Concept explainers
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 |
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. |
|
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 =
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