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Business Valuation Assignment – U21098 The assignment comprises 40% of the assessment for U21098 Corporate Finance and Valuation Unit. Required Select a company from FTSE AIM All-Share constituents. You will be required to apply two different valuation techniques. You will prepare an investment valuation report in which you will critically evaluate, analyze, discuss and comment upon the key issues in the valuation of your selected company. Capital IQ and Bloomberg must be used to source financial information on the chosen company. Contact me via email or phone when the company has been chosen. I have uploaded several files to go along with these instructions such as the assignement brief and a list of the IMPORTANT: The company chosen must be a FTSE AIM All-Share constituent from the UK. The list is below Use accurate academic journals articles to source relevant information as well. Journal articals need the links in the reference list. Between 10 – 20 relevant sources need to be used and put in a reference list at the end of the coursework. The report will explicitly address the following matters: 1. An analysis of the current business and financial situation of your company. A discussion and analysis of your forecast of the company’s future expected economic benefits stream. (30%) 2. An appraisal and assessment of the appropriate weighted average cost of capital to be applied in the valuation. (5%) 3.
A quantitative assessment of value using a discounted cash flow methodology and a relative valuation approach. o An appraisal and discussion of the key assumptions contained within the valuation and a sensitivity analysis showing how value might change given a range of appropriate assumptions. o A brief critical evaluation of the methodologies applied, analyzing issues which in this specific valuation may impact upon the propriety of the value conclusion. (40%) 4. A conclusion of value compared to market, with an opinion on value per share and based on this a recommendation on whether the company is a suitable investment. (15%) Further explain Part 1 – Financial analysis – All financial ratios used such as efficiency ratios, acid and quick test ratio need to calculated and used to compare and value chosen company. Part 2 – Discounted cash flow calculations such as dividend cash flow and free cash flow comparing the three cash flow methods in detail and what they say. Part 3 – Relative valuation calculation needs to be worked out and comparison test and comments Why good and why bad? Critical method and analysis and again comment/justification Which relative valuation method should be used and why? Part 4 – WACC (weighted average cost of capital) needs to be calculated and commented upon. Why we use it to value the company and what it shows us. Conclusion 10% will be awarded for presentation (this will include structure, clarity and use of grammar). The report will be assessed and marked on the level of considered and knowledgeable discussion of the appraisal of value, not on a ‘right’ value. The body of the work should not exceed 2,000 words (excluding references) but you may add to that additional information in the form of appendices and tables. Capital IQ and Bloomberg must be used to source financial information on the chosen company. Contact me via email or phone when the company has been chosen. IMPORTANT: The company chosen must be a FTSE AIM All-Share constituent. Use the link to find the FTSE AIM All-Share constituents list – https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/indices/summary/summary-indicesconstituents.html?index=AXX&page=1&ord=name&mod=up&ord=code&mod=up