Preview

Breadtalk Analysis

Powerful Essays
Open Document
Open Document
9639 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Breadtalk Analysis
Executive Summary
This reports aims to establish the current issues that BreadTalk Group Limited is facing and how the issues will have an impact on their earnings and share valuations. In our report, a computation of DuPont ROE Analysis between BreadTalk, Food Junction and Auric Pacific was examined and it was noticed that BreadTalk’s ROE is predominantly higher than Food Junction and Auric Pacific over the years of our forecast from FY2012 to FY2015. Based on the calculations, several assumptions and limitations on BreadTalk’s intrinsic value of share price were analysed and consequently estimated with four models. These models are Dividend Valuation Model, Free Cash Flow to Equity Model, Price/Earnings Ratio Model and the Price/Book Value Model.
Through the use of the mentioned models, we will conduct an in-depth analysis and evaluate on the results obtained to provide an assessment of the company’s current position and the future prospects.

Contents
Executive Summary 1 1. Introduction to BreadTalk 4 1.1 Overview 4 1.2 Company Structure 4 2. Economic Environment 6 2.1 Overview 6 2.2 Macroeconomic 6
I. Commodity Price 6
II. Gross Domestic Product (GDP) 7
III. Inflation 8
IV. Consumer Price Index (CPI) 9
V. Interest Rates 10 3. Industry Analysis 11 3.1 Overview 11 3.2 Market Segmentation 11 3.3 SWOT Analysis 12
I. Strength 12
II. Weakness 13
III. Opportunities 13
IV. Threats 14 4. Financial Analysis 15 4.1 Recent Financial Performance 15
I. Diluted Earnings per Share (EPS) 15
II. Dividends per Share 16
III. Payout Ration 16 4.2 DuPont Analysis 17
I. Return of Equity (ROE) Analysis 17
II. Profit Margin Analysis 19
III. Total Assets Turnover 19
IV. Financial Leverage 20 4.3 Required Rate of Return 21
I. Beta (β) 21
II. Risk Free Rate 24
III. Market Risk Premium 24
IV. Capital Asset Pricing Model (CAPM) 25 4.4 Growth Rate 25 5. Valuation Analysis 27 5.1 Dividend Discount Model (DDM) 27
I.

You May Also Find These Documents Helpful

  • Better Essays

    Acct-504 Final Project

    • 1253 Words
    • 4 Pages

    Tootsie Roll and Hershey are two similar companies with a similar product offering, but they operate on entirely different scales. In an effort to determine the better investment of the two companies we will utilize multiple financial analysis ratios to gauge the health of the respective companies in terms of liquidity (the ability to pay short-term liabilities and respond to opportunities), solvency (the long-term viability of the company) and profitability (the efficiency at which the can turn it’s resources into profits). However, the snapshot picture of health that a single years worth of financial statements provide is not enough. Below we have offered a horizontal analysis of the respective companies to show the change in their health from 2012 to 2013 and analyzed the two companies against each other to show why we recommend Hershey as the better investment.…

    • 1253 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    This is a brief analysis and comparison of select financial ratios of four companies: two in the manufacturing and two in the retail food industries. The financial ratios analyzed are the current ratio, debt ratio, profit margin, return on assets. I should point out that I used the most recent financial reports provided for each company, although in some cases they may not represent the same years. All dollar figures are in thousands.…

    • 2439 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    Listed below you will find a quick analysis of the company using productivity, Liquidity and solvency ratios. This analysis is accompanied by vertical and horizontal analysis. These analysis gives anyone inquiring a good picture of the company’s overall performance. This analysis is also a good way to determine the company’s financial standings for the said years.…

    • 1990 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    Cabeza, a veteran conquistador is part of a failed journey that was meant to find areas on the Gulf of Mexico to settle and to find mythical structures, these are the reason why he survived to tell the tale. Cabeza being a veteran conquistador has built a knowledge in survival. Cabeza also knows several languages, allowing him to communicate with ease. Cabeza also has knowledge in the medical field, making him a valuable asset. Overall, Cabeza was able to survive because he had survival skills, he knew several languages, and he had medical skills.…

    • 481 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Foodcrop Spot

    • 570 Words
    • 3 Pages

    From the Financial and Market data, some ratios indicate that Foodcorp needs to be improved since these following ratios – Inventory Turnover, Return on average…

    • 570 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Capstone Project Bus599

    • 2781 Words
    • 12 Pages

    Analyze the company’s mission and vision statements against the performance of the organization. Then, evaluate how well the company lives out its mission and vision…

    • 2781 Words
    • 12 Pages
    Powerful Essays
  • Better Essays

    Capital Valuation Paper

    • 1626 Words
    • 7 Pages

    Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. Berkshire Hathaway Inc. has a goal to increase its ownership of first-class businesses. Berkshire Hathaway Inc. must determine if the project is worthwhile. One way an organization can determine its worth of a project is by using the valuation process. This process links risk and return to help estimate the worth (Gitman, 2009). According to Investopedia,” market value is often different from book value because the market takes into account future growth potential.” This paper will show 6 different valuation models showing the market price of Berkshire Hathaway Inc.’s debt, if any, and equity. Along with the models this paper will show calculations to support these findings, including those involving rates of return. Finally, Team D will defend which valuation model best supports their findings.…

    • 1626 Words
    • 7 Pages
    Better Essays
  • Good Essays

    kroger, essay

    • 39938 Words
    • 160 Pages

    An Equity Valuation and Analysis of Kroger Co. As of November 1, 2007 Brandon Dunn Cliff Fielden Trey Keith Sean Murass brandon.dunn@ttu.edu cfielden2@yahoo.com trey.keith@ttu.edu murass02@yahoo.com 0 Table of Contents Executive Summary……………………………………………………………………..…………….. 4 Business & Industry Analysis……………………………………………………………. ………..11 Company Overview……………………………………………………………………………

    • 39938 Words
    • 160 Pages
    Good Essays
  • Powerful Essays

    Blackmores Ltd

    • 7597 Words
    • 31 Pages

    Blackmores LTD (BKL) which started in the 1930s is a major player in developing and marketing products and services that deliver a more natural approach to health, based on their expertise in vitamins, minerals, herbs and nutrients.…

    • 7597 Words
    • 31 Pages
    Powerful Essays
  • Powerful Essays

    OUTLINE 1

    • 1373 Words
    • 8 Pages

    Introduction to Financial Analysis for Corporations, 3’rd Edition (dark grey cover), by George W. Blazenko. A hard-copy can be purchased from the SFU bookstore. An electronic version of this manuscript is available free of charge from the course website. Documents…

    • 1373 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    If the market value of a stock is lower than its intrinsic value, this stock is defined as “trades at a discount”. To figure out whether AGI stock is traded at a discount to comparable companies, as its management believed, we can simply apply multiple which comes from the average multiple of its comparable companies. Considering fluctuation of future after-tax earnings caused by the change in capital structure, we prefer to use TEV/EBITDA multiple in this case. Amtelecom Group consists of two lines of business which has to been taken into consideration. We separately calculate the value of both companies and their summation. In this way, we get a relative conservative outcome which indicates the Enterprise Value of AGI is 56.9 million (Note 1). As it is mentioned in the case that AGI’s current stock price implied a TEV of 53.7 million, the stock is really traded at a discount.…

    • 2142 Words
    • 9 Pages
    Good Essays
  • Satisfactory Essays

    Dieter

    • 391 Words
    • 3 Pages

    • analyse and interpret the financial stability of a company using the information provided in…

    • 391 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Krispy Kreme doughnuts, Inc is facing a crisis of a drop in share price like never before since its initial public offering in the year 2000. The situation of Krispy Kreme does not look so bright after it has reacquire the underperforming franchisees’ stores worth of 170$ million. In the end of 2004, the company has some problem related with its accounting for the acquisitions of certain franchisees that it has to restated its financial statement, which would lower the pretax income by 6 to 8 million. The company fails to file the report on time. This puts the company at risk of being delisted out of NYSE, moreover there’s a low carbohydrate diet trend coming. All those storms have put the company’s share to sell at less than $10 a share. Therefore we recommended Krispy Kreme consider buying back its share…

    • 757 Words
    • 4 Pages
    Good Essays
  • Good Essays

    2. Identify the development directions 'available' to the company in the future and assess the relative suitability of each of these options by ranking them (using Illustration as an example).…

    • 1448 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Below are the various systems that the company has in place, with the corresponding analyses.…

    • 888 Words
    • 4 Pages
    Good Essays