Investment and Performance Analysis Assignment -
The assessment for the module is in two parts:
Part 1, involves the use of 'top-down' analysis and intrinsic valuation techniques to assess the future potential of investing in the shares of a chosen company. Your investment choice should focus on contributing to a portfolio with 'growth' as its principal objective.
Part 2, involves assessing the performance of the same company using ROCE, EVA & SVA.
Part 1 Assessment - Equity Valuation
a) Provide a detailed evaluation of an equity investment decision in the current economic climate. Your briefing should include:
i) A review of the 'top-down' analysis that led to the focus on a particular company. A rational for considering particular economies, industries and companies from within those industries should be provided.
ii) A fully explained / justified calculation of the current intrinsic value of the company - established using at least one DCF technique and one relative valuation technique (all figures employed including growth projections to be explained / justified and performance comparisons within industries and / or between countries explained. N.B. illustrative examples used in the lectures / workshops should not be used).
iii) As the methods employed in ii) above are likely to result in different valuations, you are required to provide an academic justification of the valuation method(s) you will rely upon.
Totals for Part 1 - 2,000 words.
Part 2 Assessment - Company Performance Evaluation
a) Present an evaluation of the current performance of your chosen company using ROCE, RI, EVA and SVA. (All figures employed should be up to date, i.e. include the latest published financial statement, clearly explained / justified and any performance comparisons within industries and / or between countries explained).
In regard to EVA the following key adjustments should be considered with omissions being justified.
Non-cash expense e.g. Goodwill
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Provisions such as bad debts
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Interest on Debt
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R&D charges
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Accounting Depreciation
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Economic Depreciation
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Costs relating to non-capitalised Leases
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Profit / income from marketable securities
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Unusual gains or losses (-/+)
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+ Restructuring charges/profits
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+ Minority shareholder interests - share of profit
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Deferred tax charges
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Tax provision for year
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Actual tax paid
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a) Critically evaluate the usefulness of ROCE, EVA and SVA in assessing company performance. Note: you must make reference to journal articles in this section and reflect on your own experiences of using these techniques.
Totals for Part 2 - 1,500 words.
Attachment:- Investment & Performance Analysis Assignment Files.rar