Introduction
The purpose of this report is to analyse the two public companies, Invigor Group Limited (IVO) and ANSYS, through the use of equity valuation techniques to evaluate whether an investor should invest in either, one or both of the companies. There are two main equity valuation techniques that can be used - the free cash flow (FCF) model and the residual income model (RIM) - however, this report will only examine one model in detail, and explain why one model was chosen over the other. With the volatility in the market and the unforeseen circumstances of each company’s future, we will be justifying our assumptions in our analysis to enhance our accuracy. This report will also examine the background of each company, and forecast
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It specialises in innovative business intelligence, big data solutions for businesses and consumers which are supported by strategic consulting, development and marketing services.”
Invigor Group Limited is an Australia-based information technology and digital solutions company. Founded in 1998, the company specialises in developing innovative digital technologies and data analytical softwares in relation to online advertising, website design and the development of mobile applications. In other words, it specialises in developing websites, mobile applications and softwares (different platforms) to track, analyse and deconstruct online consumer behaviour, activity and trends. This allows businesses to analyse strengths, weaknesses and demand gaps by better understanding trending consumer interests and tastes, insight about product and sales activity, consumer opinions/reviews of products and much more. The company has been developing consumer-based online websites for the past 15 years, including:
GetPrice - an online (retail) price comparison site for consumers
Menulog - an online take-away and food delivery website that provides you with all the different options (cuisines) available from local places that deliver food - very unique, because consumers always like to try out new, different types of food - and Menulog provides you with a list of all the possible cuisines within your area, and rates businesses based on speed, ratings
We use Capital Asset Pricing Model (CAPM) approach to calculate the cost of equity. The formula of CAPM is re = rf + β × (E[RMkt] – rf).
The questions that follow and the article Comparing the Accuracy and Explainability of Dividend, Free Cash Flow, and Abnormal Earnings Equity Value Estimates will inform your completion of Milestone Three. An understanding of the models in this assignment will assist you in hypothesizing the incremental impact of a new investment project for the company. The understanding of these models will contribute to your ability to look toward the future when considering the direction of an organization. This activity is worth a total of 75 points. See the distribution of points listed before each question.
Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 - Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due
Describe briefly the company. What it does? Who are its customers and markets (in general terms)?
This case attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and the issues surrounding such, as well as the Black-Scholes
If the market value of a stock is lower than its intrinsic value, this stock is defined as “trades at a discount”. To figure out whether AGI stock is traded at a discount to comparable companies, as its management believed, we can simply apply multiple which comes from the average multiple of its comparable companies. Considering fluctuation of future after-tax earnings caused by the change in capital structure, we prefer to use TEV/EBITDA multiple in this case. Amtelecom Group consists of two lines of business which has to been taken into consideration. We separately calculate the value of both companies and their
This Corporate Finance paper focuses on analyzing the challenges that Northampton Group Inc. (NGI) is facing as it tries to increase shareholder value. In the case study it is stated by the firm’s major shareholders, that they believe NGI is currently undervalued. In connection with this, the management of NGI is considering several means of increasing the shareholders value. Due to difficult economic conditions resulting from the Global Economic Crisis, there are both
We valued the company using four different methods; Net Present Value, Internal Rate of Return, Modified Internal Rate of Return and Profitability Index. We began with the Net Present Value, or NPV, calculation. NPV values an investment’s profitability based on the projected future cash inflows and outflows of the investment, discounted back to present value using the WACC. The calculations for NPV are presented in Appendix 2. We started by separating cash inflows and outflows by each year. We used Bob Prescott’s estimates for the revenue per year and related operating costs of cost of goods sold as
These factors were set as a qualitative base that has driven the company’s performance, stability and growth. We facilitated our valuation of GMA through key drivers in the form of financial ratios and methodologies involving the forecasting of discounted cash flow model through derivation of cost of equity (re) from the Capital Asset Pricing Model (CAPM). Cost of Capital has been derived through Weighted Cost of Capital (WACC) method and Net Present Value has been derived. Basis the NPV analysis, we arrived upon three possible scenarios of growth (best, baseline and worst) as mentioned below.
Finally, we come up with the value for the operating after-tax operating cash flows for the next three years and the terminal value. We calculate the present value of these cash flows by discounting by the unlevered cost of capital, rU given as 8.7%, which gives us a value of the unlevered firm of ca. $566m.
In an uber globalized market of today, companies are faced with challenges in each and every step of their business. Our analytics and research services are geared towards giving those companies that extra edge over the competition. We process and analyze terabytes of data and break down all the fuzz and chatter around it to give our customers meaningful insights about their competition and the market they are engaged in.
The company’s vision is to make smarter lives possible. it wants to use four major areas of information and communications technologies (ICT) - content creation, information processing, cloud data management, and network transmission, and to catalyze development and changing the way we communicate with each other and making human interaction through technology more natural.
Our mission is to help each client’s business, to reach our goal, our purpose and make every business man happy with our best products. We have the best possible worldwide. We had people working to our company to the highest of any company in the world. We guarantee that every Client that comes into play is happy with our product they use. We assure you your beauty and ease of work is our wish. That’s why we are providing software that is integrating all CRM, Accounting, Marketing and Shipment categories in one product on the lowest prices comparing with any Cloud
Our company is a leading consulting firm in the various industries, especially in the technology industry. The members in our team are experts in corporate strategy and have worked with plenty of clients from the software industry to services. We can bring real world experience to the table and provide invaluable prospective regardless of your current stage of business development.
In every long term strategic planning, many companies considered data collection and analysis as a fundamental activity. Big companies that strive to achieve a sustainable advantage over their competition made use of information management system to help them analyze their data. These activities have evolved to what is now known as business intelligence of BI.