Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 3

Business Valuation Refer to the information in Exercise 20-32.
Required Develop a business valuation for Williams Company for 2013 using the following methods: (1) book value of equity, (2) market value of equity, (3) discounted cash flow (DCF), (4) enterprise value, and (5) all the multiples-based valuations for which there is an industry average multiplier. For the calculation of the DCF valuation, you may use the simplifying assumption that free cash flows will continue indefinitely at the amount in 2013.
Reference:
Business Analysis Williams Company is a manufacturer of auto parts having the following financial statements for 2012-2013.

Required Calculate and interpret the financial ratios (per Exhibit 20.9 ) for Williams for 2012 and 2013. Since the calculation of many ratios requires the average balance in an account (e.g., average receivables is required in calculating receivables turnover), you may assume that the balances in these accounts in 2012 are the same as those in 2011.