Valuation of 3M Valuation thesis: On recovery in the Electronics, Healthcare, and Industrial

Threat from New Entrants There are currently no new threats from new entrants in this market. Company G’s technology, testing and production process that is very efficient for profitability cannot be easily replicated.

We evaluated our company’s position in the industry, and found ourselves in an excellent starting position to further develop our products and match them to the industry’s needs. Our market share is adequate and we can advance further with our strategy improve and reposition our products in the coming years. We have underutilized capacity, which we intend to improve, while increasing automation to reduce costs. We have plans to improve our promotion to improve product awareness and with the appropriate product lines we will increase price to improve margins and better align our high-end product image. Our current financial position is optimistic, showing our leverage (Assets/Equity) at 2.0, when our goal is to maintain 1.5-2.0 overall. By utilizing the analysis tools we are learning what elements are driving demand, how to effectively tailor our products through R&D, how best to adjust our marketing and pricing, while lowering input costs, in order to improve margins and to ensure our stakeholders are all satisfied.

ADM’s competitive advantage is the fact that it is able to reduce fixed cost by large scale production, known as economies of scale. The company has manufacturing, distribution, and sales facilities located in the U.S., Canada, Africa, Europe, Asia, and Latin America. Since ADM has all of these locations around the world, it has the capacity and capability to produce its products in massive quantities. Cost per unit is lowered by spreading fixed costs across a larger product base and this allows ADM to be price competitive within the industry.

The company’s net profit has been growing over the past 3 years; it seems to have a stable, increasing trend. This could be a result of technological advancements within the cellular phone, television, and Internet industries; the endeavors of their competitors; Bell’s charitable efforts; as well as their expanding business.

Art Marks should vote to make an investment in Telco Exchange because the company possesses many of the components which could make it a potential 67 million dollar company (from our valuation by DCF method using WACC -Appendix A). Telco has a product that solves large company high cost issues revolving around telecom equipment and telecom services (makes around $250,000 per software licensing deal). They have been profitable in 2002 and the potential to have a revenue of a 50 million annual revenue in four years time. They have

Product Innovation – Innovation of new products had failed many times and MTI has lost reputation with Wall Street. This process had been placed on the backburner and when the CEO came on board there were only six products in the pipeline. Therefore, to be successful in the future, MTI needs to invest more in R&D and focus on delivering new products.

This aggressive spending minimizes the company’s cash on hand and indicates that while AMT is generating cash, their cash outflows are greater than their cash inflows. Mr. Haskin’s belief for the future growth potential of AMT is indicative of the fact that spending of R&D was necessary. But it may be that the excessive spending is why AMT reports negative earnings (shown below) from -9.8% in 83’ to -43.8% in 85’, resulting in inefficient use of its cash.

During this time, sales increased from: $7.11 billion in 2010 to $7.99 billion in 2012. Earnings improved from $2.84 to $3.57. While the total amount of dividends rose from $1.00 to $1.72. These figures are showing how the company has been continually increasing sales, earnings and dividends over the last three years. In the future, the management predicts that their current strategy will increase returns. As, executives believe that their focus on building the brand and accounting for costs will lead to net earnings of $5.20 to $7.19 annually by

However, RLK’s competitors are downsizing and outsourcing R&D and exploiting on the cost advantages. If RLK decides to invest more money into R&D and should the new product stall on launch,

In contrast, some believe that renewable energy is a key factor involved in helping the economy to grow. Many jobs are created in the manufacturing and running of renewable energy plants. The renewable energy and energy efficiency technologies created 8.5 million new jobs and $970 billion in revenue in the year 2006 (Langwith, “Renewable Energy is Economically”). The American Solar Energy Society says by 2030 it could generate up to $4.5 trillion in revenue for the U.S and create 40 million new jobs. This would represent one in every four jobs (Langwith, “Renewable Energy is Economically”). This shows how vital it is to get renewable energy companies in the U.S. It is important to build a stable economy again and do it all while helping the environment.

From 2000 to 2001 (exhibit 2), RIM’s revenue grew 160% from $85 million to $221 million. RIM has an extremely strong balance sheet after completing a follow-on equity offering in November 2000 that raised $ 590 million. Therefore, RIM has very strong financial assets for financing their growing opportunities. In term of one single item on balance sheet, RIM has $50.8 million liquid asset to finance any small valued opportunities, and the sales of new equity indicates the investors’ confidence towards RIM.

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.

In 1990’s 3M have 30 key technologies and get much market growth and for more development and

Many analysts would note that based on the consensus of the world population, the company’s equity is of the highest value as they are currently ranked as industry leader in market capitalization (source: Yahoo Finance) which conveniently brings me to my next evaluation.

Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income.