Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You have been presented with the following set of financial statements for National Property Trust, a REIT that is about to make an initial stock offering to the public. This REIT specializes in the acquisition and management of warehouses. Your firm, Blue Street Advisors, is an investment management company that is considering the purchase of National Property Trust shares. You have been asked to prepare a financial analysis of the REIT.

 

National Property Trust
Panel A. Operating Statement Summary
Net revenue $ 112,000,000
Less:  
Operating expenses 44,800,000
Depreciation and amortization 34,000,000
General and administrative expenses 7,200,000
Management expense 4,200,000
Income from operations 21,800,000
Less:  
Interest expense* 6,400,000
Net income (loss) $ 15,400,000

*At 8% interest only.

 

Panel B. Balance Sheet Summary
Assets  
Cash $ 52,700,000
Rents receivable 3,700,000
Properties @ cost 820,000,000
Less: Accumulated depreciation 462,000,000
Properties—net 358,000,000
Total net assets $ 414,400,000
Liabilities  
Short term $ 110,400,000
Mortgage debt* 80,000,000
Total 190,400,000
Shareholder equity† 224,000,000
Total liabilities and equity $ 414,400,000

*At 8% interest only.
†10,000,000 shares outstanding.

Develop a set of financial ratios that will provide Blue Street Advisors with useful information in the evaluation and comparison of National Property Trust with other REITs.

EPS =

NOI =

FFO =

ROC =

Cash Retention per Share =

Net Assets per Share =

Equity or Book Value per Share =

ROA =

ROE =

 

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