Public financial statements of a company, Financial Management

Assignment Help:

Public Financial Statements of a Company

The final exercise is the valuation of a publicly held company's equity. You must base your valuation on the company's public financial statements. Your analysis should include, at a minimum:

1. The value of the equity;

2. A statement about your assumptions including but not limited to the amount and value of debt and working capital requirements;

3. Support for your horizon decision;

4. Explanation for your anchor value, if any;

5. Explanation of your discounting procedure (what is the discount rate and how did you arrive at it);

6. Explanation of how you manage large cash balances now accumulated on your target's balance sheet, if any;

7.  Explanation of your continuing value or other terminal value, if any

8. A reconciliation or your valuation versus the publicly traded equity value of the company - are the differences within a narrow range of mathematical rounding or the outcome of small but not value-relevant estimation risk, or the result of a market inefficiency that prompts a trading rule (go short or go long);

9. Explain, if you can, whether the differences identified in item 8 above result from fundamental market mispricing or a specific type of dynamic in market efficiency (there is no difference might mean strong form "efm" while something else may lie somewhere in the range of strong from to weak form "efm" market dynamics).

10. Be sure to fully explain the numerator in each time period's undiscounted value - ranging from earnings, to free cash flow, to residual earnings, to abnormal earnings growth, etc.

11. Explain the growth dynamics reflected in your quantitative model - what exactly happens to the company's products in the growth you assume, or what amount of the growth can be explained by inflation.

12.    Be sure to identify any information limitations - what are the likely sources of error in your estimate?


Related Discussions:- Public financial statements of a company

Assessing impact on management risk, Assessing Impact: As with the asse...

Assessing Impact: As with the assessment of likelihood, a valuable way of assessing impact would be the creation of categories of impact as follows: Level

Buy side analyst, How to Industry analysis and finally stock picking from B...

How to Industry analysis and finally stock picking from Buy-side perspective

Calculate the price of winnebago stock , Calculate the price of Winnebago s...

Calculate the price of Winnebago stock (Winnebago has no debt so this is the market value of the firm seperated by the number of common shares outstanding.) from the cashflows you

Evaluate the fair value of the net assets, IFRS 3 Business combinations n...

IFRS 3 Business combinations necessitate goodwill on gaining to be calculated at the date control is gained. The second gaining gives ROB a 75% holding and consequently control o

Floating-rate securities that have constant quoted margin, Let us look into...

Let us look into few floaters that have constant quoted margin. 1. De-leveraged Floaters 2.  Inverse Floaters 3.  Dual-Indexed Flo

Factors considered in assigning a credit rating, Credit rating agenci...

Credit rating agencies carry out credit rating. Companies appoint these agencies to assign credit rating for their corporate issues. The rating agencies may condu

Define assumption behind experience approach to forecasting, What is the pr...

What is the primary assumption behind the experience approach to forecasting? The experience approach to forecasting is relies on the assumption that things will happen a fixed

Arbitrage-free valuation approach, The main drawback of the tradition...

The main drawback of the tradition approach of valuation is that it discounts every cash flow using the same discount rate. For example, let us take 5-year (7.00 per ce

Define the matching principle of working capital financing, What is the mat...

What is the matching principle of working capital financing?  What are the advantages of following this principle? The matching principle is while short-term financing is employe

Trial balances and bank reconciliation, Trial Balances: If the trial ba...

Trial Balances: If the trial balance does not result in a "0", the various records will need to be reviewed to pinpoint the spot where the unbalance occurred and any necessary

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd