- Required Information The Following Information Applies To The Questions Displayed Below Davidson Yachts Is A Small Pr 1 (31.49 KiB) Viewed 11 times
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The company operates from a large building that has offices, storage, and sales space for some of the smaller sailboats. The larger sailboats are kept in a fenced area adjacent to the main building, and an ample parking area is nearby. This year, Davidson purchased a boat lift to haul boats. The lift has brought in revenues for boat repairs, hull painting, and related services, as well as the boat hauls. The balance sheet and income statement for Davidson Yachts for 2017 to 2022 follow. The increase in net fixed assets in the recent 2 years is due to improvements in the building, paving of the parking area, and the purchase of the lift. Cash Accounts receivable Allowance for bad debts Inventory Other current serate < Prev 5 of 5 DAVIDSON YACHTS COMPANY Comparative Balance Sheet December 31 2018 $ 22,266 103,164 (9,236) 57,114 12 224 2017 $ 23,560 99,765 (9,454) 35,309 17 104 www www www Next 2019 $ 19,035 113,263 (8,974) 62,152 a 204 2020 $ 28,726 126,053 (11,416) 68,274 11 266
Cash Accounts receivable Allowance for bad debts Inventory Other current assets Total current assets Property and equipment Accumulated depreciation Total assets Accounts payable Taxes payable Short-term loans Accrued payroll payable Total current liabilities: Long-term debt Equity ☐ < Prev 5 of 5 DAVIDSON YACHTS COMPANY Comparative Balance Sheet December 31 2018 $ 22,266 103, 164 2017 $ 23,560 99,765 (9,454) 35,309 12,194 (9,236) 57,114 13,224 $ 161,374 $ 186,532 262,495 (66,284) 282,308 (93,742) $ 375,098 $ 78,457 11,283 57,280 4,898 $ 357,585 $ 82,935 11,930 60,176 5,527 $ 160,568 158,473 38,544 car $ 151,918 172,688 50,492 Next 2019 $19,035 113,263 (8,974) 62,152 9,384 $ 194,860 299,680 (123,192) $ 371,348 $ 63,706 12,080 37,883 3,949 $ 117,618 179,790 73,940 2020 $ 28,726 126,053 (11,416) 68,274 11.396 $ 223,033 368,865 (158,399) $ 433,499 $ 56,646 14,383 41,393 4,524 $ 116,946: 215,297 101,256
ies DAVIDSON YACHTS COMPANY Comparative Balance Sheet December 31 2018 2017 $ 23,560 99,765 (9,454) $ 22,266 103, 164 (9,236) 35,309 57,1145 12,194 13,224 $161,374 $ 186,532 262,495 (66,284) $ 357,585 $ 82,935 11,930 60,176 5,527 $ 160,568 158,473 38,544 282,308 (93,742) $375,098 $ 78,457 11,283 57,280 4,898 $ 151,918 172,688 50,492 ATE ann 2019 $ 19,035 113,263 (8,974) 62,152 9,384 $ 194,860 299,680 (123,192) $371,348 $ 63,706 12,080 37,883 3,949 $ 117,618 179,790 73,940 SEA 2020 $ 28,726 126,053 (11,416) 68,274 11,396 $ 223,033 368,865 (158,399) $ 433,499 $ 56,646 14,383 41,393 4,524 $ 116,946 215,297 101,256 . 2021 $ 43,992 104,688 (7,432) 59,2941 19,223 $ 219,765 405,569 (187,527) $ 437,807 $ 40,489 4,038 49,894 5,074 $ 99,495 229,771 108,541 AN 2022 $31,564 144,309 (12,806) 97,104 23,233 $283,404 498,926 (227,607) $554,723 $50,874 16,432 77,262 5,579 $ 150,147 262,558 142,018 PAI 333
Equity Total liabilities and equity Sales Returns and allowances Cost of sales Gross margin Depreciation expense Interest expense Salaries and wages: Accounting and legal Administration expense Other expense Total expense Net income 38,544 $ 357,585 50,492 73,940 $375,098 $ 371,348 DAVIDSON YACHTS COMPANY Comparative Statement of Income and Operating Cash Flow For the Years Ended December 31 2017 2018 $ 769,080 $726,378 38,679 474,808 $ 255,593 $29,105 18,627 81,953 9,454 79,696. 12,660 $ 231,495 $ 24,098 35,945 442,198 $ 248, 235 $ 27,488 19,587 73,694 9,236 10: 101,256 $43 $ 433,499 75,264 18,957 $ 224,226 $ 24,009 2019 $778,980 40,634 458,915 $ 279,431 $ 29,480 21,028 77,876 9,353 80,723 15,793 $ 234,253 $ 45,178 2021 $ 930, 46, 546, $ 338, $ 35, 21, 95, 11, 96, 22, $ 283, $ 54,
aity 38,544 $ 357,585 50,492 73,940 $375,098 $ 371,348 101,256 108,541 $ 433,499 $ 437,807 DAVIDSON YACHTS COMPANY Comparative Statement of Income and Operating Cash Flow For the Years Ended December 31 2017 $ 769,080 38,679 474,808 $ 255,593 $ 29,105 18,627 81,953 9,454 79,696 12,660 $ 231,495 $ 24,098 2018 2019 $ 726,3785 $ 778,980 35,945 442,198 $ 248,235 $ 27,488 19,587 40,634 458,915 $ 279,431 $ 29,480 21,028 73,694 77,876 9,236 9,353 75,264 18,957 80,723 15,793 $ 224,226 $ 234,253 $ 24,009 $ 45,178 2020 $ 930,978 46,298 546,678 $ 338,002 $ 35,237 21,505 95,794 11,864 96,499 22,933 $ 283,832 $ 54,170 142,018 $ 554,7231 2021 $766,110 33,187 454,569 $ 278,354 $ 29,158 24,919 92,933 13,138 88,025 18,964 $ 267,137) $ 11,217 2022 $ 950,357 47,680 531,497 $ 371,180 $ 40,110 29,023 101,477 11,410 97,471 22,692 $ 302, 183 $ 68,997
wwwwwwww sopstve Other expense Total expense Net income Cash flow from operations (adjustments to net income) Depreciation Decrease (increase) in receivables Decrease (increase) in inventory Decrease (increase) in other current assets Increase (decrease) in current liabilities T7INFO 12,660 $ 231,495 $ 24,098 DAILLE 18,957 $ 224,226 $ 24,009 $ 27,488 (3,617) (21,805) (1,030) (8,650) $ 16,395 123 15,793 $ 234,253 $ 45,178 $ 29,4801 (10,361) (5,038) 3,840 (34,300) $ 28,799 The company obtains its debt financing from two sources: (1) a small savings and loan for its short-term funds and (2) a larger commercial bank, also for short-term loans, but principally for long-term financing. The terms of the loan agreement with the bank include a restriction that Davidson's current ratio must remain higher than 1.5. www. 22,9 $ 283,8 $ 54,1 $ 35,2 (10,34) (6,12) (2,01) (67 $ 70,2
adjustments to net. eceivables ventory ther current assets urrent liabilities 1100 12,660 $ 231,495 $ 24,098 18,957 $ 224,226 $ 24,009 $ 27,488 (3,617) (21,805) (1,030) (8,650) $ 16,395 717771 15,793 $ 234,253 $ 45,178 $ 29,480 (10,361) (5,038) 3,840 (34,300) $ 28,799 nancing from two sources: (1) a small savings and loan for ger commercial bank, also for short-term loans, but ng. The terms of the loan agreement with the bank on's current ratio must remain higher than 1.5. 201 22,933 $ 283,832 $ 54,170 $ 35,237 (10,348) (6,122) (2,012) (672) $ 70,253 www-x 18,964 $ 267,137 $ 11,217 $ 29,158 17,381 8,980 (7,827) (17,451) $ 41,458 COD 22,692 $ 302,183 $ 68,997 $ 40,110 (34,247) (37,810) (4,010) 50,652 $ 83,692
Required: 1. What is the valuation of Davidson Yachts Company using the book value of equity method? 2. What is the valuation of Davidson Yachts Company using the multiples-based method on earnings? Assume the industry average earnings multiple is 7. Use the median value of the most recent 3 years for earnings. 3. What is the valuation of Davidson Yachts Company using the multiples-based method on operating cash flow? Assume the industry average multiple on operating cash flow is 5. Use the median value of the most recent 3 years for cash flow. Valuation Method 1. Net book value of equity 2. Earnings multiple 3. Operating cash flow multiple Valuation