What the competitive forces behind the industry structure

Reference no: EM132182699 , Length: 10

Business Valuation Report -

The company selected for this report is: Company Name: Woolworths Limited.

Your analyst team (comprising 5 students) must advise a well-diversified high net-worth individual who is interested in investing in shares with a fundamental value greater than the share price. As financial analysts, you are required to write a detailed recommendation report on whether to invest in the selected company.

Your report shall be divided in 5 Sections (preceded by a brief executive summary) to address the following questions of your client:

1. What are the competitive forces behind the industry's structure? How does competition affect the margins of the industry and the company? How does the company's profitability compare relatively to its peers (you should select between 3 and 5 industry peers)? What is the firm's business strategy? Please highlight potential investment risks the company could face in the future.

2. Analyse how the market is pricing the firm using different relative (or market) valuation techniques. Please use the same group of industry peers identified in the previous section.

3. Estimate carefully the cost of debt, cost of equity and cost of capital for this company.

4. Estimate the free cash flows of the company.

5. Estimate the target price of the company, issue a buy/hold/sell recommendation to your client, and draw your conclusion.

Reference no: EM132182699

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len2182699

12/1/2018 3:33:28 AM

Your report is expected to be submitted by due dates. Your submission should contain all of the following: A 7 to 10 page recommendation report (in font Times New Roman – font size 11) in Word or PDF, discussing the scope of the work, your justified assumptions, findings and recommendation. Please refer to examples of professional analyst reports (available on iLearn) when formatting your team report;

len2182699

12/1/2018 3:33:23 AM

A cover page indicating: (a) your team name; and (b) members’ name, student number, email address. You can also decide to allocate sections of the assignment to team members – making sure to indicate though this allocation on the cover page – to limit the risk of free-riding behavior. Please also identify the team leader for email correspondence. Your cover page should be the first page of your assignment; A spreadsheet model (in Excel), showing all your numerical assumptions, steps of the estimation, and company’s valuation. The team leader ONLY should submit the equity report to the Turnitin class-link that will be activated on iLearn. The team leader should also submit the Excel file containing all the calculations in a separate folder that will also be available on iLearn. Please give both these files your team name (e.g., BestTeamEver01.xls, and BestTeamEver01.doc or BestTeamEver01.pdf). More information on the submission process will be provided in class in Week 4.

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