C6-1_MHLWM - Chapter 6 The Role of Financial Information in...

Info icon This preview shows pages 1–4. Sign up to view the full content.

Chapter 6 Assigned problem or case: Problem or case title: Tab P6-9 Calculating value creation by two companies P6-9 P6-12 Calculating sustainable earnings P6-12 P6-13 Krispy Kreme Doughnuts: Valuing abnormal earnings P6-13 C6-1 Illinois Tool Works: Valuing abnormal earnings C6-1 The Role of Financial Information in Valuation, Cash Flow Analysis, and Credit Risk Assessment
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

P6-9 Calculating value creation by two companies This spreadsheet consists of: 1) Data table for company A (beginning row 8) 2) Data table for company B (beginning row 19) Company A 2010 2011 2012 2013 2014 NOPAT $ 66,920 $ 79,632 $ 83,314 $ 89,920 $ 92,690 $ 478,000 $ 504,000 $ 541,000 $ 562,000 $ 598,000 Cost of equity capital 0.152 0.167 0.159 0.172 0.166 Company B 2010 2011 2012 2013 2014 NOPAT $ 192,940 $ 176,341 $ 227,700 $ 198,900 $ 282,964 $ 877,000 $ 943,000 $ 989,999 $ 1,020,000 $ 1,199,000 Cost of equity capital 0.188 0.179 0.183 0.175 0.186 BV t-1 BV t-1
Image of page 2
P6-12 Calculating sustainable earnings Colonel Electric Company Comparative Income Statements For Year Ended December 31 ($ in millions) 2013 2012 2011 Revenues: Sales of goods $ 54,196 $ 53,177 $ 52,767 Sales of services 11,923 10,836 8,863 Royalties and fees 1,629 753 783 Total revenues 67,748 64,766 62,413 Costs and expenses: Cost of goods sold (24,594) (24,308) (22,775)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern