Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75

This year Last year 1050 Assets Cash 1530 Marketable securities Accounts receivable Inventories Total current assets 1810 1220 2050 1770 2900 2790 8290 6830 Gross fixed assets 29480 28090 Less: Accumulated depreciation 14680 13140 Net fixed assets 14800 14950 Total assets Liabilities and Stockholders' Equity 23090 21780 Accounts payable Notes payable Accruals 1560 1540 2760 2160 190 350 Total current liabilities 4510 4050 Long-term debt Common stock Retained earnings Total stockholders' equity 5220 4970 9950 9950 3410 2810 13360 12760 Total liabilities and stockholders' equity 23090 21780

Selected ratios formulars Unilever 2021 BOPP 2021 ROCE PBIT / net assets * 100 (32,424/39,406 *100 = - 82% 102,154 / 192,758 *100 =53% Net Assets Turnover Revenue / Net Assets 526,912 / 39,406 = 13 times 214,174 / 192,758 = 1 time Gross Profit Margin Gross profit / revenue *100 97,046 / 526,912 *100 18.4% 115,462 / 214,174 * 100 54% Net Profit Before Tax PBT / revenue * 100 (35,005) / 526,912* 100 = -6.6% 104,778 / 214,174* 100 =48.9% Current Ratio Current assets / current liabilities 214,665/341,171 = 0.5 139,104 / 30,368 = 4.5 Quick Ratio Current assets – inventory / current liabilities 214,665-91,627 /341,171 = 0.4 139,104 -13,248/ 30,368 = 4.1 Inventory Days Inventory / cost of sales * 365 days  91,627/ 429,866 *365 = 77 days 13,248 / 101,397 *365 = 47 days Receivable Days Receivables / cost of sales * 365 days 24,515 / 429,866 *365 =20 days 92,860 / 101,397 *365 =334 days Payable Days…

Some selected financial statement items belonging to MNO Company are given in the table below. According to this information, which of the following is Return on Assets (ROA) in 2021? Inventory 12,500Total Assets in 2021 110,000Current Liabilities 40,000Total Assets in 2020 90,000Net Profit 12,000Shareholders' Equity 65,000 Select one:a. 0.12b. 0.10c. 0.18d. 0.13

1. Compute the total present value of residual income for the Year +1 to Year +5, using the residual income valuation model. 2. Compute the total present value of residual income on January 1, Year +1 3. Compute the present value of equity at on January 1, Year +1 before the midyear discounting adjustment using the residual income valuation model

Estimating Share Value Using the ROPI Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2018, for Humana. Terminal Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal place Reported Horizon period $ millions 2018 2019 2020 2021 2022 Period Sales $56,880 $57,734 $58,600 $59,480 $60,372 2,492 2,542 2,580 2.619 2,658 4,000 4,065 4,126 4,189 4,252 NOPAT NOA $60,976 2,684 4,295 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate Discount rate (WACC) 19 7.8% Common shares outstanding 135.6 million Net nonoperating obligations (NNO) S(6,161) million NNO is negative because Humana's nonoperating assets exceed its nonoperating liabilities. (a) Estimate the value of a share of common stock using the residual operating income (ROPI) model as of December 31,…

Ratio Analysis Consider the following information taken from the stockholders equity section: How do you interpret the companys payout and profitability performance? Required: 1. Calculate the following for 2020. (Note. Round answers to two decimal places.) 2. CONCEPTUAL CONNECTION Assume 2019 ratios were: and the current year industry averages are: How do you interpret the companys payout and profitability performance?

Albion Inc. provided the following information for its most recent year of operations. The tax rate is 40%. Required: 1. Compute the following: (a) return on sales, (b) return on assets, (c) return on stockholders equity, (d) earnings per share, (e) price-earnings ratio, (f) dividend yield, and (g) dividend payout ratio. 2. CONCEPTUAL CONNECTION If you were considering purchasing stock in Albion, which of the above ratios would be of most interest to you? Explain.

Estimating Share Value Using the ROPI Model Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2018, for Humana. Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. Reported Horizon period Terminal millions Sales NOPAT NOA 2018 2019 2020 2021 2022 $56,912 $57,766 $58,632 $59,512 $60,404 2,492 2,542 2,580 2,619 2,658 4,097 4,158 4,221 4,284 4,032 Answer the following requirements with the following assumptions: Assumptions Terminal period growth rate 1% Discount rate (WACC) 7.8% Common shares outstanding 135.6 million Net nonoperating obligations (NNO) $(6,129) million ($ millions) ROPI (NOPAT- [NOABeg x rw]) Present value of horizon ROPI Cum present value of horizon ROPI $ Present value of terminal ROPI NOA Total firm value Less NNO Firm equity value Shares outstanding (millions) Stock price per…

Calculate the following ratios based on the balance sheet, income statement and cash flow prepared in question ROE Return on Capital Employed (post-tax) Net Profit Margin EBITDA Margin Effective Tax Rate Operating Cost Ratio Gross Profit Margin Total Asset Turnover Ratio Fixed Asset Turnover Ratio Receivables Turnover Ratio Leverage Ratio [Avg. Total Assets / Avg. Total Equity] FCF / EBITDA Interest Coverage Ratio Debt Service Coverage Ratio Basic EPS (Assume Face Value of each share is INR 10) Debt : Equity Ratio Income Statement (INR Cr)   Units Mar/14 Saleable Units          4,570 Revenues       Gross Revenues   INR Cr      2,116 Less: Environment Cess   INR Cr            5 Net Revenues   INR Cr      2,121 Growth (%)     -1.9%         Expenses       O&M Expenses (% of Project Costs)   INR Cr         146 YoY Escalation     5.72%         EBITDA   INR Cr      1,974 Margin (%)     93.1% Book Depreciation   INR Cr         439 Interest Expenses   INR…