1 Calculatethe normalized net income for a company using the givenfinancial statement information:
Net income: $74,000
Interest expense: $8,000
Marginal tax rate: 40%
Restructuring expense: $4,000
One-time expense: $2,000
A $71,200
B $76,000
C $76,800
D $77,600
E $80,000
2 Company E is a comparable company to the universeof competitors below. Company E is forecast to have Net Income of $500 in 2014.Using the universe of comparable companies given, calculate the number ofshares outstanding for Company E based upon 2014E P/E (rounded to the nearestinteger).
Use the following assumptions for Company E as of the end of 2014:Cash: $750
Debt: $600
Share Price: $45
Comparable | Summary | P/E | EV/EBITDA | |||
Analysis | Price | Shares | 2014E | 2015E | 2014E | 2015E |
Company A | $17.00 | 50.0 | 14.0x | 11.0x | 4.0x | 2.5x |
Company B | $5.50 | 1,800.0 | 16.0x | 14.0x | 3.5x | 2.0x |
Company C | $8.00 | 300.0 | 19.2x | 15.0x | 5.0x | 3.5x |
Company D | $11.00 | 400.0 | 10.8x | 8.0x | 5.0x | 3.5x |
Mean | 15.0x | 12.0x | 4.4x | 2.9x |
A 33
B 98
C 150
D 167
E Cannot be determined with the given information