What this is
How the 2005 sale price of 4Kids’ 3% stake compares with the Tokyo parent’s book value: about 1.1–1.3 times book and 4.5–4.9 times profit.
How it’s built
- $960,000 for 3% implies $32m for the whole company.
- At ¥110–120 per dollar that is ¥3.5–3.8bn, against parent net assets of ¥3.0bn (February 2005) and ¥3.1bn (February 2006), and 2005 profit of ¥790m.
- 3% of 60,000 shares is 1,800 shares: about $533 a share against book of about ¥49,700.
What we assumed
- The exchange rate was ¥110–120 per dollar.The research gives no source for this rate; it is an assumption.
- Parent book value stands in for the company.The group’s book value is unknown; the International arm is excluded.
Sanity check
A sale among insiders at about book value looks like a formula price, not a market valuation, so these multiples say little about what the company was worth.
Where it comes from
Our calculation from other figures in the trainer’s notes.
Show the working
- Implied 100pct: $32,000k
- PB against year to February 2005 book: 1.18–1.29
- PB against year to February 2006 book: 1.13–1.24
- PE year to February 2005: 4.5–4.9
- Price per share $: 533
- Book per share year to February 2005 ¥: 49,714
- 960/0.03 = $32.0m
- × assumed ¥110–120/$ (UNSOURCED FX, assumption) = ¥3,520–3,840m vs parent book (365.4+RE) FY2/05 2,982.8 / FY2/06 3,105.9 and FY2/05 NI 789.65
- 3% of 60,000 shares = 1,800 shares →