Question

SK Enterprises has total assets of $421,800, outstanding debt of $129,000, cash of $18,700, sales of...

SK Enterprises has total assets of $421,800, outstanding debt of $129,000, cash of $18,700, sales of $387,400, costs of $241,900, and depreciation of $31,200. The firm has 11,300 shares of stock priced at $34.40 a share. What is the firm's EV to EBITDA ratio?
Selected Answer:
Answers: A.

4.27
B.

3.82
C.

4.08
D.

3.43
E.

3.67
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Homework Answers

Answer #1

Enterprises value (EV) = (Number of shares x Price per share) + Outstanding debt - Cash

= (11,330 x 34.40) + 129,000 - 18,700

= 388,720 + 129,000 - 18,700

= $499,020

EBITDA = Sales - costs

= 387,400 - 241,900

= $145,500

EV to EBITDA = Enterprises value (EV)/EBITDA

= 499,020/145,500

= 3.43

Firm's EV to EBITDA ratio = 3.43

Correct option is (D)

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