Annual report: The annual report of the company includes the financial and other operating descriptions about the business for a particular year. Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements. To identify: The number of Treasury Stock held by Princeline at Dec. 31, 2016.

Question

Below is pertinent information regarding SM Investments Corporation (SM). If you were an Investment Advisor, what would be your recommendation for SM using Fundamental Analysis? (Note: complete the table, then compute for the target prices for 2016 and 2017 based on P/E and P/B ratios, then make your recommendation.) STOCK DATA Last Traded Price (10/7/16) 675.00 Outstanding Shares (Million) 1,204 FORECAST SUMMARY (PHP 2015Actual 2016Forecast 2017Forecast MIL) Revenues 295,878 323,008 347,867 EBITDA 68,270 76,428 84,038 Net Profit 28,455 32,334 35,675 Book Value 427,103 300,554 324,598 Industry P/E 19.9 19.1 17.5 Industry EPS Growth 9.0% 4.0% 9.0% Industry P/B 2.0 2.1 1.9 Industry ROE 12.0% 12.1% 11.0% EPS PE Ratio BVS PB Ratio

Answer 1

Question

Chapter 10, Problem 93.4C

To determine

Concept introduction:

Annual report:

The annual report of the company includes the financial and other operating descriptions about the business for a particular year.

Financial statements:

Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.

To identify:

The number of Treasury Stock held by Princeline at Dec. 31, 2016.

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Below is pertinent information regarding SM Investments Corporation (SM). If you were an Investment Advisor, what would be your recommendation for SM using Fundamental Analysis? (Note: complete the table, then compute for the target prices for 2016 and 2017 based on P/E and P/B ratios, then make your recommendation.) STOCK DATA Last Traded Price (10/7/16) 675.00 Outstanding Shares (Million) 1,204 FORECAST SUMMARY (PHP 2015Actual 2016Forecast 2017Forecast MIL) Revenues 295,878 323,008 347,867 EBITDA 68,270 76,428 84,038 Net Profit 28,455 32,334 35,675 Book Value 427,103 300,554 324,598 Industry P/E 19.9 19.1 17.5 Industry EPS Growth 9.0% 4.0% 9.0% Industry P/B 2.0 2.1 1.9 Industry ROE 12.0% 12.1% 11.0% EPS PE Ratio BVS PB Ratio

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