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805+ (Hard)|   Math Related|   Tables|      
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maybeam
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All figures are in millions (M) except for EPS which is in $/share. Updated on: 20 Dec 2023, 09:53
Originally posted by maybeam on 15 Jul 2012, 08:04.
Last edited by BottomJee on 20 Dec 2023, 09:53, edited 5 times in total.
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If the EV/Revenue multiple is expressed as a ratio of Enterprise Value to Revenue, the median EV/Revenue multiple for this set of 4 companies is between 2.0x and 3.0x.: Yes If Cool-Go's P/E (price-to-earnings or market capitalization-to-earnings) ratio is 25.9, the number of Cool-Go shares outstanding is greater than 350M.: No The range for Enterprise Value is greater than the range for Market Capitalization.: No
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95% (hard)

Question Stats:

52% (03:45) correct 48% (03:38) wrong based on 164 sessions

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  • All figures are in millions (M) except for EPS which is in $/share. EPS stands for Earnings Per Share. Market Capitalization is defined as stock price (measured in $/share) multiplied by shares outstanding.
  • "Earnings" when used in the expression EPS (earnings per share) and P/E (price-to-earnings ratio) refer to the metric net income (not shown).
  • Capitalization metrics such as market capitalization value and enterprise value are as of January 30, 2008. Other metrics are as of December 2007.
  • EBITDA is a financial metric for profitability and is defined as earnings before interest, taxes, depreciation, and amortization.

(Sort ↕ the table by clicking on the headers)
Company
Name		Market
Capitalization		Enterprise
Value		RevenueEBITDAEPS
Cool-Go174,565159,28717,21210,11821.16
iPay34,92529,8898,6743,1351.65
Sahara31,96430,15119,2581,4071.86
InterPactive14,40813,0096,8178901.61
For each of the following, select Yes if the statement is true based on the information provided; otherwise, select No.
Yes No
If the EV/Revenue multiple is expressed as a ratio of Enterprise Value to Revenue, the median EV/Revenue multiple for this set of 4 companies is between 2.0x and 3.0x.
If Cool-Go's P/E (price-to-earnings or market capitalization-to-earnings) ratio is 25.9, the number of Cool-Go shares outstanding is greater than 350M.
The range for Enterprise Value is greater than the range for Market Capitalization.
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If the EV/Revenue multiple is expressed as a ratio of Enterprise Value to Revenue, the median EV/Revenue multiple for this set of 4 companies is between 2.0x and 3.0x.: Yes If Cool-Go's P/E (price-to-earnings or market capitalization-to-earnings) ratio is 25.9, the number of Cool-Go shares outstanding is greater than 350M.: No The range for Enterprise Value is greater than the range for Market Capitalization.: No
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All figures are in millions (M) except for EPS which is in $/share. 26 Jul 2012, 23:36
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A) Approximate EV/R:
Cool-Go: 160k/16k = 10
iPay: 30k/8k = 3.75
Sahara: 30k/20k = 1.5
InterPactive: 13k/7k = 1.8

Arrange in order: 1.5 1.8 3.75 10
The median is approximately 2.7
YES

B: Not sure about this one...
Quote:
Market Capitalization is defined as stock price (measured in $/share) multiplied by shares outstanding.
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Market Capitalization/Earnings = 25.9
174565/25.9 = 6739M
Earnings/Earnings per Share = No of Shares
6739M/21 = 320M Shares
NO

C)NO
Just compare the ranges.
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All figures are in millions (M) except for EPS which is in $/share. 27 Jul 2012, 09:58
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The source for this question is GMATPill

https://www.gmatpill.com/gmat-practice-t ... stion/1511

Quote:
If Cool-Go's P/E (price-to-earnings or market capitalization-to-earnings) ratio is 25.9, the number of Cool-Go shares outstanding is greater than 350M.
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Given: 174,565M = market cap
Given: 25.9 =m arket cap / earnings ratio of 25.9
Calculate: Then earnings = marketcap / 25.9
Calculate: Earnings: 174,565M / 25.9 = 6740M (calculated)

Given: Earnings per share is 21.16
Calculate Shares = Earnings / Earnings per share = 6740M / 21.16
= 318.5M shares

The number of shares is NOT greater than 350M shares.
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All figures are in millions (M) except for EPS which is in $/share. 04 Jan 2026, 04:17
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