Below is selected current financial data about Davis Distributions. Calculate the value of the company based on
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Question:
Below is selected current financial data about Davis Distributions.
Calculate the value of the company based on the data provided.
The discount rate to be used for all years is 10%.
DESCRIPTION | YEAR 1 |
Cash | $110,000 |
Accounts Receivables | $380,000 |
Inventory | $350,000 |
Property, Plant, and Equipment | $900,000 |
Accumulated Depreciation -Property, Plant, and Equipment | ($40,000) |
Other Assets | $100,000 |
Accounts Payables | $120,000 |
Accrued Expenses | $80,000 |
Accrued Revenue | $360,000 |
Notes Payable First Bank (Short Term) | $40,000 |
Note Payable First Bank (long term) | $800,000 |
Capital Stock (Common Shareholders') | $100,000 |
Capital Stock (Preferred Shareholders') | $100,000 |
Retained Earnings | $200,000 |
DESCRIPTION | YEAR 1 AMOUNT |
Revenue | $800,000 |
Cost of Goods Sold | ($480,000) |
Gross Margin | $320,000 |
Operating Expenses | ($80,000) |
Selling, General, and Administrative Expenses (including Depreciation Expense) | ($140,000) |
Net Income | $100,000 |
YEAR 2 | YEAR 3 | YEAR 4 | |
Revenue | $1,000,000 | $1,200,000 | $1,400,000 |
Cost of Goods Sold | ($450,000) | ($550,000) | ($650,000) |
Gross Margin | $550,000 | $650,000 | $750,000 |
Depreciation Expense | ($20,000) | ($20,000) | ($20,000) |
Other Expenses | ($230,000) | ($230,000) | ($230,000) |
Net Income | $300,000 | $400,000 | $500,000 |
Net Change in Working Capital | ($400,000) | $200,000 | $600,000 |
Projected Capital Expenditures | $100,000 | $100,000 | $100,000 |
Dividends to Preferred Shareholders' | $50,000 | $50,000 | $50,000 |
Related Book For
Elementary Statistics
ISBN: 978-0538733502
11th edition
Authors: Robert R. Johnson, Patricia J. Kuby
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