Spyder Multiples

Spyder Multiples - Mean? A valuation measurement used to...

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Spyder Discussion Questions 1. Describe David Jacobs’ career path. How would you evaluate his skills as an entrepreneur and CEO? 2. Spyder’s revenues increased from $10 million to $61 million over the past seven years up to 2004. What were the primary factors driving this growth? 3. In what ways could you value the company? What valuation do you get using market multiples? What valuation do you get using discounted cash flow? What is an appropriate valuation? Why? 4. Compare the alternative transactions described on the last page of the case. Which would you choose if you were David Jacobs? Which would you choose if you were a general partner at CHB? Who else is affected by this decision and how? What Does Total Enterprise Value - TEV
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Unformatted text preview: Mean? A valuation measurement used to compare companies with varying levels of debt. This is calculated as: TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock- Excess Cash. TEV= (11,750,000)(sold first stake CHB) + (846,000) + (4,731,000) (7,975,000) Based on Graphs ( Spyder has Sales Multiple of 1.7 and EBITDA Multiple of 9.8) Very Similar to Converse in Multiples Take 2004 sales which is 8,000,000 and multiple by sales multiple 1.7= $13,600,000 would be an appropriate measure. No common stock, all preferred. Find Price per Share for 2004= Find Earnings Per Share for 2004= 5,069,000(Net Income) Dividends Paidout (0)/Average Shares Outstanding (4,731,000)= 5,069,000/4,731,000= 1.071...
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