Public financial statements of a company, Financial Management

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?

Posted Date: 2/26/2013 2:01:06 AM | Location : United States







Related Discussions:- Public financial statements of a company, Assignment Help, Ask Question on Public financial statements of a company, Get Answer, Expert's Help, Public financial statements of a company Discussions

Write discussion on Public financial statements of a company
Your posts are moderated
Related Questions
The secondary market is a market where the investor purchases a security from another investor rather than from the issuing corporation. This market is secondary

WAYS AND MEANS ADVANCES (WMAs) WMA is not a permanent source of financing government deficit. But, this is likely to provide greater autonomy to the RBI in conducting monetary

Typically in a bond, we find an inverse relation between the price and the required yield. We know that the price of the bond is the present val

State the second element of capital budgeting decision The second element of capital budgeting decision is the analysis of risk and uncertainty. As the benefits from investment

Explain the distinction in the translation process among the monetary/nonmonetary method and the temporal method. Answer:  Within the monetary or nonmonetary method, every mone

Investor's Considerations As mentioned above, every investor before taking an investment decision, must consider the following aspects: Risk: The primary consideration for t

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

Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee

A proforma cost sheet of a company provides the following data:   RO Cost (per unit)      Raw materials 52

Tax-backed debt obligations are the debt instruments issued by counties, states, cities, towns, special districts and school districts. These are secured by some