...2 Graduate Thesis By Teia R. Merring Copenhagen Business School Strategic and financial analysis and valuation of B&O 0 1 Executive Summary................................................................................2 Introduction............................................................................................6 1.1Motivation.................................................................................................................. 6 1.2Problem Specification................................................................................................ 8 1.3Problem Identification................................................................................................ 8 1.4Problem Handling .................................................................................................... 10 1.5Structure and Methodology...................................................................................... 12 1.5.1Introduction and Presentation........................................................................... 12 1.5.2Strategic Analysis............................................................................................. 12 1.5.3Financial Statement Analysis ........................................................................... 13 1.5.4Prognoses and Budgets..................................................................................... 14 1.5.5Valuation.......................................
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...three years and also shows the forecast of the company for financial year 2012. This would help investors and researchers to decide on investing to SWM or not. SWM has been analyzed step by step in order to find out its true value in the industry. The analysts have first looked into SWM business and strategy where it has been noted that SWM was a result of merger of seven group holdings and Australian West Newspaper in order to expand and use their resources efficiently. Secondly, SWM accounting policies and procedures have been analyzed where they showed that the company is following the accounting standards and using their flexibility that was given by the standard in order to measure some accounts in the financial statement. This flexibility was compared to the industry where it has noted that the company is valuing these accounts in a proper way. Thirdly, a financial analysis was also undertaken. It has been understood that the company, though there was a merger, is managing their resources well that resulted to positive book and cash returns. Lastly, the forecasts of the said company, where the analyst has determined the company’s value and the full set of financial statement for 2012, were estimated and calculated intelligently. With the help of the four steps of business analysis, the group has recommended that it is safe to invest to seven west media even if merger has occurred twice in the last three financial year. I. INTRODUCTION In order for a business...
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...Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Financial analysis may determine if a business will: Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital; Make other decisions that allow management to make an informed selection on various alternatives in the conduct of its business. Contents [hide] 1 Goals 2 Method 3 See also 4 Notes 5 External links Goals[edit] Financial analysts often assess the following elements of a firm: 1. Profitability - its ability to earn income and sustain growth in both the short- and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency - its ability to pay its obligation to creditors and other third parties in...
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...Financial Analysis Tools Nicola Maclin American Military University Managers should have the ability to assess performance of decisions they have made or intend to make, through structured and robust financial analysis. Managers need tools to forecast or predict as they struggle to make decisions on a daily basis to execute business strategy for the company. Financial analysis tools can drive projections and predictions in many areas of the business, from planning for production and distribution to decisions on a product or service. Managers can use these tools to both assess and improve business performance. Performance evaluation is an important component of managing a business. Managers need feedback to evaluate how well they have accomplished business strategy and managed key business process. Managers need to be able to link strategy with profitability. Financial analysis tools can help provide that much needed feedback. Financial data can be used to compute ratios analysis. These financial ratios gives managers the first look at the company’s vital signs and is used to assess a complete financial health and identify operational problems. Ratio analysis allows management to quickly and efficiently address concerns like: return on capital investment and the company’s profit margin. Ratio analysis can be an effective and useful management tool if ratios are calculated on items that are meaningful and where practical steps can be taken to make improvements in...
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...Financial analysis Accountancy Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital; Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business. Financial analysts often assess the firm's: 1. Profitability -its ability to earn income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term; 3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations; Both 2 and 3 are based on the company's...
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...Weeks 13 and 14 (4/21-5/1): Lease Financing and Course Conclusion Yikes! We are at the bittersweet time in our course together. It is almost over. We’ll miss it so much, but we might also want to do something else with the rest of our lives. In these last 1.7 weeks, we’ll cover another topic which, in addition to Financial Analysis and Planning, serves the function of integrating much of the material we have covered. That topic is Lease Financing. There is a lot of material on the structure of the lease and on the accounting treatment of leases, but the analytical focus will be on the lease-buy decision. The lease-buy decision is actually a financing decision. The analysis of the advisability of a lease typically follows a prior decision to acquire an asset (based on an investment decision analysis). In lease analyses we are comparing lease financing (which is a type of debt) to “regular” debt financing. Video 20 and Chapter 25 in BMA are the main materials. As you review the video, work through the lease example in the Excel file (financing uma 13.xlsx). Toward the end of video 20 is described the concept of adjusted present value. Pay close attention to this material as well, because it describes how in some very specific cases the results of an investment decision and a financing decision must be considered together. The deliverable for this two-week period is Exercise 4, which is an individual, i.e., not a team, exercise. We’ll also use the time to review...
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...its components 8 Economic Analysis 8 Recommendation 9 Executive Summary In 1999, the CEO of Companhia Cervejaria Brahama (largest brewer in Brazil) was considering the bit for Antarctica (second largest brewer in Brazil). The purpose for this merger was to exploit the potential synergies and avail the economies of scale. The secondary motive was to raise the barriers to entry to the industry especially for the multinational firms. For the purpose of acquisition, the valuation for both of the companies needs to be done in the analysis supported by the calculations. The impact of merger and the rise of potential synergies to be evaluated to estimate the overall benefits of the deal. Moreover, the mode of transaction also need to be considered. As both of the companies are large in nature and dominate the industry, all the related factors before the acquisition need to be considered. In issue in the case mainly highlights the valuation of the Antarctica, the company that would be acquired by Brahama, another beer company. The management is concerned about the pros and cons of the mergers and acquisition and also worried about the method to acquire the company. There are several options that could be used by Brahama to acquire Antarctica. The options mainly includes cash transaction and share-to-share transaction. The management of both companies is also considering the shareholders reaction towards the acquisition of these two. The analysis would be made to find out the...
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...9-193-029 REV: SEPTEMBER 13, 2004 WILLIAM BRUNS Introduction to Financial Ratios and Financial Statement Analysis There is almost always a reason why someone picks up an organization’s financial statements and begins to analyze them. Lenders or creditors may be interested in determining whether they will be repaid money they have lent or may lend to the organization. Investors may be interested in comparing a potential investment in one organization with that of another. Employees may want to compare the current performance or financial status of their employer with earlier periods. Regulatory agencies often need to assess organizational or industry financial health and performance. Financial analysis is always based on a set of questions, and the specific questions requiring answers depend on who the financial statement user is and the reasons for his or her analysis. Financial analyses based on accounting information consistently involve comparisons. Amounts or ratios may be compared with industry norms, the same measurement in a prior period, the same measurement in a competitor’s organization, or with planned and budgeted amounts previously established. Figuring out which comparisons will best answer the questions motivating the analysis is one of the necessary steps in making the best use of accounting information. Financial ratios can help describe the financial condition of an organization, the efficiency of its activities, its comparable profitability...
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...FINANCIAL STATEMENT ANALYSIS: A TOOL FOR PERFORMANCE EVALUATION A Case Study of Oceanic Bank By IBRAHIM UMAR PGA/09/07766 M.Sc. Assignment Submitted to Dr. M.I. Kida CNA Department of Accountancy University of Maiduguri 2Financial Statement Analysis: A Tool for Performance Evaluation Jan. 2010 3Financial Statement Analysis: A Tool for Performance Evaluation ABSTRACT Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, trend analysis and ratios analysis. This study intends to analyze financial statement of Oceanic bank in Nigeria in order to come up with an in-depth fact finding on its performance and to see if there is any connection between the recent global economic crisis and its overall performance. 4Financial Statement Analysis: A Tool for Performance Evaluation INTRODUCTION 1.1 Background Financial statement represents...
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...What is the primary objective of financial statement analysis? The primary objective of financial statement analysis, according to the text, is to assist an investor or leader in determining the fundamental value of the firm. (Brigham & Ehrhardt, 2014) The analysis involves comparing a firm’s performance to that of other firms in the same industry, and also evaluating trends in the firm’s own financial position over time. 2. How are ratios used in financial statement analysis? Provide an example. Ratios are designed to extract important information that might not be obvious at a first glance over the firm’s financial statements. (Brigham & Ehrhardt, 2014) For example, one company may be $5 Million in debt while another is $50 Million in debt. It is impossible without further information to say which company is in a stronger financial position. This further information comes from standardizing each firm’s debt in relation to its assets, earnings, and interest. This standardization is done through ratio analysis. 3. Review the 3 basic financial statements, pretend you are an investor and you have $100,000 you must invest. You can only invest in 1 company, and you can only view one financial statement. Which statement would you choose to look at and why? I would ask to see the statement of cash flows if I could only view one financial statement, because I feel it would give the best view of the current state of the firm’s financial health. Since I can’t compare statements...
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...Financial Analysis – Week Five Final Assignment ACC 205 Principles of Accounting I July 4, 2000 Financial Analysis As an introduction, financial analysis provides an opportunity to make informed decisions about the health and viability of the company under review. The analysis can be done in several ways, but most commonly the business activities of a particular entity are compared internally from one year to the next. Similarly, the company is compared to an external but similar company in the same industry. Alternatively, one could also compare the activity of the company under review with that of an industry average of similar companies. The various financial analysis techniques used by accountants and analysts are all designed to provide the best possible estimate of financial viability of a company on a go forward basis. The company selected for this project is a publicly held healthcare corporation based in Boca Raton, Florida and named Cross Country Healthcare. As an overview, the company is comprised of three segments: contingent nurse and allied healthcare provider staffing, physician staffing, and other human capital management services, the latter of which provides education and training programs to the healthcare industry, as well as retained search services for physicians and healthcare executives in the United States. Competitors of Cross Country Healthcare would be companies similar to Staff Care, Maxim, Delta Staffing, Onyx MD, and others...
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...Cango Financial CanGo Financial Analysis Report The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company. The investment ratios can be broken down into 4 key areas, efficiency, financial leverage, liquidity and profitability. Starting with efficiency, we have the inventory turnover and receivables turnover ratios. The inventory turnover ratio indicates how many times the company is able to turnover its inventory. In CanGo’s case, the ratio value is low, meaning that it is not effectively turning over its inventory, which also means it isn’t quickly and effectively...
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...Running head: FINANCIAL ANALYSIS OF TARGET & J.C. PENNY Financial Analysis of Target & J.C. Penny Linda S. Mosquera Columbia College University Abstract There are two companies which stand out as being optimal candidates for selling out to CB&M. I collected each company’s financial statements and analyzed five years’ worth of data provided via the company’s annual reports specifically pertaining to the balance sheet and the income statements. Interpreting a few specific financial ratios, I will provide an in-depth analysis in determining which of the two companies is healthier financially. Introduction Financial ratios are classified according to the information they provide. Some of the frequent used ratios are: liquidity ratios, P/E ratio and profitability ratios. I will provide an in-depth analysis in determining which of the two companies is healthier financially. Liquidity Ratios Target J. C. Penny J. C. Penny is a chain of mid-range department stores based out of Plano, Texas. It was started by James Cash Penney under the initial partnership with Thomas Callahan and Guy Johnson, who owned dry goods stores called Golden Rule (J.C. Penny). Penney took ownership of the store around 1907 when Callahan and Johnson dissolved their partnership. “It currently operates “approximately 1,100 stores and at jcpenney.com, customers will discover a broad assortment of national, private and exclusive brands to fit all shapes, sizes, colors and wallets”...
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...Financial Data Analysis Jesse Patacsil HCS 577 June 29, 2012 Financial Data Analysis Financial data analysis is the procedure for assessing budgets and other finance-related things to determine the sustainability of a business venture. A financial analysis is used to analyze whether a unit is constant, solvent, liquid, or profitable enough to be invested in by shareholders. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and statement of revenue and expenses statements. In addition, one key area of financial analysis involves comparing the company's past year performance into an estimate of the company's future performance.(Stock Analysis, 2912) On the Balance sheet the patient accounts receivable had a larger allowance for bad debts on the audited version. There was $1,000,000 more in the allowance for bad debts (or doubtful accounts) in the audited version of the financial statements (Patton-Fuller Community Hospital, 2009). This means that the hospital most likely will not collect on this patient accounts receivable and has classified it as a bad debt so it is estimated to result in a loss. The management uses historical data to estimate bad debt but new agreements with managed care payers required an adjustment to the expense and allowance during the audit (Patton-Fuller Community Hospital, 2009). This also decreases the total assets by $1,000,000 in the audited version of the balance sheet...
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...Student Number: 10314497 Course Title: MBA (Finance Stream) Lecturer Name: Enda Murphy Module/Subject Code: B9AC106 Module/Subject Title: Financial Analysis Assignment Title: Analysis of Financial Statements No of Words: 3418 (Excluding Citation, Bibliography, Table of Content and Charts) Date of Submission: 12 November, 2015 Table of Content Introduction..............................................................................................................................3 Ratio Analysis of Tata Motors..................................................................................................5 Profitability Ratio.....................................................................................................................5 Gross Profit Margin..................................................................................................................6 Net Profit Margin/Profit for the year (after tax).......................................................................7 Profit before Tax (PBT) Margin................................................................................................8 Return on Equity.......................................................................................................................9 Efficiency Ratio.........................................................................................................................9 Average Receivable Collection Days....................
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