Spreadsheet Problem 471
Spreadsheet Problem
Start with the partial model in the file Ch 12 P11 Build a Model.xlsfrom the textbook’s web
site. The Henley Corporation is a privately held company specializing in lawn care products
and services. The most recent financial statements are shown below.
12–11
BUILD A MODEL:
CORPORATE VALUATION
Actual Projected
2002 2003
Liabilities and Equity
Accounts payable $ 9.6 $ 11.2
Notes payable 69.9 74.1
Accruals 27.5 28.1
Total current liabilities $107.0 $113.4
Long-term bonds 140.8 148.2
Preferred stock $ 35.0 $ 37.1
Common stock (par plus PIC) $160.0 $160.0
Retained earnings 146.4 164.9
Common equity $306.4 $324.9
Total liabilities and equity $589.2 $623.6
Income Statement for the Year Ending December 31 (Millions of Dollars Except for Per
Share Data)
2002
Net sales $800.0
Costs (except depreciation) 576.0
Depreciation 60.0
Total operating costs 636.0
Earnings before interest and taxes 164.0
Less interest 32.0
Earnings before taxes 132.0
Taxes (40%) 52.8
Net income before preferred dividends 79.2
Preferred dividends 1.4
Net income avail. for common dividends $ 77.9
Common dividends $ 31.1
Addition to retained earnings $ 46.7
Number of shares (in millions) 10
Dividends per share $ 3.11
468 Corporate Valuation, Value-Based Management, and Corporate Governance
