Business Valuation

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VALUATIONMETRICSANDWEIGHTSusewithDEALSTATS.xlsx
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VALUATION

VALUATION OF BALTIMORE RESINS, INC.
MULTIPLES TIMES EQUALS
VALUE/SALES 0.5075 $7,859,955 $3,988,927
VALUE/INCOME 3.12 $106,344 $331,793
VALUE/INVESTED CAPITAL 2.62 $1,576,510 $4,130,457
VALUE DCF (from separate spreadsheet) $518,459
WEIGHTS ON METRICS
VALUE/SALES 0.20 $797,785
VALUE/INCOME 0.40 $132,717
VALUE/INVESTED CAPITAL 0.20 $826,091
VALUE DCF (from separate spreadsheet) 0.20 $103,692
1.00
SUMMATION $1,860,286

METRICS

VALUATION METRICS AND WEIGHTS
DISCOUNT RATE 22.38%
(median values)
SIC 5000 SIC 5100 SIC 2821
WHOLESALE- WHOLESALE- PLASTIC MATERIALS,
DURABLE NON-DURABLE SYNTHETIC RESINS
& NONVULCAN ELASTOMERS
VALUE/SALES 0.45 0.42 1.16
VALUE/INCOME 3.1 3.1 3.3
VALUE/INVESTED CAPITAL 2.2 2 7.3
MORSE WEIGHTS 0.45 0.45 0.1
COMMENT: I UNDERWEIGHT SIC 2821 BECAUSE THE SAMPLED FIRMS WERE
MORE PROFITABLE THAN BALTIMORE RESINS.
IN ADDITION, THE SAMPLE SIZE WAS SMALL.
WEIGHTED MULTIPLES
VALUE/SALES 0.5075
VALUE/INCOME 3.12
VALUE/INVESTED CAPITAL 2.62

COMPANY DATA

SUMMARY OF DATA-BALTIMORE RESINS, INC.
SALES SALES INCOME INCOME INVESTED
(2011 tax return) (2011 P&L) (2011 tax return) (2011 P&L) CAPITAL
2008 $7,363,032 $7,363,032 $281,332 $281,332 $1,416,913
2009 $6,755,341 $6,755,341 $111,117 $111,117 $1,280,145
2010 $8,099,068 $8,099,068 $104,126 $104,126 $1,635,571
2011 $9,242,585 $9,202,169 ($140,747) ($1,653) $1,973,412
$7,865,007 $7,854,903 $88,957 $123,731 $1,576,510
INCOME MID-POINT $106,344
SALES MID-POINT $7,859,955
COMMENT: I have not evaluated EBIT and EBITDA, because I do not believe that the addition of
those metrics (multiples) would materially change my valuation opinion.
COMMENT: I note two offsetting trends, as I average corporate statistics over four trailing years.
Sales have been rising, and income has been dropping. These seem to promise some netting out,
as increased sales can be "mined" for profits.