PE Technical Question
You are looking at a business with the following financials:
Revenues of $150
Enterprise value of $300
Shares outstanding of 25
SG&A of 10% of Sales
Depreciation expense of $15
Tax rate of 33%
$100 of debt
Gross margin of 20%
$50 of cash
Calculate the share price.
Calculate the EV/EBITDA ratio.
Calculate the P/E ratio.
Relatively forward:
1) For share price, EV-> Market cap. 300-100+50 = 250, divided by 25# = share price of $10.
2) For EBITDA / NI. Start with revenues down to EBITDA which gives ~$15m, subtract the D&A (are you sure about D&A amount?), EBIT is 0. No interest, assuming no tax credit, NI = 0?
3) EV/EBITDA = 300/15. For P/E -> well NI is 0 which seems odd in this example.
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