Sports Direct Financial Situation Analysis and Their New Project Investment in Morocco
INTRODUCTION: 3 PART I: COMPANY ANALYSIS 5 1- Introduction of the company 5 1.1 History: 5 1.2. The industry: 5 1.3. Sports Direct today: 6 2. Analysis on the financing structure of the company 6 2.1. Sports Direct financial statements: 7 2.2. JJB Sports financial statements: 9 2.3. Ratios of Sports Direct and JJB Sports 12 3. The weighted average cost of capital 15 3.1. Cost of equity: 15 3.2. Cost of debt: 15 3.3. WACC: 16 PART II: PROJECT INVESTMENT ANALYSIS 17 1- Preliminary report: 17 1.1. Project description: 17 1.2. Elements of the project: 18 1.3. Risk and Uncertainty: 19 1.4. Conclusion: 19 2. Project evaluation: 20 2.1. NPV: 20 2.2. Sensitivity analysis: 21 3. Quarterly report: 22 3.1. Introduction: 22 3.2. Comparison: 22 3.3. Risk and uncertainty: 23 4. Conclusion: 24
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INTRODUCTION:
Long ago, when I used to go with my father to the supermarket, I was always asking him to buy me a ball or these fake guns to play with. Sometimes he did buy them for me but sometimes not. I was happy when I had them but when he refused I heard the same reason every time “we do not have the money now but I will buy it for you next time” so I was asking myself: why he was saying to me that he did not have money while he was buying even more expensive goods? And more intriguing, how he would know that he does not have the money now but he will have it next time? These questions hunted me for many years until I started studying finance in high school. Indeed, I realised that my father was actually doing what is called prioritising. In other words, he was making a list of goods from the most important to the family to the least thus my ball was not really important to anyone in the family except myself. That was my answer for the first question. For the second, I discovered that my father was planning what he was going to buy on the expected salary that he was receiving each
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INTRODUCTION:
Long ago, when I used to go with my father to the supermarket, I was always asking him to buy me a ball or these fake guns to play with. Sometimes he did buy them for me but sometimes not. I was happy when I had them but when he refused I heard the same reason every time “we do not have the money now but I will buy it for you next time” so I was asking myself: why he was saying to me that he did not have money while he was buying even more expensive goods? And more intriguing, how he would know that he does not have the money now but he will have it next time? These questions hunted me for many years until I started studying finance in high school. Indeed, I realised that my father was actually doing what is called prioritising. In other words, he was making a list of goods from the most important to the family to the least thus my ball was not really important to anyone in the family except myself. That was my answer for the first question. For the second, I discovered that my father was planning what he was going to buy on the expected salary that he was receiving each
References: Corporate Finance Fundamentals(2006), 7 Edition, Ross/Westerfield/Jordan Risk Free rate