Discuss how the case firms aop has developed over

Assignment Help Financial Accounting

Reference no: EM133434203

Task 1: Reformulate Compass fiscal years between 2017 to September 2022. (550 words; 20%) a) Clearly demonstrate net operating assets (NOA), net debt, net operating profit after tax (NOPAT), Core NOPAT, if any, and free cash flows (FCF). It is essential to show the full reformulation in appendix. No Excel submission is required.

b) Briefly discuss Compass's key fundamental information. You must discuss these key reformulated figures to reflect the case firm's strategic choice, external impacts, and the impacts of IFRS 16 and IFRS 15 on balance sheet and income statement information.

c) Discuss the theoretical role of reformulation in valuation. The discussions must include relevant literature. Task 2: Based on your reformulation, illustrate the advanced Dupont analysis. (900 words; 40%)

a) Clearly demonstrate return on equity (ROE), return on operating assets (RNOA), financial leverage, and spread of operating profitability over the analysed period. All ratios involving balance sheet items should be based on the opening balance sheet amounts.

b) Critically discuss Compass's past and current performance in relation to its strategy and external macroeconomic and trading conditions. It is desirable that you discuss top-line performance (e.g. segment sales performance), operating efficiency, and investment management, at least.

Task 3: Compute abnormal operating profit (AOP) during the analysed period (650 words; 25%)

a) Discuss how the case firm's AOP has developed over the analysed period, keeping cost of capital (WACC) constant.

b) Critically discuss whether Compass is potentially a growth firm

Task 4: Summarise Compass valuation potential for the fiscal year 2022 based on your previous analysis and its average trading price between September - December 2022

Reference no: EM133434203

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