Instructions

This assignment asks you to perform some valuation calculations using the formulas and examples discussed on pages 348-353. For the purposes of this assignment, assume a venture with the following characteristics: $108,000 in assets $18,000 in net profits Desired VC investment of $350,000 VC desires an investment multiple of 4X $15,000 in liabilities $4,500 in inventory $540,000 in net sales Projected profits of $180,000 in Year 5 Price-earnings multiple of a similar company is 15 Upload a document (Word or Excel, whatever you find more convenient) showing the correct calculations (and answers) for each of the following: 1.) The venture's current liquidity ratio 2.) The venture's acid test ratio 3.) The venture's debt ratio 4.) The percentage of ownership the venture would need to give up to obtain the desired $350,000 from a VC firm