Complete the valuation template provided, which already has the company financials of a national Australian eLearning company for 2008 – 2011 (the 2012 financials are not available as the books have not yet been closed). This is NOT a publically listed company.
The valuation template provided back MUST have notes as to what could be adjusted and why.
NOTE: You will probably have specific questions, about what could be adjusted; if so I would be happy to answer these questions as I know the industry inside out; I just don’t understand how to fill this out.
The template should be pretty much cell-referenced already.
Note, the information in the following pages is NOT correct for an eLearning (online Learning) company and would need to be updated in line with the correct Australian information (you would need to reference the site correctly ON the excel page so I knew what I was looking at)- RF rate, BETA , RD cost of debt, PE PB and ROE (see notes underneath this page on what you need to find – the company develops its own online learning courses and provides both IT software and services), ucurve analysis and current financial results
ALL pages in the excel spreadsheet must be accurately completed in line with the data provided. If there is additional data that you would need, please let me know.
2. Prepare a report (specifications below but the report should conform to the content and style of a report to be attached to a prospectus for registration with the ASIC (Australian Securities and Investment Commission) – without the statutory requirements. State which valuation methods you believe reflects the true value of your company and why.
STEP 1: THE VALUATION
VALUATION PROJECT – Valuation of Company Shares/
The purpose of this project is to present the valuation of a company, using a valuation model to show your workings.
I have provided this valuation model to you; a lot of which has been cell referenced already (bear in mind I only have data for 4 years so this needs to be adjusted).
I have provided financial data for the periods 2008 – 2011 for an Australian national eLearning (online learning) company, the company that I am doing my assignment on. This is not a listed company.
The purpose of the project is to explore and apply the valuation and forecasting techniques covered in the course to value the company. The project requires you to do an in-depth valuation.
In your analysis of the company you must apply both the ratio analysis tools covered in the prior course and the quantitative techniques and models examined in this subject.
As a general guideline, students might undertake the following steps (note: I provided the template to you that needs to be completed based on the information already entered: the financial data provided for 2008 – 2011 AND the adjusted data page).
An example of what we have been specifically asked to do:
Perform a Dupont style ratio analysis of your company to determine, if possible, those performance aspects of the company that make it a takeover target or a possible public offering.
Most valuation models require future projections of earnings, dividends and/or cash flows. The financial records for the business represent the logical departure for any future projections. Students should therefore address:
• The accounting issue: What are the true earnings for the period?
• The business issue: What does the earnings record imply about the future earning power of the company?
• The security valuation issue: What aspects of past earnings power are permanent and what are transitory?
Determine the projected earning, dividends, and cash flows based on the analysis of past accounting data for your target company (hereafter called the target).
After your initial analysis and estimation for your in-depth company you may consider that your data needs to be adjusted. Your adjustments might include, but are not limited to, the following:
a. Adjustments to future earnings rates due to industry, market or international trends applicable to the business.
b. Adjustments to the asset base for assets to be sold such that you use a combined asset value and earnings approach.
c. Adjustments for accounting method choices and distortions as discussed in prior subjects.