Performance Analysis and Valuation of Company

1. Introduction

Company Profile, Major Businesses , Structure , Strategic Initiatives, Growth Strategy of the Company etc.( Focus on SWOT Analysis)

2. Trend Analysis

Financial highlights for last 10 years –Assets, Revenues, Cash Flow , Net Profit, Market Capitalization

Discussion on percentage growth rates in Assets, Revenues, Cash flow and Net Profit during the past 10 years.

3. Financial Ratio Analysis

Profitability Ratios

Leverage Ratios

Operational Efficiency or Asset Utilization ratios

Liquidity Ratios

Market Valuation Ratios

In case the company selected is a bank or financial institution, then focus on the following ratios.

Profitability Ratios

Efficiency Measures

Capital Adequacy Ratios

Asset Quality Ratios

4. Stock Wealth Analysis

In this section, you are expected to analyze the wealth created by the company in the stock market. The stock data has to be analyzed for the last five years. The following returns need to be calculated.

Cumulative monthly returns

Average Yearly returns /Excess returns over market index

Holding Period Yield

Excess Value created (Market Value-Book Value) for the recent five-year period. BV as per cent of MV for each period has to be calculated.

Use standard deviation to measure risk for the recent five-year period.

5. Valuation Model –Dividend Discount Model and Relative Valuation.

Estimation whether the stock is overvalued or undervalued.