...Individual Research Project: Oracle Corporation - Business Structure and Valuation. Executive Summary This research project summarizes the business of Oracle Corporation (Oracle), the company’s key competitive advantage factors and the valuation of the company. In this summary, the corporate structure of Oracle, the company’s business and competitive advantage and the valuation of the company are discussed. Oracle is involved in the business of providing enterprise resource software to its customers and clients. This paper is structured into 3 sections. • Section 1 – This section discusses Oracle’s business of providing enterprise resource software. • Section 2 – This section discusses Oracle’s key competitive advantages within its industry. • Section 3 – This section describes the valuation approaches and methods utilized in arriving at a valuation for Oracle Corporation. Table of Contents Section 1 – The Need for Business Valuation. -1- Section 2 – Scope of SSVS1 -2- Section 3 – Valuation Approaches and Methods -3- Section 4 – The Valuation Report -4- Conclusion -4- Bibliography -5- Section 1 The Need for Business Valuation Noting the number of transactions (mergers, acquisitions, initial public offerings (IPOs), etc.), litigations (contractual disputes, bankruptcies, intellectual property...
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...Asset Valuation Introduction As consultants for a new retail company, B.A.S.S. Customized Jewelers, our recommendations for reporting and valuing various assets of the business, as well as inventory policy, capitalization policy, and how these policies will help the company succeed are presented here. In this line of business, demonstrations of depreciation method recommendations are critical to show the inventory allocation and asset costs over the life of the inventory. Lastly, an examination of the policies and alternative valuation methods to justify the use of certain methods to use will be determined. This is the beginning process of meeting the future goals of the company and it is the desire of our committee and the company that as the C.E.O. you will find the recommendations viable. Inventory Policy Inventory management practices are varied; the accounting management is similar when it comes to inventory items. In the retail business, the shelves hold inventory until the product is purchased by the consumer. “The inventory account of a firm holds the cost of a product until the cost is released to the income statement to be subtracted from (matched with) the revenue from the sale. The cost of a purchased or manufactured product is recorded as an asset and carried in the asset account until the product is sold (or becomes worthless or is lost or stolen), at which point the cost becomes an expense to be reported in the income statement. The cost of an item purchased...
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...paper is to examine the various valuation factors that affect the financial performance of a particular company. This paper also includes research which involves a current literature review about the possible causes of both positive and negative outcomes of a company’s financial performance. The methodology used is qualitative research. The major findings entail that the nature of the business and its history is the greatest factor that most likely should be the central focus of the business itself. It can then be realized that the company’s value can be best assessed once it is determined that it has stayed in the industry for a long period of time. Introduction The business industry, above all else, is considerably one of the most complicated sectors of the economy. Nonetheless, businesses are, up to the extent, concentrated on providing the best to their customers and at the same time, on performing well in the market. So to say, the primary goal of any company is to become globally competent and successful in the industry. This objective is what mostly keeps the companies driven to continuously improve itself, its processes, its products and its services. In light with all of this, the value of companies is chiefly influenced by several factors. These factors somehow contribute to the outcomes of the financial performance of the company. More than that, these aspects are deemed to be the most important that every company in the business industry always put a high regard...
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...Valuation Fundamentals Table of Contents www.finaticsonline.com Table of Contents > > > > > Introduction – Concept of Fair Value – Who uses Valuation? Valuation & Wealth Maximization Valuation Approaches Valuation Methods Is there a ‘Best’ method? > > Which method is best suited ? – Public vs Private Company – By Scenario – By Sector Valuation FAQs – General – DCF – Comparables Press Alt, W, F for maximizing viewing area Equity Valuation Fundamentals Introduction – Concept of Fair Value www.finaticsonline.com At Finatics, we define Equity Valuation as “A process that involves determining „Fair Value‟ of a company‟s equity in order to assist buy/sell decisions for the purpose of Financial or Strategic Investment ” So what is Fair Value of an investment? How should the worth of an Investment be determined ? …(Contd) Put Simply, Fair Value is the price at which, one will get the desired rate of return when the investment is sold to a willing & able buyer. The worth of an investment is determined by whether it is meant for long term use to generate returns (i.e. Strategic Investment) or for resale when the „right price‟ or „fair value‟ is achieved (Financial Investment). The purpose of Valuation is to determine a fair value range of an investment (or capital asset) using one or more of several available techniques As discussed, investment related demand will be driven by expected return resulting...
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...PLEKHANOV RUSSIAN UNIVERSITY OF ECONOMICS INTERNATIONAL BUSINESS SCHOOL COURSE WORK « Business Valuation on the basis of Damodaran model » Corporate Finance Student: Pavel Terefera Supervisor: Irina Sokolnikova Moscow 2015 Contents Introduction _____________________________________________ 3 Chapter 1. Valuation______________________________________ 4 1.1 Valuation in portfolio management_________________________ 7 1.2 Valuation in acquisition__________________________________ 10 1.3 Valuation in corporate finance_____________________________ 10 Chapter 2. Approaches to Valuation___________________________ 11 2.1 Profitable Approach_____________________________________ 12 2.1.2 Income capitalization approach __________________________ 12 2.1.3Method of discounted cash flows__________________________ 14 2.1.4 Discounted Cash Flow Valuation on example of JSC NLMK____ 20 2.2 Relative Valuation Approach______________________________ 23 Conclusion _______________________________________________ 28 Bibliography ______________________________________________ 29 Introduction. Knowing the value of an asset may not be a guarantee for success for investor, but it does help us make more informed judgments. A postulate of sound investing is that an investor does not pay more for an asset than its worth. In conditions of market economy when all transactions are made "on fear and risk" their participants, both seller...
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...invested for generating the projected growth. The concept of DCF valuation is based on the principle that the value of a business or asset is inherently based on its ability to generate cash flows for the providers of capital. To that extent, the DCF relies more on the fundamental expectations of the business than on public market factors or historical precedents, and it is a more theoretical approach relying on numerous assumptions. A DCF analysis yields the overall value of a business (i.e. enterprise value), including both debt and equity. Download DCF Analysis Template Key Components of a DCF * Free cash flow (FCF) – Cash generated by the assets of the business (tangible and intangible) available for distribution to all providers of capital. FCF is often referred to as unlevered free cash flow, as it represents cash flow available to all providers of capital and is not affected by the capital structure of the business. * Terminal value (TV) – Value at the end of the FCF projection period (horizon period). * Discount rate – The rate used to discount projected FCFs and terminal value to their present values. DCF Methodology The DCF method of valuation involves projecting FCF over the horizon period, calculating the terminal value at the end of that period, and discounting the projected FCFs and terminal value using the discount rate to arrive at the NPV of the total expected cash flows of the business or asset. Exhibit A – Advantages and Disadvantages Advantages |...
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...Indian Institute of Management Kozhikode Valuation of Brand “Coca-Cola” Project Report, Valuations and Real Options Submitted to: Professor Abhilash Nair GROUP 1, Term V 1. Harshit Boob (PGP/15/143) 2. Saurav Agarwal (PGP/15/319) 3. Siddhartha Roy (PGP/15/321) Valuation of Brand “Coca-Cola” 2012 Contents Executive Summary....................................................................................................................................... 3 COCA-COLA Company ................................................................................................................................... 4 Coca-Cola Brand ............................................................................................................................................ 6 Relevance of the Study ................................................................................................................................. 6 Why Coca-cola .............................................................................................................................................. 7 Objective of the Study .................................................................................................................................. 8 Literature Review .......................................................................................................................................... 8 Data Source .............................................................................
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...marketing, and retailing of fashionable apparels, footwear, accessories and leather goods. Bonia Group has a network of over 700 sales outlets and 70 boutiques all over the world that include countries like Singapore, Malaysia, Japan, Taiwan, China, Thailand, Myanmar, Vietnam, Indonesia, Brunei, Philippines, Kingdom of Saudi Arabia, Syria and Oman. Successful brands such as SEMBONIA and CARLO RINO was under leading label of BONIA. There are 3 share valuation methods we used to calculate the values of the company per shares, which are I. Net Assets Method of share valuation Net asset value is a method that based on the firm’s assets. Intangible assets which including goodwill should be excluded as the intangible assets include the brand name of the company which is indefinite assets. Unless there are definite assets like patents and copyrights which has limited life, then it can be include in when using this method to calculate the values of company per share as the assets can be sold. The data use to perform the valuation are also easily available as it is based on the firm, firms that have heavy tangible investments. Year | 2006 | 2007 | 2008 | 2009 | 2010 | | RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | Non-current assets | | 79,886 | | 66,240 | | 74,546 | | 88,563 | | 81,042 | Current assets | | 109,392 | | 161,017 | | 186,423 | | 156,199 | | 185,538 | Total value of assets | | 189,278 | | 227,257 | | 260,969 | | 244,762 | | 266,580...
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... Inventory Valuation Overview Learning Team B Zhra Ghavam, Rochelle Ingram, Chris Staphylaris, and Glorina Tukes QRB/501 31 January 2013 Instructor: David Libhart Inventory Valuation Overview The inventory a company holds often accounts for a significant portion of all assets with a direct correlation to the balance sheet. Inventory includes assets intended for sale, assets in production, and assets that will be used for future production of goods. A company’s ending inventory can be calculated by adding the value of any beginning inventory with net purchases then subtracting the cost of goods sold. The equivalent mathematical representation is: Ending Inventory = Beginning Inventory + Net Purchases - Cost of Goods Sold (Inventory valuation, 2010). While there are numerous industry recognized standards for a valuation of inventory, three of the most common valuation systems include First-In, First-Out – FIFO, Last-In, First-Out – LIFO and Just-In-Time – JIT valuation systems. First-In, First-Out Goods processed or received by an organization are placed in holding as First-In, First-Out; this inventory system is used to track product for use and revenue gained. In the FIFO inventory valuation system, assets or inventory received first are the first ones to...
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...GUIDE ON VALUATION OF TECHNOLOGY Guide on Valuation of Technology TABLE OF CONTENTS 1.0 INTRODUCTION 1.1 1.2 1.3 1.4 DEFINITION OF TECHNOLOGY ROLE OF TECHNOLOGY OPEN INNOVATION STRATEGIC ALLIANCES 3 3 3 3 4 2.0 VALUATION OF TECHNOLOGY 5 3.0 VALUATION METHODS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 TWENTY-FIVE PERCENT (25%) RULE INCOME TECHNIQUE MARKET APPROACH COST METHOD RELIEF FROM ROYALTY TECHNOLOGY FACTOR APPROACH CAPITALIZATION APPROACH REAL OPTIONS METHOD 5 6 6 7 7 9 10 11 12 4.0 RISKS FACTORS AFFERCTING VALUATION OF TECHNOLOGY/ IP 4.1 4.2 INTERNAL FACTORS EXTERNAL FACTORS 14 14 15 5.0 APPENDIX WORKED EXAMPLES 16 16 2 Guide on Valuation of Technology GUIDE ON VALUATION OF TECHNOLOGY 1.0 INTRODUCTION 1.1 Definition of Technology Technology is the technical means people and by extension countries use to improve their surroundings. It is about the knowledge of using tools and machines to do tasks more efficiently. Technology is about people utilizing a combination of knowledge, tools and systems to control the world we live in, improve our ability to work better and to make life easier. In the context of this guide, technology can be in the form of intellectual property (IP), patents, inventions, licenses, know-how, trade secrets etc. 1.2 Role of Technology With the advent of globalization and the opening up of international markets, the critical role of technology as a driver of economic growth and providing...
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...Valuation of Intellectual Property: Approaches We have moved into an information age characterized by increasing competition and shorter product life cycles; companies are more dependent on their intellectual properties (IP), as it has being recognized as a Valuable Business Asset. The Value of IP is much different & Valuation is much difficult than the value of any other assets. IP is creation of Human mind but to know the value or to trade that property we have to “value” them. The three main approaches are Market Approach, Income Approach & Cost Approach. Introduction Business enterprise is comprised of Working Capital, Fixed Assets, Intangible Assets and Intellectual Property. The increasing challenges of corporate world everyone wants to earn competitive advantages over others resulting into more dependence on Intellectual Property . Intangible assets Working Business Fixed Capital Enterprise Assets Intellectual Property According to economic theory, the value of an asset is best determined by the market, in the form of a transaction between two unrelated entities dealing at arm’s length. Unfortunately, intangible assets and IP that will eventually support products seldom benefit from open market conditions, either due to novelty or secrecy factors. In consideration of the growing investments required to develop and market products, there is a growing need for assessing the economic value of...
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...$105mm Valuation Allowance * Sundance Tax Related Balances as of Acquisition Date * $200mm Deferred Tax Asset * $200mm Valuation Allowance * Acquisition Date Decisions * Remove LOL Valuation Allowance of $105mm * Remove $150mm Valuation Allowance from Sundance books * Subsequent Information as of December 31, 2012 * Sundanced Valuation Allowance is unnecessary ($50mm) Guidance Summary: * Both IAS 12 and ASC 740 “require income taxes to be accounted for using an asset and liability approach that recognizes current tax effects and expected future tax consequences of events that have been recognized for financial or tax reporting (i.e., deferred taxes) each period.” * The overall approaches are similar, but there are several significant differences * in the treatment of uncertain tax positions, * deferred tax assets and the related valuation allowances, * offsetting and classification, * deferred tax effects on outside basis of investments, and * disclosures. | ASC740 | IAS12 | Recognition | More likely than not | Probable | Calculation | Enacted tax rates must be used | Enacted or ―substantively enacted‖ tax rates as of the balance sheet date must be used. | Classification / Presentation | Current or non-current classification, based on the nature of the related asset or liability, is required. | All amounts classified as non-current in the balance sheet. | Valuation Allowance...
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...Professor Gilles Business Valuation Report The Business Valuation report will discuss how these companies compare and which companies are performing. The report will give and in depth analysis for the financial forecasting and the business valuation models. The four companies Alex and Ani, I.T. source, Mastero technologies, and Veteran Corps of America. The first company Alex an Ani cost of capital and the weighted average for the cost of equity and the cost of debt for each corporation. The cost of capital rate should be used as the discount rate for present value (PV) of the free cash flow (FCF) and terminal value (TV) of the business.The business valuation calculation for Alex an Ani show that the company is profitable and estimates for the company include the present value of the free cash flow (FCF) from the 5-year revenue and earnings forecast and the present value of the terminal value (TV) based on the free cash flow (FCF) in the fifth year using the cost of capital. The combination of present values from discounted cash flows and discounted terminal values would represent the total business values for each of the four privately-held corporation.While this valuation was generated considering as many company, industry and location specific details as available, the value presented in this report is an automated estimation of the assets and liabilities. Some events and circumstances that might impact the overall valuation of a specific business Alex and Ani may...
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...strengths and weaknesses of decision. Out of the nine comparable companies given for DSH's relative valuation, five have been selected to be in the analysis for relative valuation for their similarities in business operations and risk profiles. These five companies are JB Hi-Fi Limited (JBH), Harvey Norman Holdings Ltd. (HVN), GOME Electrical Appliances Holding Limited (GMELY), Dixons Retail PLC (DXNS) and Hikari Tsushin, Inc. Strengths of decision Business operations: Only companies which operates its business relatively similar to DSH's have been taken selected in this relative valuation. DSH is a major retailer of consumer electronics for offices, mobility and entertainment products. Out of nine comparable companies given, only Myer Holdings Limited (MYR) and Game Stop Corp. (GME) were identified not to be similar to DSH, GME primarily sells products related to electronic games and MYR retails a wide range of merchandise including apparels, cosmetics, electronics and furniture. This suggests that MYR and GME would not be ideal as DSH's comparable companies on the basis that they are exposed to different operating risks from DSH. Furthermore, all 5 selected firms operate on omni-channels of distribution and have very similar products and services with essentially the same target market in their countries of operation, making it ideal to be used in this relative valuation of DSH. Weaknesses of decision Market Capitalisation: The main weakness is having the size of selected...
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...last in and first out. LIFO is a valuation method of inventory. The other valuation methods of inventory is FIFO, which stands for first in and first out and weighted average. FIFO is a popular valuation method along with LIFO. LIFO has its advantages and disadvantages. The advantages of LIFO is that current product is measure along with its current revenues. The current market prices are matched up with current revenues. As for FIFO the older costs is matched with the recent revenues, which understates the profit. As for the LIFO it’s a great measurement of current profit and it understates the cost of goods sold, which more of a profit is created. History LIFO is the valuation of inventory. Well the word inventory deprived from England. LIFO was the first inventory valuation method to be used. The idea of LIFO was to match up current costs with the current revenues. In 1918 LIFO was first discussed in The Revenue Act during World War I. America discussed that LIFO shouldn’t be change and should remained the same as England described LIFO. In the early 1930’s the LIFO talk started to progress. In 1936 Board of Directors of American Petroleum Institute recommended that companies should use the inventory valuation of LIFO. The board of directors described that LIFO was way to describe the profit of the sales from the actual raw materials. Current Issue The current issue of LIFO accounting is that the valuation method is manipulating. Its manipulating...
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