In this study, you are going to analyze and value a company using ratios across time, comparing them to industry averages, calculate a growth rate, determine the cost of capital, and use a constant growth model to value Ronen’s stock as of Dec. 2000. Because of the expertise you will gain from this exercise, Ronen will hire you to head up their financial division where you will make decisions that hopefully will lead to an even higher stock price. After you have completed your valuation, click on the link at the bottom of this exercise to begin your new career.
Below are Ronen’s Income statements, Balance Sheets, and Statement of Cash Flows for 1996 -2000. Industry averages for key ratios are also given.
|
Ronen |
ANNUAL
INCOME STATEMENT |
|
|
||
|
($ MILLIONS, EXCEPT PER SHARE) |
|
|
|
|
|
|
|
Dec-00 |
Dec-99 |
Dec-98 |
Dec-97 |
Dec-96 |
|
Sales |
100,789.00 |
40,112.00 |
31,260.00 |
20,273.00 |
13,289.00 |
|
Cost of Goods Sold |
97,981.00 |
37,999.00 |
28,994.00 |
18,883.00 |
12,125.00 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Gross
Profit |
2,808.00 |
2,113.00 |
2,266.00 |
1,390.00 |
1,164.00 |
|
Selling, General, & |
|
|
|
|
|
|
Administrative Expense |
|
|
|
|
|
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Operating
Income Before Deprec. |
2,808.00 |
2,113.00 |
2,266.00 |
1,390.00 |
1,164.00 |
|
Depreciation, Depletion, & |
|
|
|
|
|
|
Amortization |
855 |
870 |
827 |
600 |
474 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Operating
Profit |
1,953.00 |
1,243.00 |
1,439.00 |
790 |
690 |
|
Interest Expense |
876 |
710 |
616 |
419 |
286 |
|
Non-Operating Income/Expense |
446 |
793 |
248 |
507 |
382 |
|
Special Items |
121 |
13 |
-39 |
-714 |
178 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Pretax Income |
1,644.00 |
1,339.00 |
1,032.00 |
164 |
964 |
|
Total Income Taxes |
434 |
104 |
175 |
-90 |
271 |
|
Minority Interest |
231 |
211 |
154 |
149 |
109 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Income
Before Extraordinary |
|
|
|
|
|
|
Items & Discontinued Operations |
979 |
1,024.00 |
703 |
105 |
584 |
|
Preferred
Dividends |
83 |
66 |
17 |
17 |
16 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Available
for Common |
896 |
958 |
686 |
88 |
568 |
|
Savings Due to Common |
|
|
|
|
|
|
Stock Equivalents |
0 |
0 |
0 |
0 |
0 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Adjusted
Available for Common |
896 |
958 |
686 |
88 |
568 |
|
Extraordinary Items |
0 |
-131 |
0 |
0 |
0 |
|
Discontinued Operations |
0 |
0 |
0 |
0 |
0 |
|
|
------------------- |
------------------ |
------------------ |
------------------ |
------------------ |
|
Adjusted
Net Income |
896 |
827 |
686 |
88 |
568 |
|
Earnings
Per Share Basic - |
|
|
|
|
|
|
Excluding Extra Items & Disc Op |
1.22 |
1.36 |
1.07 |
0.16 |
1.15 |
|
Earnings Per
Share Basic - |
|
|
|
|
|
|
Including Extra Items & Disc Op |
1.22 |
1.17 |
1.07 |
0.16 |
1.15 |
|
Earnings
Per Share Diluted- |
|
|
|
|
|
|
Excluding Extra Items & Disc Op |
1.12 |
1.27 |
1.01 |
0.16 |
1.08 |
|
Earnings
Per Share Diluted - |
|
|
|
|
|
|
Including Extra Items & Disc Op |
1.12 |
1.1 |
1.01 |
0.16 |
1.08 |
|
EPS Basic
from Operations |
1.16 |
1.26 |
1.06 |
0.96 |
0.92 |
|
EPS
Diluted from Operations |
1.07 |
1.18 |
1 |
@NA |
@NA |
|
Dividends
Per Share |
0.5 |
0.5 |
0.48 |
0.46 |
0.43 |
|
Com
Shares for Basic EPS |
736 |
705 |
642 |
544 |
492 |
|
Com
Shares for Diluted EPS |
814 |
769 |
696 |
554 |
542 |
|
Ronen |
Balance
Sheet |
|
|
|
|
|
|
Dec-00 |
Dec-99 |
Dec-98 |
Dec-97 |
Dec-96 |
|
ASSETS |
|
|
|
|
|
|
Cash & Equivalents |
1,374.00 |
288 |
111 |
170 |
256 |
|
Net Receivables |
12,270.00 |
3,548.00 |
2,893.00 |
2,151.00 |
2,255.00 |
|
Inventories |
953 |
598 |
514 |
0 |
164 |
|
Prepaid Expenses |
0 |
0 |
0 |
0 |
0 |
|
Other Current Assets |
15,784.00 |
2,821.00 |
2,415.00 |
2,348.00 |
1,304.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
Total Current Assets |
30,381.00 |
7,255.00 |
5,933.00 |
4,669.00 |
3,979.00 |
|
Gross Plant, Property & Equipment |
15,459.00 |
13,912.00 |
15,792.00 |
13,742.00 |
11,348.00 |
|
Accumulated Depreciation |
3,716.00 |
3,231.00 |
5,135.00 |
4,572.00 |
4,236.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
Net Plant, Property & Equipment |
11,743.00 |
10,681.00 |
10,657.00 |
9,170.00 |
7,112.00 |
|
Investments at Equity |
5,294.00 |
5,036.00 |
4,433.00 |
2,656.00 |
1,701.00 |
|
Other Investments |
0 |
0 |
0 |
0 |
0 |
|
Intangibles |
3,638.00 |
2,799.00 |
1,949.00 |
1,910.00 |
0 |
|
Deferred Charges |
0 |
0 |
0 |
0 |
0 |
|
Other Assets |
14,447.00 |
7,610.00 |
6,378.00 |
5,017.00 |
3,345.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
TOTAL
ASSETS |
65,503.00 |
33,381.00 |
29,350.00 |
23,422.00 |
16,137.00 |
|
LIABILITIES |
|
|
|
|
|
|
Long Term Debt Due In One Year |
0 |
0 |
0 |
0 |
0 |
|
Notes Payable |
1,679.00 |
1,001.00 |
0 |
0 |
0 |
|
Accounts Payable |
9,777.00 |
2,154.00 |
2,380.00 |
2,119.00 |
2,035.00 |
|
Taxes Payable |
0 |
0 |
0 |
0 |
70 |
|
Accrued Expenses |
0 |
0 |
0 |
0 |
56 |
|
Other Current Liabilities |
16,950.00 |
3,604.00 |
3,727.00 |
2,293.00 |
1,547.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
Total Current Liabilities |
28,406.00 |
6,759.00 |
6,107.00 |
4,412.00 |
3,708.00 |
|
Long Term Debt |
8,550.00 |
7,151.00 |
7,357.00 |
6,254.00 |
3,349.00 |
|
Deferred Taxes |
1,644.00 |
1,894.00 |
2,357.00 |
2,039.00 |
2,290.00 |
|
Investment Tax Credit |
0 |
0 |
0 |
0 |
0 |
|
Minority Interest |
3,318.00 |
3,430.00 |
3,144.00 |
2,140.00 |
1,347.00 |
|
Other Liabilities |
12,115.00 |
4,577.00 |
3,337.00 |
2,959.00 |
1,720.00 |
|
EQUITY |
|
|
|
|
|
|
Preferred Stock - Redeemable |
0 |
0 |
0 |
0 |
0 |
|
Preferred Stock - Nonredeemable |
1,124.00 |
1,130.00 |
132 |
134 |
137 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
Total Preferred Stock |
1,124.00 |
1,130.00 |
132 |
134 |
137 |
|
Common Stock |
8,348.00 |
6,637.00 |
5,117.00 |
4,224.00 |
26 |
|
Capital Surplus |
0 |
0 |
0 |
0 |
1,710.00 |
|
Retained Earnings |
2,030.00 |
1,852.00 |
1,994.00 |
1,529.00 |
1,880.00 |
|
Less: Treasury Stock |
32 |
49 |
195 |
269 |
30 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
Common Equity |
10,346.00 |
8,440.00 |
6,916.00 |
5,484.00 |
3,586.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
TOTAL
EQUITY |
11,470.00 |
9,570.00 |
7,048.00 |
5,618.00 |
3,723.00 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
TOTAL
LIABILITIES & EQUITY |
65,503.00 |
33,381.00 |
29,350.00 |
23,422.00 |
16,137.00 |
|
COMMON SHARES
OUTSTANDING |
751.628 |
714.527 |
661.762 |
622.492 |
510.248 |
|
Ronen |
ANNUAL
STATEMENT OF CASH FLOWS |
|
|||
|
($
MILLIONS) |
|
|
|
|
|
|
|
Dec-00 |
Dec-99 |
Dec-98 |
Dec-97 |
Dec-96 |
|
INDIRECT
OPERATING ACTIVITIES |
|
|
|
|
|
|
Income
Before Extraordinary Items |
979 |
1,024.00 |
703 |
105 |
584 |
|
Depreciation
and Amortization |
855 |
870 |
827 |
600 |
474 |
|
Extraordinary
Items and Disc. Operations |
0 |
0 |
0 |
0 |
0 |
|
Deferred Taxes |
207 |
21 |
87 |
-174 |
207 |
|
Equity in
Net Loss (Earnings) |
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
-146 |
-541 |
-710 |
-195 |
-274 |
|
Funds
from Operations - Other |
676 |
854 |
966 |
230 |
-108 |
|
Receivables
- Decrease (Increase) |
-8,203.00 |
-662 |
-1,055.00 |
26 |
-678 |
|
Inventory
- Decrease (Increase) |
1,336.00 |
-133 |
-372 |
0 |
-53 |
|
Accounts
Payable and Accrued Liabs - Inc (Dec) |
7,167.00 |
-246 |
433 |
-41 |
874 |
|
Income
Taxes - Accrued - Increase (Decrease) |
0 |
0 |
0 |
0 |
-51 |
|
Other
Assets and Liabilities - Net Change |
1,908.00 |
41 |
761 |
-50 |
65 |
|
Operating
Activities - Net Cash Flow |
4,779.00 |
1,228.00 |
1,640.00 |
501 |
1,040.00 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
Investments
- Increase |
933 |
722 |
1,839.00 |
944 |
761 |
|
|
|
|
|
|
|
|
Short-Term
Investments - Change |
0 |
0 |
0 |
0 |
0 |
|
Capital
Expenditures |
2,381.00 |
2,363.00 |
1,905.00 |
1,413.00 |
855 |
|
|
|
|
|
|
|
|
Acquisitions |
777 |
311 |
104 |
82 |
0 |
|
Investing
Activities - Other |
-173 |
-111 |
-117 |
3 |
386 |
|
Investing
Activities - Net Cash Flow |
-4,264.00 |
-3,507.00 |
-3,965.00 |
-2,436.00 |
-1,230.00 |
|
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
634 |
991 |
880 |
@CF |
107 |
|
Purchase
of Common and Preferred Stock |
|
|
|
|
|
|
Cash
Dividends |
523 |
467 |
414 |
354 |
281 |
|
Long-Term
Debt - Issuance |
3,994.00 |
1,776.00 |
1,903.00 |
1,817.00 |
359 |
|
Long-Term
Debt - Reduction |
2,433.00 |
1,837.00 |
870 |
607 |
294 |
|
Current
Debt - Changes |
-1,595.00 |
1,565.00 |
-158 |
464 |
217 |
|
Financing
Activities - Other |
494 |
428 |
925 |
951 |
223 |
|
Financing
Activities - Net Cash Flow |
571 |
2,456.00 |
2,266.00 |
1,849.00 |
331 |
|
Exchange
Rate Effect |
0 |
0 |
0 |
0 |
0 |
|
Cash and
Equivalents - Change |
1,086.00 |
177 |
-59 |
-86 |
141 |
|
DIRECT
OPERATING ACTIVITIES |
|
|
|
|
|
|
Interest
Paid - Net |
834 |
678 |
585 |
420 |
290 |
|
Income
Taxes Paid |
62 |
51 |
73 |
68 |
89 |
|
Ronen |
ANNUAL
RATIO REPORT |
|
|
|
||
|
(RATIO,
EXCEPT AS NOTED) |
|
|
|
|
|
|
|
LIQUIDITY |
Dec-00 |
Dec-99 |
Dec-98 |
Dec-97 |
Dec-96 |
Dec-95 |
|
Current
Ratio |
1.07 |
1.07 |
0.97 |
1.06 |
1.07 |
1.12 |
|
Quick
Ratio |
0.48 |
0.57 |
0.49 |
0.53 |
0.68 |
0.7 |
|
Working
Capital Per Share |
2.63 |
0.69 |
-0.26 |
0.41 |
0.53 |
0.59 |
|
Cash Flow
Per Share |
2.44 |
2.65 |
2.31 |
1.13 |
2.07 |
1.89 |
|
ACTIVITY |
|
|
|
|
|
|
|
Inventory
Turnover |
126.35 |
68.34 |
112.82 |
230.28 |
88.03 |
65.15 |
|
Receivables
Turnover |
12.74 |
12.46 |
12.39 |
9.2 |
6.94 |
7.31 |
|
Total
Asset Turnover |
2.04 |
1.28 |
1.18 |
1.02 |
0.9 |
0.73 |
|
Average
Collection Period (Days) |
28 |
29 |
29 |
39 |
52 |
49 |
|
Days to
Sell Inventory |
3 |
5 |
3 |
2 |
4 |
6 |
|
Operating
Cycle (Days) |
31 |
34 |
32 |
41 |
56 |
55 |
|
PERFORMANCE |
|
|
|
|
|
|
|
Sales/Net
Property, Plant & Equip |
8.58 |
3.76 |
2.93 |
2.21 |
1.87 |
1.34 |
|
Sales/Stockholder
Equity |
8.79 |
4.19 |
4.44 |
3.61 |
3.57 |
2.9 |
|
PROFITABILITY |
|
|
|
|
|
|
|
Operating
Margin Before Depr (%) |
2.79 |
5.27 |
7.25 |
6.86 |
8.76 |
11.42 |
|
Operating
Margin After Depr (%) |
1.94 |
3.1 |
4.6 |
3.9 |
5.19 |
6.73 |
|
Pretax
Profit Margin (%) |
1.63 |
3.34 |
3.3 |
0.81 |
7.25 |
9.59 |
|
Net
Profit Margin (%) |
0.97 |
2.55 |
2.25 |
0.52 |
4.39 |
5.66 |
|
Return on
Assets (%) |
1.37 |
2.87 |
2.34 |
0.38 |
3.52 |
3.81 |
|
Return on
Equity (%) |
8.66 |
11.35 |
9.92 |
1.6 |
15.84 |
16.66 |
|
Return on
Investment (%) |
3.84 |
4.75 |
3.91 |
0.63 |
6.75 |
7.05 |
|
Return on
Average Assets (%) |
1.81 |
3.05 |
2.6 |
0.44 |
3.87 |
4 |
|
Return on
Average Equity (%) |
9.54 |
12.48 |
11.06 |
1.94 |
17.18 |
17.49 |
|
Return on
Average Investment (%) |
4.12 |
5.08 |
4.35 |
0.78 |
7.29 |
7.47 |
|
LEVERAGE |
|
|
|
|
|
|
|
Interest
Coverage Before Tax |
2.88 |
2.89 |
2.68 |
1.39 |
4.37 |
3.92 |
|
Interest
Coverage After Tax |
2.12 |
2.44 |
2.14 |
1.25 |
3.04 |
2.72 |
|
Long-Term
Debt/Common Equity (%) |
82.64 |
84.73 |
106.38 |
114.04 |
93.39 |
101.23 |
|
Long-Term
Debt/Shrhldr Equity(%) |
74.54 |
74.72 |
104.38 |
111.32 |
89.95 |
96.83 |
|
Total
Debt/Invested Capital (%) |
43.83 |
40.45 |
41.92 |
44.63 |
39.78 |
42.83 |
|
Total
Debt/Total Assets (%) |
15.62 |
24.42 |
25.07 |
26.7 |
20.75 |
23.15 |
|
Total
Assets/Common Equity |
6.33 |
3.96 |
4.24 |
4.27 |
4.5 |
4.37 |
|
DIVIDENDS |
|
|
|
|
|
|
|
Dividend
Payout (%) |
41.07 |
37.06 |
45.48 |
276.14 |
37.32 |
40.58 |
|
Dividend
Yield (%) |
0.6 |
1.13 |
1.69 |
2.2 |
2 |
2.13 |
1. Examine the Liquidity, Activity, Performance, Profitability, and Leverage Ratios for Ronen. For each category, discuss overall whether the ratios are improving or getting worse over time. Use at least one concrete example to back up your conclusion within each category. For example, you may say the liquidity of Ronen is basically unchanged based on the current ratio of 1.07 which has been its approximate average over the last 5 years. (Note this is an example, do not use for your answer!)
2. The following gives a summary of key ratios compared to Ronen’s Industry.
|
Ratio
Analysis |
2000 |
2000 |
1999 |
1999 |
1998 |
1998 |
1997 |
1997 |
|
Ronen |
Ronen |
Industry |
Ronen |
Industry |
Ronen |
Industry |
Ronen |
Industry |
|
Leverage |
|
|
|
|
|
|
|
|
|
Debt to
Total Equity |
0.89 |
2.55 |
0.85 |
1.88 |
1.04 |
1.99 |
1.11 |
1.83 |
|
Times
Interest Earned |
2.1 |
0.1 |
2.4 |
1.9 |
2.1 |
2 |
1.3 |
1.6 |
|
Liquidity |
|
|
|
|
|
|
|
|
|
Current
Ratio |
1.07 |
0.99 |
1.07 |
0.94 |
0.97 |
0.96 |
1.06 |
0.91 |
|
Cash Flow
Per Share ($) |
2.44 |
-0.24 |
2.65 |
3.36 |
2.31 |
3.37 |
1.13 |
2.41 |
|
Activity |
|
|
|
|
|
|
|
|
|
Fixed
Asset Turnover |
9 |
0.5 |
3.8 |
2.1 |
3.2 |
1.8 |
2.5 |
1.2 |
|
Profitability |
|
|
|
|
|
|
|
|
|
Return on
Avg Total Assets (%) |
1.81 |
-3.01 |
3.05 |
2.34 |
2.6 |
2.89 |
0.44 |
1.95 |
|
Return on
Avg Total Equity (%) |
9.31 |
-15.4 |
12.32 |
12.01 |
11.1 |
14.58 |
2.25 |
7.74 |
|
Profit
Margin (%) |
0.97 |
-10.49 |
2.55 |
2.35 |
2.25 |
3.29 |
0.52 |
2.73 |
|
|
|
|
|
|
|
|
|
|
|
Ronen |
2000 |
2000 |
1999 |
1999 |
1998 |
1998 |
1997 |
1997 |
|
Market
Information |
Ronen |
Industry |
Ronen |
Industry |
Ronen |
Industry |
Ronen |
Industry |
|
Price
Close * |
83.13 |
18.59 |
44.38 |
31.02 |
28.53 |
45.49 |
20.78 |
27.91 |
|
Dividends
Per Share (Exdate) * |
0.5 |
0.89 |
0.5 |
0.74 |
0.48 |
0.57 |
0.46 |
0.65 |
|
Earnings
Per Share * |
1.22 |
0.32 |
1.36 |
1.64 |
1.07 |
1.84 |
0.16 |
0.68 |
|
EPS from
Basic Operations * |
1.16 |
1.32 |
1.26 |
2.4 |
1.06 |
1.78 |
0.96 |
0.91 |
|
Price-Earnings
Ratio * |
68.14 |
57.45 |
32.63 |
18.96 |
26.66 |
24.77 |
129.88 |
41.27 |
|
Price/EPS
from Basic Operations * |
71.66 |
14.13 |
35.22 |
12.91 |
26.92 |
25.53 |
21.53 |
30.71 |
|
Price to
Book Value * |
5.94 |
1.01 |
3.76 |
2 |
2.75 |
3.63 |
2.36 |
2.93 |
|
* Industry figure represents weighted
average industry item |
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** Industry figure represents percentage of total
industry known as: |
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A. Evaluate Ronen as a company relative to the industry. Does it appear Ronen is an attractive company at this time. Explain. Back up your argument with at least three specific examples using the leverage, liquidity, activity and profitability ratios only.
B. Evaluate Ronen’s stock relative to the industry. Does it appear that Ronen is an attractive stock at this time? Explain. Back up your argument with at least 3 specific examples using the market information in the above table.
3. In 2000, Ronen’s Beta was .6. If the risk-free rate was 5% and the expected return on the Market is 11.5%, what is the required return on Ronen’s stock. Use the CAPM to start. Recall the CAPM is Ri = rf + Beta(Rm – rf). Note that if you don’t think this required return is appropriate, change it!
4. Calculate the growth rate for Ronen by using ROE * (1 – payout ratio) where the payout ratio is calculated by dividing dividends by earnings or net income. Also calculate the growth of sales, dividends, or earnings using the geometric growth rate over some time period. Average your two numbers to attain an estimate of growth.
5. Calculate an input for the growth model. Dividends per share would be one but likely not very accurate. I would recommend FCFE per share as well. Recall the formula is Net Income + depreciation – Cap. Expend. – change in working capital – principal debt repayments + new debt issues. Then divide this number by shares outstanding. You may want to use average values for some of your inputs. Remember you are trying to come up with what will be available for the next ten years or so.
|
|
Average |
Dec-00 |
Dec-99 |
Dec-98 |
Dec-97 |
Dec-96 |
|
Adjusted
Net Income |
$613 |
$896 |
$827 |
$686 |
$88 |
$568 |
|
Depreciation |
$725 |
$855 |
$870 |
$827 |
$600 |
$474 |
|
Capital
Expenditures |
$1,783 |
$2,381 |
$2,363 |
$1,905 |
$1,413 |
$855 |
|
Change in
WC |
$189 |
$295 |
$1,530 |
-$1,367 |
$298 |
|
|
Long-Term
Debt - Issuance |
$1,970 |
$3,994 |
$1,776 |
$1,903 |
$1,817 |
$359 |
|
Long-Term
Debt - Reduction |
$1,208 |
$2,433 |
$1,837 |
$870 |
$607 |
$294 |
|
FCFE |
$127 |
$636 |
-$2,257 |
$2,008 |
$187 |
$252 |
|
No. of shares |
751.628 |
751.628 |
714.527 |
661.762 |
622.492 |
510.248 |
|
FCFE Per
share |
$0.17 |
$0.85 |
-$3.16 |
$3.03 |
$0.30 |
|
|
Dividends
Per Share |
|
0.5 |
0.5 |
0.48 |
0.46 |
0.43 |
6. Using the three
stage growth model, calculate the intrinsic value of Ronen’s
stock assuming current growth continues for 10 more years, at which time it
will slow to 5% over the next 10 years.
Its value in Jan. 2000 was $80 per share. Is Ronen
undervalued or overvalued based on the three-stage growth model?
Click here to use this model. http://faculty.etsu.edu/trainor/FNCE 3300/fcfe3st.xls
7. Now, using all of the information you have looked at in questions 1-6, make a recommendation on whether to buy, sell, or hold this stock.
8. Now click on the link below for an interactive flash exercise in which you will be heading up Ronen's financial division. The company recently split its stock 10 for 1 so you will be starting with a stock price of $7.