In year 0, SmoothCo has $50 million in cash and $50 million in inventory, financed by $100
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The case started in year 1 is resolved for $5 million in cash. Because management overestimated the amount of litigation charges, SmoothCo takes a $5 million gain in year 2. What is ROE in year 2? How is ROE distorted by the litigation expense?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Valuation Measuring and managing the values of companies
ISBN: ?978-0470424704
5th edition
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
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