Reformatted Financial Statements and Financial Analysis, Prospective Analysis and Application for Blackmore Limited Company
Using the Blackmore Limited Company and analysis, provide the following:
- Reformatted Financial Statements and Financial Analysis (from lecture 4 and 5) (10 marks).
Reformat at least the last 5 years of your company’s financial statements. Use ratio analysis and cash flow analysis to evaluate the current and past performance of the business and assess its sustainability.
- Reformat at least 5 years
- Prepare 4 years of ratios
- Prepare risk ratios for cash flow analysis
- WRITE UP – what happened AND WHY the ratios/ cash flow changed
- Prospective Analysis (15 marks) (from lecture 6)
Forecast future financial performance. Use the four valuation models (which are discounted dividend model, residual income model, residual operating model, free cash flow mode) outlined in class to produce an estimate of firm value, and compare to stock price. Perform sensitivity analysis and discuss the results.
- Prepare your forecasts and write up the reasons for your forecast assumptions
- Prepare your valuations and write up just the $ answers to your 4 models, as well as include share price on the date of your valuation (the date of your last set of reformatted financial statements (table 1)
- For all of your forecasting and cost of capital assumptions1, write up your reasons for your optimistic and pessimistic outcomes (best and worst they ever did in last 5 years perhaps?) and calculate your sensitivity analysis (Lecture 9). Only use the AOI model and Table 2 reports your sensitivity results. Again compare to share price and discuss your results
- Application (15 marks) (lecture 9 and 10)
Using your sensitivity analysis, and as a potential management consultant to your chosen firm, provide a discussion as to the possible opportunities for improvement, and potential challenges for your firm. Provide remedies for these concerns. You should be quite specific in any recommendations you make.
- Your sensitivity testing will show you that your firm will be more sensitive to one of:
- sales growth/cost of capital
- PM (profit margin)
- ATO (Asset Turnover Ratio)
- Depending on which of the three above is most important to your firm, come up with some ideas for specific things that your firm can do. For example, if sales growth matters don’t just say “increase sales”. You need to come up with creative ideas for your firm to increase sales. You never know, yours may be the next assignment sent on to your firm!
Length: The project write-up should be a readily comprehensible and condensed report on your work (i.e., not a detailed compilation of all the various valuation scenarios you considered, and all the information you collected). Your write-up is limited to 10 pages of text and 10 pages of supporting material. Please use a minimum font size of 12 and 2.5cm margins. ( Note: If you choose to use double spacing for text, then the write-up extends to eight pages).
This assignment need to make a excel to calculate sensitivity analysis, only use the AOI model (lecture 9), I will upload all of lecture notes about this assignment. And I will upload assignment sample from my last semester, this sample achieved high mark, but it is different company, when you start to my order, you can look at this sample’s structure, the both assignment’s requirement are almost same.
In this assignment, I need to lots of table and figure to analysis, and it’s required for 10 pages of supporting material like table (maybe same as assignment sample’s Appendix).