1) The analyst critically reviewed management projections provided for an acquisition target company called Innovation Models.
2) Several projections were deemed unrealistic, including constant high revenue growth, increasing gross margins, and decreasing capex.
3) The analyst made adjustments to projections to reflect more stable 3% revenue growth
:In this paper, we consider the equity premium puzzle under a general utility function. We derive that
the optimal strategy under a general utility function approximate the optimal strategy under the special utility
function. This result posed in the present paper can be regarded as a generalization of the work by Gong and
Zou [13]
:In this paper, we consider the equity premium puzzle under a general utility function. We derive that
the optimal strategy under a general utility function approximate the optimal strategy under the special utility
function. This result posed in the present paper can be regarded as a generalization of the work by Gong and
Zou [13]
Discussion 1Â Analysis of Financial Statements.A. This discussi.docxfelipaser7p
Â
Discussion 1:Â Analysis of Financial Statements
.
A. This discussion assignment will allow for the completion of a ratio analysis. It will also provide information that will be useful as you prepare the written report for Assignment 1: Financial Research Report, which is due at the end of Week 9.
Step 1
: Select a publicly-traded company that you will (or might) use for Assignment 1: Financial Research Report, which is due at the end of Week 9.
Step 2
: Locate financial ratio data from Mergent Online. Financial statements, ratios, and other useful information are available from the Mergent Online database that is available through the Strayer University Learning Resource Center (online). Please notice that financial ratios are grouped into appropriate categories (Profitability Ratios, Liquidity Ratios, Debt Management Ratios, and Asset Management Ratios), which makes it easy to set up the ratios and use them in the analysis.
Accessing the Mergent Online Database – Financial Statements for companies, financial ratios, and Form 10K annual reports can be obtained from the Strayer University Learning Resource Center, which is accessible from the Online Classroom (see tab at the top of the screen).
Select – Learning Resource Center
Select – Databases
Select Mergent Online
Then, in the block titled “Company Search – Enter Symbol or Company Name” enter the company’s name or its Stock Ticker Symbol (e.g., for McCormick & Company, enter MKC). Next, select the company from the drop-down menu.
For Financial Statements – Select “Company Financials” tab
For Financial Ratios – Select “Company Financials” tab and “Ratios” sub-tab
For Form 10K Annual Reports – Select “Filings” tab (and then select the most recent Annual Form 10K report)
Step 3
: Enter the financial ratio data into the Financial Ratio Analysis Model (the attached Excel spreadsheet). The data need to be entered into the yellow-coded cells (column is titled “Oldest Year”) progressing to the most recent year on the left (column is titled “Most Recent Year”).
The model presently contains financial information for McCormick & Company (Stock Ticker MKC).
You will note that the Excel spreadsheet model is programmed to identify if each ratio improved or deteriorated over the time period. And, the spreadsheet is programmed to calculate the percentage change in each of the ratios during the same period. This information should be helpful as you prepare your analysis.
(Note: This spreadsheet could be “imported” into the Assignment 1: Financial Research Report due at the end of Week 10.)
Step 4
: Prepare an analysis and discussion of the financial ratio data that are examined in the Financial Ratio Analysis Model. It is always appropriate to include the actual ratio data in the written analysis in addition to its presentation in a table, chart or graph.
(Note: In addition to Mergent, another good source of financial data and company information is:Â Â
http://www.advfn.com
 .)
B. Fr.
Forecasting is the process of making predictions of the future based on past and present data and most commonly by analysis of trends. A commonplace example might be estimation of some variable of interest at some specified future date.
July-August, 2022: Global Web Meeting on CFO MessageTETSUYA SOGO
Â
July 14, 2022: NTN North & South Americas region
July 22, 2022: NTN Europe & Africa region
August 9, 2022: NTN ASEAN, Oceania, West Asia region & India region
Discussion 1Â Analysis of Financial Statements.A. This discussi.docxfelipaser7p
Â
Discussion 1:Â Analysis of Financial Statements
.
A. This discussion assignment will allow for the completion of a ratio analysis. It will also provide information that will be useful as you prepare the written report for Assignment 1: Financial Research Report, which is due at the end of Week 9.
Step 1
: Select a publicly-traded company that you will (or might) use for Assignment 1: Financial Research Report, which is due at the end of Week 9.
Step 2
: Locate financial ratio data from Mergent Online. Financial statements, ratios, and other useful information are available from the Mergent Online database that is available through the Strayer University Learning Resource Center (online). Please notice that financial ratios are grouped into appropriate categories (Profitability Ratios, Liquidity Ratios, Debt Management Ratios, and Asset Management Ratios), which makes it easy to set up the ratios and use them in the analysis.
Accessing the Mergent Online Database – Financial Statements for companies, financial ratios, and Form 10K annual reports can be obtained from the Strayer University Learning Resource Center, which is accessible from the Online Classroom (see tab at the top of the screen).
Select – Learning Resource Center
Select – Databases
Select Mergent Online
Then, in the block titled “Company Search – Enter Symbol or Company Name” enter the company’s name or its Stock Ticker Symbol (e.g., for McCormick & Company, enter MKC). Next, select the company from the drop-down menu.
For Financial Statements – Select “Company Financials” tab
For Financial Ratios – Select “Company Financials” tab and “Ratios” sub-tab
For Form 10K Annual Reports – Select “Filings” tab (and then select the most recent Annual Form 10K report)
Step 3
: Enter the financial ratio data into the Financial Ratio Analysis Model (the attached Excel spreadsheet). The data need to be entered into the yellow-coded cells (column is titled “Oldest Year”) progressing to the most recent year on the left (column is titled “Most Recent Year”).
The model presently contains financial information for McCormick & Company (Stock Ticker MKC).
You will note that the Excel spreadsheet model is programmed to identify if each ratio improved or deteriorated over the time period. And, the spreadsheet is programmed to calculate the percentage change in each of the ratios during the same period. This information should be helpful as you prepare your analysis.
(Note: This spreadsheet could be “imported” into the Assignment 1: Financial Research Report due at the end of Week 10.)
Step 4
: Prepare an analysis and discussion of the financial ratio data that are examined in the Financial Ratio Analysis Model. It is always appropriate to include the actual ratio data in the written analysis in addition to its presentation in a table, chart or graph.
(Note: In addition to Mergent, another good source of financial data and company information is:Â Â
http://www.advfn.com
 .)
B. Fr.
Forecasting is the process of making predictions of the future based on past and present data and most commonly by analysis of trends. A commonplace example might be estimation of some variable of interest at some specified future date.
July-August, 2022: Global Web Meeting on CFO MessageTETSUYA SOGO
Â
July 14, 2022: NTN North & South Americas region
July 22, 2022: NTN Europe & Africa region
August 9, 2022: NTN ASEAN, Oceania, West Asia region & India region
Chapter 4 focuses on describing how to estimate and calculate Weighted Average Cost of Capital, answering the following questions:
How is the WACC calculated?
What is the Cost of Debt, Cost of Equity and Beta?
What is the Market Risk Premium and Country Risk Premium?
What is the periodicity of WACC calculation?
Presentation on the investment of sovereign funds for an interview with Hugo Mendes Domingos in ETV (Portuguese Economic TV) in 5 October 2010. In Portuguese
Presentation on the Clinton Initiative in the US for an interview with Hugo Mendes Domingos in ETV (Portuguese Economic TV) in 27 September 2010. In Portuguese
Presentation on the price of medicine in Portugal for an interview with Hugo Mendes Domingos in ETV (Portuguese Economic TV) in 20 September 2010. In Portuguese
Post published in the Innovation Models Blog following the interview of Hugo Mendes Domingos in ETV's (Portuguese Economic TV) Closing Bell in October 2 2012 about the current increase in company insolvencies in Portugal.
ETV - Portugal’s austerity measures and the impact on business innovationHugo Mendes Domingos
Â
Post published in the Innovation Models Blog following the interview of Hugo Mendes Domingos in ETV's (Portuguese Economic TV) Closing Bell in September 19 2012 about the austerity measures announced by the portuguese government.
ETV - Bad loans, ECB intervention and competitive advantagesHugo Mendes Domingos
Â
Post published in the Innovation Models Blog following the interview of Hugo Mendes Domingos in ETV's (Portuguese Economic TV) Closing Bell in August 8 2012 about the current increase bad credit loans by households in Portugal.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
Â
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
Â
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
The European Unemployment Puzzle: implications from population agingGRAPE
Â
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how can i use my minded pi coins I need some funds.DOT TECH
Â
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Â
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
Â
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Â
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
Â
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Â
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
What price will pi network be listed on exchangesDOT TECH
Â
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
2. Modelling Innovation – CHAPTER 5
In this case, the Free Cash Flow corresponding to the first year of the projections, 2013, is assumed to occur on 30 June 2013, which means that the
2013 Free Cash Flow will be reverted by 6 months. If the mid-period convention werenot adopted, the 2013 Free Cash Flow would have been discounted for a
full year. Overall, adopting the mid-period convention will slightly increase the DCF value. More importantly, it will result in a more accurate model.
The mid-period convention and the TV (Terminal Value).
The mid-period convention affects the terminal value (TV). The TV, when calculated as a growing perpetuity, is based on the TVthat is assumed to
occur as of 30 June of the final year. When calculating the value using the multiples method, the cash flow is assumed to occur onthat same date, to be consistent.
In the following examples, we consider a short projection period between 2013 and 2014 only. The valuation date is as of 31 December 2012.
The mid-period convention: multiples method
In casethe EBITDA multiple is used to determine the TV, the multiple should be applied to the EBITDA of the last year of the projection period. The
resulting TV is as of 30 June of the final year of the projection period, and therefore, the respective discount rate should be applied to calculate the present value.
Diagram 2 – Mid-period Convention with multiples method
Half-year FCF
Valuation Date
Assumed financial
value for the multiple
on the final day of the
31 December 2012 30 June 2013 31 December 2013 30 June 2014 final year.
Bring backTV to the valuation date.
2
3. Modelling Innovation – CHAPTER 5
The mid-period convention: perpetuity method
In this case, the assumption is that the final period’s EBIT and tax occur on 30 June (for consistency). When applying the Gordon formula, the result is
that the perpetuity reverts back to the previous period. This is simply an outcome of the calculation method. As a result, the growth rate should be applied to the
perpetuity value that results from the Gordon formula to make sure that the perpetuity value is taken forward to the final year of the projection period.
Consequently, the discount rate used to calculate the present value of the perpetuity is the same as the one used to calculate the present value of the last year of
financial projections.
Diagram 3 – Mid-period Convention with perpetuity method
Half year FCF
Valuation Date
31 December 2012 30 June 2013 31 December 2013 30 June 2014
Bring backTV to the valuation date.
5.2 Example: detailed company valuation
The following is a detailed example of a company’s valuation for the purposes of illustration. In this example, the management team of AB decided to
publicly express their interest in the acquisition of a company called Innovation Models (IM). A team was mandated to advise the acquirer and assist in the
3
4. Modelling Innovation – CHAPTER 5
negotiations, namely, on valuation matters. IM is a stable company that sells cutting-edge industrial goods (Innovation Models rubber).The analyst’s job is to
prepare a DCF valuation to determine the value of IM as of31 December 2013. Given AB’s necessity to make due diligence and negotiate the transaction, this
valuation date seems appropriate. Applicable to all tables below, all periods until 2012 are historical figures, hence the “H”. From 2012 onward, all periods are
estimates, hence the “E”. The current date for this example is April 2013, but we are valuing only 31 December 2013 because it is considered that there are still a
few months left until the closing of the accounts and the first cash flows to be considered are from 2014. The analysts sourced key financial data from public
sources, and IM’s management team provided the following information and projections:
Table 1–Key financial data
Net Debt (EUR M) 4,000
Perpetuity Growth Rate 2%
Issued Shares 700,000,000
Tax Rate 30%
Target Debt Proportion 50%
Table 2 - IM management team's projections
Unit 2009H 2010H 2011H 2012 2013E 2014E 2015E 2016E 2017E 2018E
Operational
Revenues EUR M 3,863 3,975 4,083 4,225 4,369 4,544 4,771 5,105 5,463 5,845
% change % 2.9% 2.7% 3.5% 3.4% 4.0% 5.0% 7.0% 7.0% 7.0%
Gross Margin EUR M 1,468 1,630 1,756 1,732 1,704 1,818 2,004 2,297 2,677 2,864
% margin % 38.0% 41.0% 43.0% 41.0% 39.0% 40.0% 42.0% 45.0% 49.0% 49.0%
EBITDA EUR M 1,082 1,232 1,307 1,310 1,267 1,409 1,574 1,787 2,130 2,280
% margin % 28.0% 31.0% 32.0% 31.0% 29.0% 31.0% 33.0% 35.0% 39.0% 39.0%
EBIT EUR M 788 918 988 959 909 1,045 1,241 1,429 1,803 1,929
% margin % 20.4% 23.1% 24.2% 22.7% 20.8% 23.0% 26.0% 28.0% 33.0% 33.0%
Capex EUR M (386) (477) (531) (465) (524) (545) (477) (511) (437) (468)
% margin % 10.0% 12.0% 13.0% 11.0% 12.0% 12.0% 10.0% 10.0% 8.0% 8.0%
Change in Net Working Capital (NWC) EUR M 4 5 5 8 8 7 9 10 11 12
% change in
revenues % 4.6% 4.8% 4.6% 5.6% 5.3% 4.0% 4.0% 3.0% 3.0% 3.0%
4
5. Modelling Innovation – CHAPTER 5
At this stage, the analyst has all the data she needs to perform the Discounted Cash Flow analysis.
The Weighted Net Present
Free Cash Flow
TV Estimation Average Cost of Value of Free
(FCF)
Capital (WACC) Cash-Flows
A critical view
The analyst should critically examine management’s projections. Upon analysing the figures disclosed by IM’s management team, some figures make
little sense considering the financial and strategic context of the company. The following table shows the analyst’s critical analysis before she applies the DCF
method.
5
6. Modelling Innovation – CHAPTER 5
Analyst: Growing
revenues in a context in
Table 3–Critical analysis
which the company does
Unit 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Operational Revenues not change its strategy is
(OR) EUR M 3,863 3,975 4,083 4,225 4,369 4,544 4,771 5,105 5,463 5,845
% variation % 2.9% 2.7% 3.5% 3.4% 4.0% 5.0% 7.0% 7.0% 7.0%
not realistic.
Gross Margin (GM) EUR M 1,468 1,630 1,756 1,732 1,704 1,818 2,004 2,297 2,677 2,864
% margin % 38.0% 41.0% 43.0% 41.0% 39.0% 40.0% 42.0% 45.0% 49.0% 49.0% Analyst: Constant
EBITDA EUR M 1,082 1,232 1,307 1,310 1,267 1,409 1,574 1,787 2,130 2,280 growth in Gross
% margin % 28.0% 31.0% 32.0% 31.0% 29.0% 31.0% 33.0% 35.0% 39.0% 39.0% Margins and
EBIT EUR M 788 918 988 959 909 1,045 1,241 1,429 1,803 1,929 decreasing CAPEX in
% margin % 20.4% 23.1% 24.2% 22.7% 20.8% 23.0% 26.0% 28.0% 33.0% 33.0%
percentage of
Capex EUR M (386) (477) (531) (465) (524) (545) (477) (511) (437) (468) Revenues is not
% revenues % 10% 12% 13% 11% 12% 12% 10% 10% 8% 8%
realistic.
Change in Net Working Capital (NWC) EUR M 4 5 5 8 8 7 9 10 11 12
% Revenue Change % 4.6% 4.8% 4.6% 5.6% 5.3% 4.0% 4.0% 3.0% 3.0% 3.0%
Analyst: Net Working Capital
growing at a rate below revenues’
growth rate is not realistic.
6
7. Modelling Innovation – CHAPTER 5
Adjustments to the projections
Our analyst’s views have an impact on IM’s valuation. As a result, adjustments to some figures inTable 2are needed to make the DCF valuation more
realistic.
Revenues and Gross Margins
Table 4 - Operational revenue adjustments
IM's Management Team Unit 2014E 2015E 2016E 2017E 2018E
Analyst: A constant
Operational Revenues EUR M 4,544 4,771 5,105 5,462 5,845
growth rate in revenues is
% variation % 4.0% 5.0% 7.0% 7.0% 7.0%
more realistic as there is
Analyst (after revision)
no change in company
Operational Revenues EUR M 4,500 4,635 4,774 4,917 5,065 strategy.
% variation % 3.0% 3.0% 3.0% 3.0% 3.0%
Table 5 - Gross margin adjustments
Analyst: Taking into
account that this company’s
IM's Management Team Unit 2014 2015 2016 2017 2018
market is stable, this
Gross Margin EUR M 1,818 2,004 2,297 2,677 2,864
projection is more realistic.
% margin % 40.0% 42.0% 45.0% 49.0% 49.0%
These Gross Margins were
Analyst (after revision)
determined using the
Gross Margin EUR M 1,818 1,872 1,928 1,986 2,046 adjusted revenues in Table 4.
% margin % 40.0% 40.0% 40.0% 40.0% 40.0%
7
8. Modelling Innovation – CHAPTER 5
EBITDA, depreciation andamortisation, CAPEX and change in NWC
Table 6 - EBITDA adjustments
IM's Management Team Unit 2014 2015 2016 2017 2018
EBITDA EUR M 1,409 1,574 1,787 2,130 2,280
% margin % 31.0% 33.0% 35.0% 39.0% 39.0% Analyst: Constant
Analyst (after revision) margins appear more
EBITDA EUR M 1,350 1,391 1,432 1,475 1,519 realistic.
% margin % 30.0% 30.0% 30.0% 30.0% 30.0%
Table 7 - Depreciation and amortisation adjustments
IM's Management Team Unit 2014 2015 2016 2017 2018
Dep. Amort EUR M 364 334 357 328 351
Dep. Amort. % 8.0% 7.0% 7.0% 6.0% 6.0% Analyst: Constant
Analyst (after revision) D&Ais more realistic.
Dep. Amort EUR M 360 371 382 393 405
Dep. Amort. % 8.0% 8.0% 8.0% 8.0% 8.0%
8
9. Modelling Innovation – CHAPTER 5
Table 8 - CAPEX adjustments
IM's Management Team Unit 2014 2015 2016 2017 2018
Capex EUR M (545) (477) (511) (437) (468)
% Revenue % 12.0% 10.0% 10.0% 8.0% 8.0%
Analyst (after revision) Analyst: Constant %
Capex EUR M (540) (556) (573) (590) (608) of
% Revenue % 12.0% 12.0% 12.0% 12.0% 12.0% revenuesappearmore
realistic.
Table 9 - Net Working Capital adjustments
Analyst: A constant
proportion of NWC
IM's Management Team Unit 2014 2015 2016 2017 2018
Net Working Capital EUR M 7.0 9.1 10.0 10.7 11.5 relative to Revenues is
% Change in more realistic compared
Revenue % 4.0% 4.0% 3.0% 3.0% 3.0%
with the management
Analyst (after revision)
Net Working Capital EUR M 6.6 6.8 7.0 7.2 7.4 team´s optimistic
% Change in projections.
Revenue % 5.0% 5.0% 5.0% 5.0% 5.0%
9
10. Modelling Innovation – CHAPTER 5
This marks the end of the preview for Chapter 5. You will be able to view the rest of the contents upon publication of the full e-
book. Thank you for your interest.
10