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The King Mattress Company Had the Following Operating Results for 2018-2019

question 66

Multiple Choice

The King Mattress Company had the following operating results for 2018-2019. In addition, the company paid dividends in both 2018 and 2019 of $60,000 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2018 was $8 and $7 in 2019. The industry average earnings multiple for the mattress industry was 9 in 2019 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,200,000 shares of outstanding stock at the end of 2019.
$\text { Balance Sheet, Dec 31, }$
$\begin{array}{lllll} & 2019 & 2018 \\\text { Cash } & \$ 340,000 & \$ 100,000 \\\text { Accounts Receivable } & \$ 350,000 & \$ 400,000 \\\text { Inventory } & \$ 250,000 & \$ 300,000 \\\hline\text { Total Current Assets }&\$940,000&\$800,000\\\text { Long-lived Assets }&1,080,000&1,100,000\\\hline\text { Total Assets }&\$2,020,000&\$1,900,000\\\hline \text { Current Liabilities }&\$200,000&\$300,000\\\text { Long-term Debt } & 600,000 & 500,000 \\\text { Shareholder Equity } & 1,220,000 & 1,100,000\\\hline\text { Total Debt and Equity }&\$2,020,000&\$1,900,000\end{array}$

$\text { Income Statement, for year ended Dec } 31 \text {, }$
$\begin{array}{lcc} & 2019 & 2018 \\\text { Sales } & \$ 4,750,000 & \$ 4,500,000 \\\text { Cost of Sales } & 4,100,000 & 4,000,000\\\hline\text { Gross Margin } & 650,000 & 500,000 \\\text { Operating Expenses } & 350,000 & 400,000 \\\hline\text { Operating Income } & 300,000 & 100,000 \\\text { Taxes } & 120,000 & 40,000\\\hline\text { Net Income }&\$180,000&\$60,000\\\\\text { Cash Flow from Operations } & 2019 & 2018 \\\text { Net Income } & \$ 180,000 & \$ 60.000\\\text { Plus Depreciation Expense } & 50,000 & 50,000 \\\text { + Decrease (-inc) in AccRec. and Inv. } & 100,000&-\\\text { + Increase (-dec) in Cur. Liabl. }&(100,000) &-\\\text { Cash Flow from Operations }&\$230,000&\$110,000\end{array}$
The value of the company, calculated using the free cash flow multiple for 2019 is:

Apply the concept of depth perception and the cues that contribute to it.

Differentiate between monocular and binocular depth cues.

Recognize and explain the Gestalt principles of perception.

Identify and describe the processes of top-down and bottom-up processing in perception.

Definitions:

URL

The address of a resource on the internet, specifying its location on a computer network and a mechanism for retrieving it.

Web

The vast, interconnected system of unique resources and pages on the Internet, accessible through browsers.

Placeholder

Pre-designed areas in documents or presentations meant to guide the user in entering specific types of content.

Currency

The system of money in general use in a particular country, or the state of being current or up-to-date.