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Damm [24]
1 year ago
14

The director of research has asked you to produce a pro forma valuation of a target company using leveraged buyout analysis. A c

ompany has $260 million of EBITDA. The transaction purchase price is 8.5 times EBITDA, and the equity contribution is 20%. If the transaction is completed, what will be the debt-to-EBITDA ratio
Business
1 answer:
statuscvo [17]1 year ago
4 0

6.8  will be the debt-to-EBITDA ratio.

EBITDA* 8.5=Transaction Value

(Transaction value * 0.8) / EBITDA = 6.8

EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company's overall financial performance and is used as an alternative to net income in certain circumstances. However, EBITDA can be misleading because it does not reflect the cost of capital investments such as property, plant, and equipment.

This metric also excludes debt-related expenses by adding interest and tax costs to revenues. However, it is a more accurate measure of business performance as it is able to report profit before the effect of accounting and financial deductions.

Learn more about the debt-to-income ratio here: brainly.com/question/24814852

#SPJ4

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You have an investment that will pay you 1.18 percent per month. a. How much will you have per dollar invested in one year? (Do
fiasKO [112]

Answer:

The correct answer for option (a) is $1.15 and for option (b) is $1.33.

Explanation:

According to the scenario, the given data are as follows:

Present value (PV) = $1

Rate of interest (R) = 1.18% per month

Time period (for option a) (t1)= 12 months

Time period ( for option b) (t2)= 24 months

So, we can calculate the future value by using following formula:

FV = PV × ( 1 + R )^t

(a). By putting value in the formula:

FV = $1 ( 1 + 0.0118)^12

= $1 × 1.1511610877

= $1.15

FV = PV × ( 1 + R )^t

(b). By putting value in the formula:

FV = $1 ( 1 + 0.0118)^24

= $1 × 1.32517184983

= $1.33

6 0
3 years ago
Hometown Appliance has been having issues with salesmen who are giving customers incorrect pricing or information or creating ad
AVprozaik [17]

Answer:

start at the top of the command structure

Explanation:

Based on the scenario being described it can be said that the best solution to this would most likely be to start at the top of the command structure. This would allow you to go down the chain of command in order to find and stop the communication problem at the source. Which in doing so you will fix the problem completely, since the rest of the employees will begin to receive the correct information regarding the products.

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3 years ago
Crater HVAC Systems is preparing its statement of cash flows ​(indirect​ method) for the year ended March​ 31, 2018. To​ follow,
Ymorist [56]

Answer:

a. Increase in inventory - <u>an operating activity subtraction from net​ income</u>

This is an operating activity as it has to do with the day to day business of the company and its operations. It is a subtraction from Net income because an increase in inventory means that more cash was spent to buy the inventory.

b. Issuance of common stock - <u>a financing​ activity</u>

Financing activities are those that have to do with raising capital for the business so when stock is issued and Equity is raised, it is a financing activity.

c. Decrease in accrued liabilities - <u>an operating activity subtraction from net​ income</u>

Liabilities are also in relation to the firm's operations so they are operating activities. This will be a subtraction from Net income because cash was used to pay off liabilities which is what reduced them.

d. Net income - <u>operating activity addition to net​ income</u>

Net income is derived from the operations of the business so is an Operating activity. It will increase net income evidently.

e. Decrease in prepaid expense - <u>operating activity addition to net​ income</u>

Prepaid expense is in relation to expenses which is an operating activity. It will be an addition to net income because as an asset, it reducing means that cash was not paid to acquire it.

8 0
3 years ago
The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2015:
ivolga24 [154]

Answer:

1.

                     TNL System Journal entries

Date                 Description                                 DR                 CR

                                                                         $'million           $'million

a. Feb 5               Treasury Stock                           66

                             Cash                                                                   55

                   <em>Being the purchase of own shares</em>

b.   July 9             Cash                                             26

                              Treasurt Stock                                                  22

                              Paid -in- Capital -share repurchase                 4

                     <em> </em><em>Being the resale of treasury stock</em>

<em>c. </em> Nov 4             Cash                                                  16

                         Paid - in-capital- share repurchase    5

                         Retained earnings                                1                  

                          Treasury stock                                                       22

                  <em>Being the resale of treasury stock  below the cost</em>

2.                Balance Sheet as at December 31, 2018

                                                                                               $'million

                Equity

           Common stock, 230 ,illion shares at $1                             230

             Paid-in-excess capital of par                                           1,830

             Retained Earnings ( 1,400 - 1 -1,399)                             <u>        -</u>

                                                                                                        2,060

           Treasury Stock                                                                <u>         (22)</u>

             Total Equity                                                                     <u>     2,038</u>

Explanation:

3 0
3 years ago
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Andru [333]

Answer:

D

Explanation:

You always want to compensate someone based on their performance. This aligns the employees and company's goals together

8 0
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