References: Articles: Damodaran‚ A.‚ (2009)‚ Ups and Downs: Valuing Cyclical and Commodity Companies Damodaran‚ A.‚ (2008)‚ What is the risk free rate? A Search for the Basic Building Block Damodaran‚ A.‚ (2011)‚ Equity Risk Premiums (ERP): Determinants‚ Estimations and Implications Demirakos‚ E.‚ Strong‚ N.‚ Walker‚ M.‚ (2004)‚ What Valuation Models Do Analysts Use? Dimson‚ E.‚ Marsh‚ P.‚ Staunton
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Key Points Chapter 1: Key to success – recurring cash flows Chapter 2: Key to success for Entrepreneurs – persistence! Chapter 3: Key to success for BP- it Explains 1) Management‚ 2) Management‚ 3) CF Executive Summary – the most important section Include ROI and NPV (IRR?) Ratio analyses Chapter 4: Key point – must use the same accounting method Key point: Successful entrepreneurs know their cash position at all times. Chapter 5: Liquidity – the most important ratios Key point – Entrepreneurs
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Valuation? Valuation: Methods of quantifying how much money something should be exchanged for today‚ considering future benefits. We will teach 4 valuation methods Trading Comparables Transaction Comparables Sum-of-the-Parts Valuation Discounted Cash Flow Analysis (DCF) $ 2 Why is Valuation important? Acquisitions: How much should we pay for the company? Divestitures: How much should we sell our company for? Sell-side Research: Should our clients buy‚ sell or hold a given stock (fixed income
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2. Clover Machines Case: Dabbling in International Markets? 1. What are overall benefits of tapping international markets? Does it make sense for Clover given its success in using domestic capital markets? Global financial markets are often larger than domestic financial markets. This means that financing issue size can be larger‚ costs can be lower and contract flexibility can be higher. But global markets are typically only available for large firms. Clover appears to be of sufficient size
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There are several reasons why AGI should consider Mercury Athletic as an appropriate target for acquisition. First‚ acquiring Mercury could improve both companies financially. Acquiring Mercury would double AGI’s revenue. Although Mercury’s financial performance has been disappointing‚ they experienced top line growth of 20% in 2006. Unfortunately‚ their profitability has been disappointing due to price concessions to big box retailers and an unsuccessful women’s line. Mercury’s (and ultimately
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Bachelor Thesis Department of Business Studies Århus‚ the 3rd of May 2010 Valuation of BMW - Financial & Strategic Analysis Authors Rasmus Ramshøj Pløen Exam no. 282821 BSc (B/IM) Mikkel Kronborg Olesen Exam no. 283755 BSc (B) Academic Advisor Nicolai Borcher Hansen ASB Aarhus School of Business TABLE OF CONTENTS 1 PREFACE ..............................................................................................................................................................
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to analyze the deal and conclude what terms would be the most profitable for Sierra. The money Arcadian received from Sierra would be used for further financing of the firm’s growth. Chu’s initial analysis involved financial forecasting of equity cash flows. His final steps would be to estimate the terminal value for the
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Ford Motor Company Valuation Business Case Stern Value Management Interview Vasishta Atmuri December 5‚ 2014 Ford Motor Co. Analysis| Stern Value Management Interview Introduction Ford Motor Co. manufactures and sells cars and is the sixth-largest car maker Stock Price in $ 20 1000000000 800000000 600000000 400000000 200000000 0 15 10 5 FINANCIAL HIGHLIGHTS Ticker F Date‚ as of 12/03/2014 Stock Price $16.01 P/E 10.47x Market Cap (mm) $61‚617 Dividend Yield Ford Motor Co. (NYSE:F)
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(sufficient cash flow to service the obligation)‚ capital (net worth)‚ collateral (assets to secure the debt)‚ and conditions (of the borrower and the overall economy). Five C ’s of Credit (5 C ’s of Banking) www.wikicfo.com¶ 1. Cash Flow 2. Collateral 3. Capital 4. Character 5. Conditions The “5 C’s of credit” or "5C ’s of banking" are a common reference to the major elements of a banker’s analysis when considering a request for a loan. Namely‚ these are Cash Flow‚ Collateral
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disbursement of the debt. Once the debt is brought down to industry sustainable levels‚ we can estimate the terminal value using the WACC valuation‚ to estimate the Present Enterprise Value that may be suitable for the proposed acquisition. 1.2. Cash flows valued for 2008 through 2012 The present value of the UFCF is 1 255‚3. Here after the details of how we come to this result. We need to determine the discount rate using the comparable company’s averages. Equity Net Debt/ Debt/ Equity Asset
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