Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 46

Business Valuation Refer to the information in problem 20-44 for the Blue Water Yachts Company.

Required Develop a business valuation for Blue Water Yachts Company for 2010 using the book value of equity method and the multiples-based method. Assume that the industry average earnings multiple is 8 and the industry average multiple on operating cash flow is 12. Which of the methods would you use and why?

Step 1 of 2

Business Analysis:

Business analysis means analysing the financial and non-financial information of an entity. Focus is placed on analysis of financial information through analysis of balance sheet, income statement, cash flow statement and analysis of financial ratios of the company. These ratios are analysed by comparing the result of these ratios with the industry standards..