Exam 18: Financial Modeling and Pro Forma Analysis

With the proper changes it is believed that Ideko's credit policies will extend a 60 days credit period to accounts receivables. The forecasted accounts receivable for Ideko in 2013 is closest to ________.

Pledrea Inc. has EBITDA at the forecast horizon of $10,000. Its EBITDA multiple is 11. What is the terminal value of the firm at the forecast horizon?

Why is EBITDA multiple used for valuation rather than sales or earnings?

Given the following data for a given period, compute the free cash flow to the firm: Net Income = $10,000 After-tax Interest Expense = $1,000 Depreciation = $1,000 Increase in NWC = $1,000 Capital Expenditures = $2,000

LG Inc. has done a long-term forecast of its balance sheet. The projected total assets for the next year are $200 million. The current liabilities are projected to be $100 million and other long term liabilities are $70 million. How much net new financing is needed in the following year?

Use the information about Billy's Burgers to answer the following question(s): Billy's Burgers -Using the percent of sales method, and assuming 20% growth in sales, estimate Billy's Burgers' Accounts Payable for 2011.

LG Inc. has done a long-term forecast of its balance sheet. The projected total assets for the next year are $300 million. The current liabilities are projected to be $170 million and other long term liabilities are $70 million. How net new financing is needed in the following year?

The asset and liability side of a pro forma balance sheet projection will not balance, in general, unless we make assumptions about how ________ and ________ will grow with sales.

A firm has $80 million in equity and $40 million of debt, it pays dividends of 20% of net income, and has a net income of $10 million. What is the firm's sustainable growth rate?

While the assets and accounts payable of a firm may reasonably be expected to grow with sales, ________ will not naturally grow with sales.

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's Sales and Operating Cost Assumptions, what production capacity will Ideko require in 2009?

A firm has $40 million in equity and $20 million of debt, it pays dividends of 20% of net income, and has a net income of $10 million. What is the firm's internal growth rate?

Compute the after-tax interest expense for a firm with Interest on Excess Cash = $5,000, Interest on Debt = $8,000, and a tax rate of 30%.

For valuing a planned expansion, in addition to forecasting cash flows we need to estimate the firm's continuation value.

The maximum growth rate that a firm can achieve without issuing new equity or by increasing its debt to equity ratio is the firm's sustainable growth rate.

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2010-2015 Pro Forma Balance Sheet for Ideko, 2010-2015 -Assuming that Ideko has an EBITDA multiple of 9.4, then the continuation EV/Sales ratio of Ideko in 2015 is closest to ________.

Compute the after-tax interest expense for a firm with Interest on Excess Cash = $2,000, Interest on Debt = $7,000, and a tax rate of 30%.

A firm has $50 million in equity and $20 million of debt, it pays dividends of 30% of net income, and has a net income of $10 million. What is the firm's sustainable growth rate?

A firm expects growth next year to be 12%. Its sustainable growth rate is 10%. Which of the following is true?

Use the information about Billy's Burgers to answer the following question(s): Billy's Burgers -Using the percent of sales method, and assuming 20% growth in sales, estimate Billy's Burgers' Accounts Receivable for 2011.