Q1.
Use the following information for the next problem sets
Consider the following information that you propose to use to obtain an
estimate of year 2004 EPS for the MacLog Company.
In addition a regression analysis indicates the following relationship between
growth in sales per share for MacLog and GDP growth is %D Sales per
share=0.015+0.75(%D GDP)
Answers:
1. Calculate GDP for the year 2004.
11,000*(1+3.5%)=11,385 Billion
2. Estimate the firm s’ growth rate in sales per share.
0.015+0.75*3,5%=4.125%
3. Estimate the firm’s sales per share for the year 2004.
800*(1+4.125%)=833
4. Calculate the firm’s year 2004 EBITDA per share.
833*12%=99.96
5. Obtain an estimate of the per share depreciation charge for the year
2004.
Fixed asset turnover =Sales/Fixed assets => 2=833/Fixed assets
=>Fixed assets=833/2=416.5
Depreciation charge=416.5*14%=58.31
6. Calculate the per share EBIT for the year 2004.
99.96-58.31=41.65
7. Calculate the firm’s level of Total Assets per share for the year 2004.
Total assets turnover=Sales/Total assets
0.7=833/Total assets => Total assets=1190
8. Calculate the firm’s level of debt for the year 2004.
Debt/Total assets=45% => Debt=1190*45%=535.5
9. Calculate the per share interest rate charge for the year 2004.
535.5*3.5%=18.7425
10. Calculate the firm’s EBT per share for the year 2004.
41.65-18.7425=22.9075
11. Calculate the firm’s EPS for the year 2004.
22.9075*(1-36%)=14.6608
Q2.
Use the following information for the next problem(s)
