Financial Analysis:Estimation of the equity value of the company

Financial Analysis:Estimation of the equity value of the company Essay example
Masters
Essay
Finance & Accounting
Pages 13 (3263 words)
Download 0
PART A Answer to Question 1 Equity valuation can be defined as the process of identifying the current market value of the company which is also regarded as the current market capitalization of the company. There are several step of equity valuation process and it requires an adequate understanding of financial management techniques and acumen…

Introduction

During this particular process, the analyst should consider the competitive environment as well which will be of great source in identifying which aspects of the company’s business presents the greatest challenges and opportunities. The analyst must have an understanding of the industry structure as well and basic economic factors such as demand and supply and what are its deriving factors. After obtaining an adequate understanding of the entity and its industry, the next step is to forecast the financial performance of the company in the foreseeable future. This can be define as forecasting sales, dividends, variable and fixed production costs, marketing cost and other related administrative costs. The main purpose of this step is to identify how much profit is the company going to make in near future, because in general terms, today a company can be valued by its investors based on how much money it is going to make in the coming years. There are two approaches through which this analysis can be made. The first approach is regarded as the top down forecasting approach which is based on the average industry performance to which that particular corporation belongs. ...
Download paper
Not exactly what you need?

Related papers

Intrinsic Value of Boeing Company
It is the chief leader in innovation and aerospace products and services. The demands of the customers made the company continue to expand its products and services such as development, design, support, sales and manufacture of commercial jetliners, satellites, military aircraft, missile defense, launch systems and services and human space flight (Intrinsic Value of Boeing Company, 2010). The…
Financial Modeling Of Value At Risk Portfolio
The analysis is carried out on the value at risk of a portfolio of four shares employing the techniques deployed in financial modeling. The report is also carried out on a 260-day value-at-risk (VAR) of the portfolio of the shares used to make the report. The shares have been analyzed on a daily basis, to normalize the matching volumes of the traded shares. Various plans, methods and project…
Financial Management.Rolls Royce Company
It has been one of the most reliable, trust-worthy, and reputable companies in the industry it operates. Rolls Royce has chosen for the evaluation requirement of this report. (Rolls Royce 2012). Part 1: Capital Asset Pricing Model (CAPM] The Capital Asset Pricing Model has been developed to generate estimation over the capital assets of an organization. The model assists in evaluating asset’s…
Equity
Executive Summary: Owens & Minor Inc. Ticker: OMI Recommendation: Hold Price: $29.78 on 31.03.2010 Price target one year: $34.95 Highlights: A fortune 500 company headquartered in Richmond, Virginia. Wide distribution network throughout the United States. The provider of the broadest selection of branded products. Unique, superior products are offered through non competitive partnerships with…
Do financial management decisions influence firm value?
Investment Decisions The BP is a well-established company that diversified into business such as chemicals, coal, gas, minerals and nutrition that would improve the effectiveness of the company. This diversification strategy led to problems in allocating investment resources between the different division’s projects of the large conglomerate. According to Dayananda (2002), the investment has led…
Financial statement of a company
When this is done, the company has the knowledge of whether it has the liquidity to settle any debts that are due. The financial statements are also important in determining the costs of productions and the selling rates. When this is done, then the company is able to determine the profit margins that it makes. This helps develop the land increase and the bottom line. The analysis of financial…
prepare an equity research report comparing the financial performance of your chosen retail company with the financial performan
Through prudent risk management and optimum allocation of resources and assets, the company has been able to withstand financial difficulties and turmoil and has been able to portray sound and stable financial outlook. Today the company now has over 900 stores worldwide which cater to wide demography of customers across the globe. The company was founded by the name of John David stores in 1981…