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also should have been made to the other multiples that had
incorporated Schedule A depreciation deductions into the
computation of net income. Third, we find it unlikely that Mr.
Kimball would make adjustments for accounting method differences
for Belle Fourche when he assumed that a hypothetical buyer would
not make such adjustments for True Oil.
Respondent asserts that adjusting Mr. Kimball’s numbers by
the aforementioned depreciation amounts would result in the
following values (rounded to the nearest $1,000):
Kimball Respondent’s
report revisions
EBDIT latest 12
months $4,957,000 $9,881,000
EBDIT 5-year
average $6,538,000 $8,837,000
We agree with respondent’s revision to EBDIT latest 12 months,
but we find that the 5-year average amount should have been
$9,257,000. Adjusting for these changes, and using the same
selection of multiples and weighting factors employed by Mr.
Kimball, we find that the Kimball report’s market value of
invested capital (debt and equity) should have been $37,240,000,
rather than $30,770,000.
Another apparent error in Mr. Kimball’s computations relates
to debt owed by Belle Fourche to its shareholders as of the
valuation dates. Mr. Kimball subtracted $17,115,350 of interest-
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