2015 Company Assessment Project

Guidelines for Analysis

Weightage: 25%
Company Background
A listed company (national or multinational) has been allocated to your group.
You are to ensure that:
a) Detailed financial information should be easily available for the company for at least the
last 4 years.
b) Select top four peer companies/competitors for your company. Perform an analysis to
identify the benchmark for your company.
After the company is selected carry out an analysis on the following lines. (Make use of the
learnings from finance courses, and beyond, and try to apply concepts and exercises you have
learnt.)
Component

1
Business & Value
Chain Description

Indicative description of tasks and findings

Overview
Provide a brief overview of the company and its main line of
business(es) examining revenue split.
Cash Flows

2
Cash Flow
Estimation &
Growth Pattern
Analysis

3
Cost of Capital
&
Performance

Are the firms stated operating income and cash flows satisfactory for
performing a good analysis? Were adjustments/corrections required for
arriving at a better picture?
Growth Pattern Choice
How fast have the companys earnings grown historically?

How fast do analysts expect this companys earnings to grow in the

future? (Refer at least 2 analyst reports for your company.)
How much is being reinvested by company for growth?
If you are anticipating high growth, what are the barriers to entry that
will allow high growth to continue? How long do you think it will last?
Risks and Cost of Capital

From your calculations: what is the cost of equity of the company?

From your calculations: what is the cost of debt of the company?

What is the equity value per share? How does it compare with that of
historical market value of share?
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4
Working Capital
Management
(WCM)
&
Efficiency

Working Capital
Comment on relative efficiency of working capital management.
How has the companys WCM fared with respect to benchmark?

What are the challenges in the existing position of working capital for
the company and how has it impacted the company profitability?

What improvements in WCM can bring about positive financial impact?

Calculate/estimate the positive change resulting from your suggestions.

The Big Picture of Business Finance

Comment on your firms current debt position and financial risk.
What are your companys two most important competitive advantages?
What additional competitive advantage you think should be nurtured?
Encompassing all your analysis, comment on the future prospects for the
company. (The big picture.)

Additional Points:
1. You will need to make use of online resources/library e-databases for accessing financial data;
and are free to make reasonable assumptions.
2. The presentation should be in the form of a continuous narrative; avoid describing each
section disjointedly. All are students of the group are expected to present. The component-wise
suggested time allocation is: 1) 1 minute; 2) 6 minutes; 3) 8 minutes; 4) 5 minutes. Maximum
time available for presentation of Company Assessment is 20 minutes per group.
3. Try your best make the presentation professional and suited to real-world. One aspect of this
involves focus on getting the message across instead of dwelling too much on calculations and
spreadsheet numbers during the presentation; have calculations in the background, but try and
make the audience listen to you. However, you must have all the calculations and numbers
ready for display in case of queries or a detail-check session.
4. Each group is expected to submit a printed 12-page (excluding cover pages & annexures, if any)
hard-copy of write-up. The only hard-copy required is that of the write-up.
5. The excel model must be properly formatted covering all the key assumptions and findings
under each sub-heading as given above. The PPT is expected to be of professional quality.
6. Each group is to submit a zip file containing the PPT, excel model and write-up via your section
CR. The section CR would combine all the submissions (i.e. 12 zip files) and mail it across to me
as a single zip file with an appropriate file name (e.g. FM2_Company_Project_SectionA.zip)
by the stipulated deadline.
7. The deadline for submission is: March 2nd, 2015, latest by 11 pm. You may submit the hardcopy the next day, before 4 pm, to the PGDM office.
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