Given the information in the projected income statements and assuming the projected improvements in working capital (that is, Ideko's working capital requirements though 2010 will be as shown here), use EBITDA as a multiple to estimate the continuation value in 2010 (reproduce Table 19.15), assuming the EBITDA multiple for Ideko remains at 9.1 times. Infer the EV/sales and the unlevered and levered P/E ratios implied by the continuation value you calculated. Also assume that Ideko's production plant will require an expansion in 2010, and that the cost of this expansion, $15.4 million, will be added to Ideko's debt in 2010. Ideko's balance sheet for 2005 is shown here.
Table :
column 1- (Ratio) P/E: Oakley, Inc. - 24.6x, Luxottica Group - 28.1x, Nike, Inc - 18.2x, Sporting Good Industry - 20.5x
column 2 - (Ratio) EV/Sales: Oakley, Inc. - 2.2x, Luxottica Group - 2.6x, Nike, Inc. - 1.6x, Sporting Good Industry - 1.4x
column 3 - (Ratio) EV/EBITDA: Oakley, Inc. -11.5x, Luxottica Group - 14.3x, Nike, Inc. - 9.1x, Sporting Good Industry - 11.4x
column 4- (Ratio) EBITDA.Sales: Oakley, Inc, - 17.2%, Luxottica Group - 18.3%, Nike, Inc. - 15.8%, Sporting Good Industry - 12.2%
Continuation Value: Multiples Approach ( $000)
EBITDA in 2010 ___________
EBITDA Multiple ___________x
Continuation Enterprise Value ____________
Debt __________________
Continuation Equity Value _____________
The EV/Sales multiple is ________. (Round to one decimal place)
The unlevered P/E ration is __________. (Round to one decimal place)
The levered P/E ratio is _______. (Round to one decimal place)