Rakesh Ltd has a revenue of INR 10 lakhs. Its operating loss is INR 3 lakhs....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rakesh Ltd has a revenue of INR 10 lakhs. Its operating loss is INR 3 lakhs. EBITDA has been recorded at negative INR 2 lakhs. Its Market Capitalization is INR 50 lakhs. No. of shares is 5 lakhs. The company has registered a Net Loss of INR 3 lakhs. The company does not have debt. Cash is Rs. 500,000. Future FCFF is negative INR 1 lakh for the next five years. The industry EV/EBITDA is 5x Price to Sales ratio is 2x and P/E ratio is 4x WACC is 8%. Which method of valuation would suite the company? Calculate the value of the company using a suitable method. What are the strengths and shortcoming o the method you have used? Rakesh Ltd has a revenue of INR 10 lakhs. Its operating loss is INR 3 lakhs. EBITDA has been recorded at negative INR 2 lakhs. Its Market Capitalization is INR 50 lakhs. No. of shares is 5 lakhs. The company has registered a Net Loss of INR 3 lakhs. The company does not have debt. Cash is Rs. 500,000. Future FCFF is negative INR 1 lakh for the next five years. The industry EV/EBITDA is 5x Price to Sales ratio is 2x and P/E ratio is 4x WACC is 8%. Which method of valuation would suite the company? Calculate the value of the company using a suitable method. What are the strengths and shortcoming o the method you have used?
Expert Answer:
Answer rating: 100% (QA)
Based on the given financial information one suitable method of valuation for Rakesh Ltd could be the Discounted Cash Flow DCF method DCF takes into account the future cash flows of the company and di... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The adjusted trial balance for Sweet Home Catering, Inc., is presented below. Prepare the income statement and statement of retained earnings for Sweet Home Catering, Inc., for the month ended March...
-
Find two positive integers such that the sum of the first number and four times the second number is 1000 and the product of the numbers is as large as possible.
-
A charged cork ball of mass 1.00 g is suspended on a light string in the presence of a uniform electric field as shown in Figure P23.55. When E = (3.00i + 5.00j) x 105 N/C, the ball is in equilibrium...
-
The Bonferroni-adjusted P-value is always greater than the uncorrected P-value. In Exercises 5 and 6, determine whether the statement is true or false. If the statement is false, rewrite it as a true...
-
Shrieves Casting Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by Sidney Johnson, a recently graduated MBA. The production line...
-
A machine has a first cost of P 7 3 5 0 0 and a salvage value of P 3 5 0 0 at the end of its useful life of 8 years. Evaluate the depreciation of the machine at during the 5 th year using the...
-
Journalize the following transactions into the general journal. The chart of accounts, the trial balance from January, 1 2020, schedule of accounts payable, and the schedule of accounts receivable is...
-
Gargiulo Company, a 90% owned subsidiary of Posito Corporation, sells inventory to Posito at a 25% profit on selling price. The following data are available pertaining to intra-entity purchases....
-
Write a Python script that connects to a SQL database, creates a new table, inserts some data, and retrieves the data
-
Novak Corporation purchased a truck by issuing an $120,000, 5-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal...
-
How well do PostgreSQL skills align with Microsoft windows upgrade?
-
Show the following list after each pass of an insertion sort (the list is being sorted into ascending order). 853914
-
Describe the file system, or systems used by Microsoft Windows operating system.?
-
Take on the role of the administrator of a 550-bed level 2 hospital. For the past 10 years, your facility has received numerous awards for exceeding various quality metrics. Your service line...
-
Chloroplasts are illuminated until the levels of the Calvin cycle intermediates reach a steady state. The light is then turned off. How does the level of RuBP vary after this point?
-
Sally and Charles Heck received the following dividends and interest during 2012: Assuming the Hecks file a joint tax return, complete Schedule B of Form 1040 (on page 2-33) for them for the 2012 tax...
-
Quince Interests is a partnership with a tax year that ends September 30, 2012. During that year, Potter, a partner, received $3,000 per month as a guaranteed payment, and his share of partnership...
-
If Charles, a 16-year-old child model, earns $50,000 a year and is completely self supporting even though he lives with his parents, can his parents claim him as a dependent? Why or why not?...
-
a. Indicate the scope of data and procedural controls, b. Describe the activities of a data control group.
-
a. What are documentation controls in an EDP department? b. Why is documentation important to management and the auditor? c. What items should be included in documentation for an EDP department?
-
a. Indicate the purpose of each of the three types of application controls, b. Identify the categories of controls pertaining to the conversion of data.
Study smarter with the SolutionInn App