Valuation Using Price$-$to$-$NOA Multiple

The following table provides summary data for Cerner Corporation and its competitors, Eclipsys Corporation and McKesson Corporation.

$($in millions$)$ Center Eclipsys McKesson

Company assumed value $--$ $$1,110$ $$17,119$

Equity assumed value $--$ $$1,110$ $$15,270$

Net operating assets $$1,328$ $$208$ $$8,354$

Book value of equity $$1,132$ $$208$ $$6,505$

Net nonoperating obligations $($assets$)$ $$196$ $$0$ $$1,849$

Common shares outstanding $80\mathrm{.}4$ shares $54\mathrm{.}0$ shares $288\mathrm{.}8$ shares

$($a$)$ Compute the price to net operating assets ratio for both Eclipsys and McKesson. $($Round your answers to two decimal places.$)$

Eclipsys Answer

McKesson Answer

$($b$)$ Use Eclipsys and McKesson as comparables, along with the rounded price to NOA ratios from part $($a$),$ and then estimate for Cerner its company intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. $($Round the intrinsic value and equity intrinsic value to the nearest million and the value per share to the nearest cent.$)$

Average of the two rounded ratios in $($a$)$ above

Answer

$($Round to two decimal places.$)$

Using the rounded average calculation above, calculate the following:

Intrinsic value $Answer

million

Equity intrinsic value $Answer

million

Equity intrinsic value per share $Answer