Question: (Essay-type question. Show your work step by step in order to get points. You can either respond by uploading a file and/or by using the

(Essay-type question. Show your work step by step in order to get points. You can either respond by uploading a file and/or by using the keyboard.)

Use the tables for the question(s) below.

Year	2005
($ millions)
Sales	75
Gross Profit	1
EBITDA	16.30
Net Income	6.4
Total Current Assets	37.3
Debt	4.5
Accounts Payable	4.7
Total Liabilities	9.2

The following are financial ratios for three comparable companies:

Ratio	Oakley, Inc.	Luxottica Group	Nike, Inc.
P/E	24.8x	28x	18.2x
EV/Sales	2x	3x	1.5x
EV/EBITDA	11.6x	14.4x	9.3x
EBITDA/Sales	17.0%	18.5%	15.9

Based upon the average EV/Sales ratio of the comparable firms, if Ideko holds $6.5 million of cash in excess of its working capital needs, then calculate Ideko's target market value of equity.

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