Valuation Using Price-to-NOA Multiple The following table provides summary data for Cerner Corporation (CERN) and its competitors, Allscripts Healthcare Solutions Inc. (MDRX) and McKesson Corporation (MCK). (in millions) CERN MDRX MCK Company assumed value -- $2,063 $21,063 Equity assumed value -- $1,607 $19,962 Net operating assets $4,296 $2,007 $ 9,195 Book value of equity $4,928 $1,551 $ 8,094 Net nonoperating obligations (assets) $(632) $456 $ 1,101 Common shares outstanding 318.4 shares 166.7 shares 184.9 shares (a) Compute the price to net operating assets ratio for both Allscripts Healthcare and McKesson. (Round your answers to two decimal places.) MDRX Answer MCK Answer
Valuation Using Price-to-NOA Multiple
The following table provides summary data for Cerner Corporation (CERN) and its competitors, Allscripts Healthcare Solutions Inc. (MDRX) and McKesson Corporation (MCK).
| (in millions) | CERN | MDRX | MCK |
|---|---|---|---|
| Company assumed value | -- | $2,063 | $21,063 |
| Equity assumed value | -- | $1,607 | $19,962 |
| Net operating assets | $4,296 | $2,007 |
$ 9,195 |
| Book value of equity | $4,928 | $1,551 | $ 8,094 |
| Net nonoperating obligations (assets) | $(632) | $456 | $ 1,101 |
| Common shares outstanding | 318.4 shares | 166.7 shares | 184.9 shares |
(a) Compute the price to net operating assets ratio for both Allscripts Healthcare and McKesson. (Round your answers to two decimal places.)
MDRX Answer
MCK Answer
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(b) Use Allscripts Healthcare and McKesson as comparables, along with the price to NOA ratios from part a, and then estimate for Cerner its company intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. (Round the intrinsic value and equity intrinsic value to the nearest million and the value per share to the nearest cent.)
Average of the two rounded ratios in (a) above
Answer
(Round to two decimal places.)
Using the rounded average calculation above, calculate the following:
Intrinsic value
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