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goldenfox [79]
2 years ago
8

The market value of the equity of Hudgins, Inc., is $582,000. The balance sheet shows $21,000 in cash and $192,000 in debt, whil

e the income statement has EBIT of $93,000 and a total of $137,000 in depreciation and amortization. What is the enterprise value-EBITDA multiple for this company
Business
1 answer:
SpyIntel [72]2 years ago
8 0

Answer:

3.27

Explanation:

Calculation to determine the enterprise value-EBITDA multiple for this company

First step is to calculate the

Enterprise value

Using this formula

Enterprise value = Market Capitalization + Total Debt - Cash and equivalents

Let plug in the formula

Enterprise value=$582000 + $192000 - $21000

Enterprise value=$753000

Second step is calculate EBITDA using this formula

EBITDA = EBIT + Depreciation and Amortization

Let plug in the formula

EBITDA= $93000 + $137000

EBITDA=$230,000

Now let determine the EBITDA multiple using this formula

EBITDA multiple = Enterprise Value / EBITDA

Let plug in the formula

EBITDA multiple=$753000 / $230000

EBITDA multiple= 3.27

Therefore enterprise value-EBITDA multiple for this company is 3.27

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5 0
2 years ago
Read 2 more answers
Bradford Services Inc. (BSI) is considering a project that has a cost of $10 million and an expected life of 3 years. There is a
balandron [24]

Answer:

Expected Net Cash Flow = $3.8 million

Net Present Value (NPV) = $1.0492 million

Explanation:

Given Cash outflow = $10 million

Provided cash inflows as follows:

Particulars           Good condition         Moderate condition        Bad Condition

Probability                  30%                               40%                                  30%

Cash flow                $9 million                     $4 million                       $1 million

Average expected cash flow each year = ($9 million X 30 %) + ($4 million X 40%) + ($1 million X 30%) = $2.7 million + $1.6 million + $0.3 million = $4.6 million

Three year expected cash flow = ($4.6 million each year X 3) - $10 million = $13.8 million - $10 million = $3.8 million

While calculating NPV we will use Present Value Annuity Factor (PVAF) @12% for 3 years = \frac{1}{(1 + 0.12){^1}} + \frac{1}{(1 + 0.12){^2}} + \frac{1}{(1 + 0.12){^3}} = 2.402

NPV = PV of inflows - PV of Outflows = $4.6 million X 2.402 - $10 million = $11.0492 million - $10 million = $1.0492 million

Expected Net Cash Flow = $3.8 million

Net Present Value (NPV) = $1.0492 million

3 0
3 years ago
The accounting equation is assets = liabilities + owner’s equity.
Anon25 [30]

Answer:

A. Why must this equation always balance?

It must balance because all the assets that firm controls have been acquired either by external funding (liabilities), or by internal funding (owner's equity).

This also explains the relationship between economic resources and claims to economic resources. Economic resources (assets) are either the claim of an external agent that has to be paid in the future (liability), or the claim of one of the company's owners who could in theory dissolve the company and take possession of the company's assets (equity).

B. What transactions increase or decrease owner’s equity?

Profits increase owner's equity, as well as capita contributions, whether in the form of stocks, equipment, or other financial instruments.

Costs and expenses are substracted from revenues, and therefore they reduce profits, and owner's equity.

C. How does net income or loss affect owner’s equity?

A net income profit increases owner's equity, while a net income loss decreases owner's equity.

D. Please give an example of a transaction, applied to the accounting equation.

ABC corporation issues 1,000 common stocks with par value of $5, and a price per stock of $7. The journal entry is:

Account                                    Debit                Credit

Cash                                        $7,000

Common Stock                                                 $5,000

Additional Paid-In Capital                                $2,000

In this transaction, cash is an asset and common stock and additional paid-in capital are part of the stockholder's equity. The corporation does not have any liabilities yet.

ABC Corp accounting equation = Assets = Liabilities + Stockholder's equity

                                                     = $7,000 = 0 + $7,000

As can be seen, the accounting equation is true even in the earliest stages of the corporation.

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3 years ago
If you fire Julio from his job after making one mistake but did not fire John for making the same mistake several times, you hav
ahrayia [7]

In this scenario, we have committed an error related to Procedural justice

Procedural justice refers to way of ensuring fair justice by making decisions according to fair processes to ensure fair treatment.

According to this justice rule, the same rule must be applied to similar scenario and must be impartial as well in order to ensure fair justice.

In conclusion, we have committed an error relating to procedural justice because the rule that was <em>applied to Julio </em>was <em>not applied to John</em>, therefore, there was a bias in justice.

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Bingerton industries began the year with inventory of$85,000. Purchases of inventory on account during the year totaled $310,000
Charra [1.4K]

The first entry of the journal records the inventory of of $310,000 as debited and accounts payable as credited.

<h3>What is inventory management?</h3>

The process of counting and recording fluctuations in the prices of assets such as raw materials, work-in-progress, and finished goods refers as Inventory management.

Following are the Journal entries-

1. Inventory accounts  A/c  $310,000

          To Accounts Payable A/c$310,000

 (Being the inventory is purchased)

2. Accounts Receivable   A/c  $520,000

           To Sales Revenue  A/c $520,000

   ( Being inventory is sold)

3. Cost of Goods Sold  A/c  $335,000

            To Inventory  A/c  $335,000

 (Being inventory is sold )

Learn more about Inventory, here:

brainly.com/question/26533444

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8 0
2 years ago
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