Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the 7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data. Stryker Corporation ($ millions) Sales Net income Number of common shares (millions) Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt Indicators of Value Price/earnings (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) Indicators Price/earnings (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) 9,021 1,616 378 Stryker's implied stock value 2,163 22.30% 9,047 2,764 Stryker 17.8 3.5 3.1 2.0 Mean (of Peers) 20.9 3.5 3.5 2.0 BAX 18.8 3.1 4.5 1.8 BDX MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity. Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places. 23.1 3.1 4.2 2.1 COV 20.3 3.5 3.3 1.8 MDT 15.8 4.1 2.9 1.8 SNN 23.2 3.0 3.2 2.3 STJ 24.6 3.9 4.1 2 ZMH 20.8 3.8 2.5 1.8
Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the 7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data. Stryker Corporation ($ millions) Sales Net income Number of common shares (millions) Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt Indicators of Value Price/earnings (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) Indicators Price/earnings (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) 9,021 1,616 378 Stryker's implied stock value 2,163 22.30% 9,047 2,764 Stryker 17.8 3.5 3.1 2.0 Mean (of Peers) 20.9 3.5 3.5 2.0 BAX 18.8 3.1 4.5 1.8 BDX MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity. Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places. 23.1 3.1 4.2 2.1 COV 20.3 3.5 3.3 1.8 MDT 15.8 4.1 2.9 1.8 SNN 23.2 3.0 3.2 2.3 STJ 24.6 3.9 4.1 2 ZMH 20.8 3.8 2.5 1.8
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 4AP
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Transcribed Image Text:Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York
Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to
calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the
7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data.
Stryker Corporation ($ millions)
Sales
Net income
Number of common shares (millions)
Earnings before interest and tax
Tax rate
Book value of equity
Book value interest-bearing debt
Indicators of Value
Price/earnings (X)
MV firm/sales (X)
MV equity/BV equity (X)
MV firm/BV firm (X)
Indicators
Price/earnings (X)
MV firm/sales (X)
MV equity/BV equity (X)
MV firm/BV firm (X)
9,021
1,616
378
2,163
22.30%
Stryker's
implied stock
value
9,047
2,764
Stryker
17.8
3.5
3.1
2.0
Mean (of
Peers)
20.9
3.5
3.5
2.0
BAX
18.8
3.1
4.5
1.8
BDX
23.1
3.1
4.2
2.1
MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity.
Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places.
COV
20.3
3.5
3.3
1.8
MDT
15.8
4.1
2.9
1.8
SNN
23.2
3.0
3.2
2.3
STJ
24.6
3.9
4.1
2
ZMH
20.8
3.8
2.5
1.8
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