Determine the average annual rate of growth in sales

Assignment Help Accounting Basics

Reference no: EM132467977

An Analysis of a High-Flying Stock

Questions

Question a. Determine the average annual rate of growth in sales over the past five years. (Assume sales in 2011 amounted to $7.5 million.)

Problem 1. Use this average growth rate to forecast revenues for next year (2017) and the year after that (2018).

Problem 2. Now determine the company's net earnings and EPS for each of the next two years (2017 and 2018).

Problem 3. Finally, determine the expected future price of the stock at the end of this two-year period.

Question b. Because of several intrinsic and market factors, Marc feels that 25% is a viable figure to use for a desired rate of return.

Problem 1. Using the 25% rate of return and the forecasted figures you came up with in question a, compute the stock's justified price.

Problem 2. If C&I is currently trading at $32.50 per share, should Marc consider the stock a worthwhile investment candidate? Explain.

Reference no: EM132467977

Questions Cloud

What is meant by the power of conversation : Discuss some concepts pertaining to the language of change and explain with an example. What is meant by the power of conversation?

How to choose the best counselling and nursing approach : To explain how to choose the best counselling and nursing approach for a psychotherapy session. To understand psychotherapy and how they provide a framework.

Is depreciation a source of cash flow and why : Summarize the three types of cash flow activities, and describe at least 2 types of cash flows in EACH type of activity.Is depreciation a source of cash flow

Briefly describe the global health issue and its impact : Select a global health issue affecting the international health community. Briefly describe the global health issue and its impact on the larger.

Determine the average annual rate of growth in sales : Determine the average annual rate of growth in sales over the past five years. (Assume sales in 2011 amounted to $7.5 million.)

Establish trusting relationships to gain commitment : What is the importance of collaborating with other healthcare professionals in order to establish trusting relationships to gain commitment for mobilizing.

Determine what is the npv of the project : Net working capital of $125,000 will be required immediately. PUTZ has a 38 percent tax rate, and the required return on the project is 13 percent.

What are the health disparities that exist for given group : What are the health disparities that exist for this group? What are the nutritional challenges for this group? What health promotion activities are often.

Discuss about cash flow statement : Discuss about Cash flow statement. Discuss what you learned about this statement and how it is related to the other financial statements.

User Account

All Pages