Use the Tables for the Question(s)below

question 46

Multiple Choice

Use the tables for the question(s) below.
Pro Forma Income Statement for Ideko,2010-2015
Pro Forma Balance Sheet for Ideko,2010-2015

-Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation EV/Sales ratio of Ideko in 2015 is closest to:

• A)1.7
• B)1.9
• C)1.6
• D)1.8
• E)2.0

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Definitions:

Allowance Method

An accounting technique used to account for bad debts, which estimates and sets aside a portion of accounts receivable deemed unlikely to be collected.

Uncollectible Receivables

Debts owed to a company that are considered to be uncollectable, indicating that the company does not expect to receive payment due to the debtor's inability to pay.

Percentage of Sales

A financial ratio that compares a particular expense or cost to the total sales revenue, often used to analyze cost behavior or performance.

Note Duration

The total length of time until a note payable or receivable matures and is to be repaid or collected.