Question

You are interested in valuing your favorite ice cream shop, Salt & Straw. S&S currently has an EBIT of $4.79 million, Sales of $8.615 million, NI of $2.4 million, annual depreciation of $.9 million, and amortization of $.5 million. You have determined the current average EBITDA multiple of comparable ice cream shops is 3.9x.What is the value of Salt & Straw?

Answer 1

The value of Salt & Straw is $24.14 millions

Step-by-step explanation:

According to the given data we have the following:

Ebit=$4.79 million

annual depreciation= $0.9 million

amortization=$0.5 million

Therefore, to calculate the value of Salt & Straw first we have to calculate the EBITDA as follows:

EBITDA=Ebit+ annual depreciation+ amortization

=$4.79 million +$0.9 million +$0.5 million

=$6.19 million

The EBITDA Multiple Rate=3.9 TIMES

Therefore, the value of Salt & Straw=$6.19 million×3.9= $24.14 millions