Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation

Year

2005

Year

2005

Income Statement($ 000)

Balance Sheet($ 000)

1Sales

75,000

Assets

2 Cost of Goods Sold

1 Cash and Equivalents

12,664

3 Raw Materials

(16,000)

2 Accounts Receivable

18,493

4 Direct Labor Costs

(18,000)

3 Inventories

6165

5 Gross Profit

1000

4Total Current Assets

37,322

6 Sales and Marketing

(11,250)

5 Property, Plant, and Equipment

49,500

7 Administrative

(13,500)

6 Goodwill

8EBITDA

16,250

7Total Assets

86,822

9 Depreciation

(5500)

Liabilities andStockholder's Equity

10EBIT

10,750

8 Accounts Payable

4654

11 Interest Expense(net)

(75)

9 Debt

4500

12Pretax Income

10,675

10Total Liabilities

9154

13 Income Tax

(3736)

11Stockholder's Equity

77,668

14Net Income

6939

12Total Liabilities and Equity

86,822

The following are financial ratios for three comparablecompanies:

Ratio

Oakley, Inc.

Luxottica Group

Nike, Inc.

P/E

24.8x

28x

18.2x

EV/Sales

2x

2.7x

1.5x

EV/EBITDA

11.6x

14.4x

9.3x

EBITDA/Sales

17.0%

18.5%

15.9

Based upon the averageP/E ratio of the comparablefirms, Ideko's target market value of equity is closestto:

A.

$164 million

B.

$155 million

C.

$193 million

D.

$157 million