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PROBLEM 8-4 Given Cost of goods sold/Revenues Fixed operating costs Variable operating… 1 answer below » PROBLEM 8-4 Given Cost of goods sold/Revenues Fixed operating costs Variable operating costs/Revenues Depreciation expense Salary adjustments Annual outsourcing savings/Revenues Solution Legend 65% $250,000 10% $50,000 $100,000 10% Historical Incomes Statements for Toys ‘n Thing, Inc. 2010 Revenues $2,243,155 Cost of goods sold (1,458,051) Gross profits 785,104 General and Administrative Expenses* (474,316) Net Operating Income $310,789 = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball View complete question » PROBLEM 8-4 Given Cost of goods sold/Revenues Fixed operating costs Variable operating costs/Revenues Depreciation expense Salary adjustments Annual outsourcing savings/Revenues Solution Legend 65% $250,000 10% $50,000 $100,000 10% Historical Incomes Statements for Toys ‘n Thing, Inc. 2010 Revenues $2,243,155 Cost of goods sold (1,458,051) Gross profits 785,104 General and Administrative Expenses* (474,316) Net Operating Income $310,789 = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output 2009 $2,001,501 (1,300,976) 700,525 (450,150) $250,375 2008 $2,115,002 (1,374,751) 740,251 (461,500) $278,751 2010 $310,789 50,000 $360,789 Years 2009 $250,375 50,000 $300,375 *Includes depreciation expense of $50,000 per year. Solution a. Net Operating Income Plus: Depreciation expense EBITDA Valuation EBITDA Multiple 3 4 2008 $278,751 50,000 $328,751 2010 2009 2008 2010 $360,789 100,000 2009 $300,375 100,000 2008 $328,751 100,000 2010 2009 2008 Average b. EBITDA Plus: Salary adjustments Plus: Outsourcing savings Adjusted EBITDA Valuation Average Asking price = 5 x 2010 Unadjusted EBITDA Estimated value after adjustments EBITDA Multiple 3 4 Document Preview: Problem 8-4
Asking price = 5 x 2010 Unadjusted EBITDA
PROBLEM 8-4
= Qualitative analysis or Short answer required
Given
Cost of goods sold/Revenues
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
a.
Plus: Depreciation expense
Years
Plus: Salary adjustments
Estimated value after adjustments
b.
*Includes depreciation expense of $50,000 per year.
Valuation
EBITDA Multiple
Adjusted EBITDA
Solution
Fixed operating costs
Variable operating costs/Revenues
Depreciation expense
Salary adjustments
Annual outsourcing savings/Revenues
EBITDA
Average
Plus: Outsourcing savings
Revenues
Historical Incomes Statements for Toys ‘n Thing, Inc.
Cost of goods sold
Gross profits
General and Administrative Expenses*
Net Operating Income
0.65
$250,000.00
0.10
$50,000.00
$100,000.00
0.10
2010.00
2009.00
2008.00
$2,243,155.00
$2,001,501.00
$2,115,002.00
($1,458,050.75)
($1,300,975.65)
($1,374,751.30)
$785,104.25
$700,525.35
$740,250.70
($474,315.50)
($450,150.10)
($461,500.20)
$310,788.75
$250,375.25
$278,750.50
2010.00
2009.00
2008.00
$310,788.75
$250,375.25
$278,750.50
$50,000.00
$50,000.00
$50,000.00
$360,788.75
$300,375.25
$328,750.50
2010.00
2009.00
2008.00
3.00
4.00
2010.00
2009.00
2008.00
$360,788.75
$300,375.25
$328,750.50
$100,000.00
$100,000.00
$100,000.00
2010.00
2009.00
2008.00
3.00
4.00
Problem 8-4
Asking price = 5 x 2010 Unadjusted EBITDA
PROBLEM 8-4
= Qualitative analysis or Short answer required
Given
Cost of goods sold/Revenues
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
a.
Plus: Depreciation expense
Years
Plus: Salary adjustments
Estimated value after adjustments
b.
*Includes depreciation expense of $50,000 per year.
Valuation
EBITDA… Attachments: Q.-Attachment….xls View less » Sep 09 2015 …
