement 2009 2010 2011 2012 2013 Revenue 404.3 363.8 424.6 510.7 604.1 Cost of Goods Sold (188.3) (173.8) (206.2) (246.8) (293.4) Gross Profit 216.0 190.0 218.4 263.9 310.7 Sales and Marketing (66.7) (66.4) (82.8) (102.1) (120.8) Administration (60.6) (59.1) (59.4) (66.4) (78.5) Depreciation & Amortization (27.3) (27.0) (34.3) (38.4) (38.6) EBIT 61.4 37.5 41.9 57.0 72.8 Interest Income (Expense) (33.7) (32.9) (32.2) (37.4) (39.4) Pretax Income 27.7 4.6 9.7 19.6 33.4 Income Tax (9.7) (1.6) (3.4) (6.9) (11.7) Net Income 18.0 3.0 6.3 12.7 21.7 Shares outstanding (millions) 55.0 55.0 55.0 55.0 55.0 Earnings per share $0.33 $0.05 $0.11 $0.23 $0.39 Balance Sheet 2009 2010 2011 2012 2013 Assets Cash 48.8 68.9 86.3 77.5 85 Accounts Receivable 88.6 69.8 69.8 76.9 86.1 Inventory 33.7 30.9 28.4 31.7 35.3 Total Current Assets 171.1 169.6 184.5 186.1 206.4 Net Property, Plant & Equip. 245.3 243.3 309 345.6 347 Goodwill & Intangibles 361.7 361.7 361.7 361.7 361.7 Total Assets 778.1 774.6 855.2 893.4 915.1 Liabilities & Stockholders Equity Accounts Payable 18.7 17.9 22 26.8 31.7 Accrued Compensation 6.7 6.4 7 8.1 9.7 Total Current Liabilities 25.4 24.3 29 34.9 41.4 Long-term Debt 500 500 575 600 600 Total Liabilities 525.4 524.3 604 634.9 641.4 Stockholders Equity 252.7 250.3 251.2 258.5 273.7 Total Liabilities & Stockholders Equity 778.1 774.6 855.2 893.4 915.1 Statement of Cash Flows 2009 2010 2011 2012 2013 Net Income 18 3 6.3 12.7 21.7 Depreciation & Amortization 27.3 27 34.3 38.4 38.6 Chg. in Accounts Receivable 3.9 18.8 0 -7.1 -9.2 Chg. in Inventory -2.9 2.8 2.5 -3.3 -3.6 Chg. in Payables & Accrued Comp. 2.2 -1.1 4.7 5.9 6.5 Cash from Operations 48.5 50.5 47.8 46.6 54 Capital Expenditures (25.0) (25.0) (100.0) (75.0) (40.0) Cash from Investing Activities (25.0) (25.0) (100.0) (75.0) (40.0) Dividends Paid (5.4) (5.4) (5.4) (5.4) (6.5) Sale (or purchase) of stock Debt Issuance (Pay Down) 75.0 25.0 Cash from Financing Activities (5.4) (5.4) 69.6 19.6 (6.5) Change in Cash 18.1 20.1 17.4 (8.8) 7.5 Mydeco Stock Price $7.92 $3.30 $5.25 $8.71 $10.89

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