Single company valuation study.
1) Analyse company’s business activities
- Use your own explanation of how company’s business model works.
2) Identify key drivers of business model and competitiveness.
- Use independent data on company’s markets
- Assess future prospects for these markets
3) Compile financial ratios for performance, efficiency, liquidity and solvency for company and at least three competitors
- Ratio analysis over the past five years
- Comparing these ratios – draw your own conclusions, NOT just descriptions
4) Detailed forecasts of income statement and balance sheet for next five years and in perpetuity
- Identify key drivers of business model and competitiveness.
5) Apply valuation techniques, with full spreadsheet support (see tutorials)
- Capital Asset Pricing Model (CAPM),
- Discounted Dividend Model (DDM),
- Discounted Cash Flow (DCF),
- Relative price multiples of earnings and cash flow.
