1. Did Interbrew add value to SUN brewing? How? The Khemka family is evaluating multiple scenarios to decide what future action they want to proceed with in regards to their stake in SUN Interbrew. The Khemka family has identified their options and we are providing a discounted cash flow analysis to bestow insight as to what option is best. The income and cash flow projections as well as the balance sheet for Sun Interbrew (found in Exhibits 1 and 2, respectively) were used as a base for calculations. The assumptions necessary to evaluate the company are detailed in Exhibit 3 and are stated below for simplicity. The revenue growth was assumed to be 14.7% and the discount rate and expense growth rate to be 12% and 0% …show more content…
The assets, which consisted of two additional breweries, aided in achieving economies of scale. Additionally, the location of the assets expanded regional coverage in the burgeoning Russian market. When combined with SUN Brewing’s management talent, the joint venture experienced significant growth in both market share and overall revenues. In turn, this growth led to the acquisition of two additional breweries, bringing the total to nine in the country. Lastly (and probably most importantly), Interbrew provided SUN with economic cover during the NATO bombing of Serbia and Montenegro. Investors are notoriously reluctant to invest precious and scarce capital resources in unstable regions. What mustn’t be lost is the significance of the role that Russia played in protesting the NATO’s presence and influence in the region. The fact that they (Russia) were holding a position contrary to an organization that constitutes 70% of the world’s defense spending is more than enough reason to give any investor pause. SUN benefitted tremendously from the stable foundation Interbrew was able to provide during that turbulent time. 2. What was SUN Interbrew’s Total Enterprise Value as of July 31st, 2004? Using a 12% discount rate, the Total Enterprise Value of Sun Interbrew was calculated st to be $3.05 billion as July 31 , 2004. This
The lifetime value of a typical customer in each segment when the discount rate is 15%.
It appeared that they now had the power to defeat in a war against major European nations such as Russia and became a new threat. In the meantime, Russia finds itself in a time of reconstruction, trying to avoid any type of anarchy. The changing times for Russia left them vulnerable to invasions.
The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.
3. Using the cash flow indicator and investment valuation ratios, discuss which company is more likely to have satisfied stockholders.
It massive forests and frozen tundra’s have picturesque views that would astound anyone. The country has a land surface area of 6,592,735 square miles, making the largest country by land comparably to the world. Since Russia is the biggest country in the world, it has every landscape imaginable. From Lake Baikal, the biggest lake in Europe, to the Ryn desert, and the cold Siberian forests. Russia has it all when it comes to land geography. The northern part of Russia concealed with the Arctic Ocean, which is froze for the majority of the year. To the west the only way Russia has access to the Atlantic Ocean is through the Black Sea, and then through the Mediterranean Sea. Another way to access the Atlantic Ocean is through the Baltic Sea or through the Barents Sea, which is only operable in the summer, since in the winter everything over the 60-degree latitude line turns into ice. Even though Russia can access the Atlantic Ocean through the sea when you look at a map, there is two more non-geographic obstacles. The first one is that countries that are around the sea, for example, Turkey, and Denmark, which are part of North Atlantic Treaty Organization (NATO), can deny or make it hard for Russia to use those routes. NATO’s purpose is to pledge the liberty and safety of its members through military and political methods. In other words, if one NATO country takes a conflict with a non-member of NATO, then all
— Due diligence: extensive research and analysis is done on the company and in the market it operates in
An assessment of the company’s financial statements will highlight the firm’s management of its risk and opportunities.
You would not buy a home, car or other large purchases without researching what product offered you the most for your money. The same is true when investing in a company. Investors do avid research on multiple companies to find what company matches the investors' criteria. In this paper Team C will research both AT&T and Verizon's financial documents. Team C will compare selected ratios, cash flow and make recommendations how both companies can manage cash flow for the future.
• Valuation of the company—application of sophisticated quantitative valuation models, IRR, net present value and forecast of future cash flows.
a. The financial statements I would use are the Balance Sheets, Income Statements, Cash Flow Statements, and Shareholders Equity Statements from the last 2-5 years. In order to better assess the company it would be advantageous to understand the company’s business, industry and their competitors. In addition, to assist in the assessment of the company, it would be helpful to have financial ratios of the company’s competitors and the industry, too.
In 2014, Russia captured the Crimea and Sevastopol, and unfurled tens of thousands of troops near Ukraine border. This is where the conflict flashed between pro-Russian separatists and the new government in Kiev. Russia's actions, including reported military aid for separatist troops, mark a serious major threat to generally accepted principles of world order, such as, sovereignty and
Complete an income statement, balance sheet and statement of cash flows for 2011. Please provide information on any assumptions you make not already stated in the case.
You would not buy a home, car or other large purchases without researching what product offered you the most for your money. The same is true when investing in a company. Investors do avid research on multiple companies to find what company matches the investors' criteria. In this paper Team C will research both AT&T and Verizon's financial documents. Team C will compare selected ratios, cash flow and make recommendations how both companies can manage cash flow for the future.
5. A complete analysis of the company’s financial statements for a minimum of the most recent three years of available data including a comparison of the company's ratios to most recent year’s peer company average ratios. Complete the ratio calculations yourself. Do not copy them from another source.
The group project, Macmillan and Grunski Consulting, consists of two sections. The first part explains the case about discounted cash flow analysis, by answering the given nine questions. The second part discusses the retirement planning.