Evaluate the market anticipated performance

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Reference no: EM13670957

Part 1:

Evaluate the "market anticipated" performance of a public company: FOODCO

An investor is analyzing the current valuation of FOODCO, and is evaluating the prospective cash flows based on available public information. Utilizing available projections from the analyst community, and rolling those estimates forward, the investor has established a projected set of cash flows. Does FOODCO's current market valuation differ from "Street's" estimates of growth? What growth rate does the market anticipate, based on the current margins? Or alternatively if we assume the revenue of the "Street" are accurate, what is the market's anticipated EBITDA margin level?

Using the "Street's" projections on the Leveraged Cash Flow page, does the current FOODCO share price reflect the "Street's" assumptions regarding revenues and margin levels?

Using the assumed margins, roughly what growth rate is the market currently ascribing to FOODCO, based on the current share value? (PV per share within $0.10 of current share price). Note: You will need to modify the Sales Growth located in the Assumptions worksheet.

Alternatively, assuming the "Street's" assumed revenue projections ARE accurate, what EBITDA margin would justify the current share price? Note: You will need to modify the EBITDA Margin located in the Assumptions worksheet.

Part 2:

Question 1: Does the current share price reflect the "Street's assumptions on projected cash flows?

Question 2: What revenue growth rate is the market ascribing to FoodCo?

Question 3: Assuming the "Street's" projected growth rate, what EBITDA margin justifies the current share prices?

Reference no: EM13670957

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