In this project, you are supposed to be the financial analyst that is covering the same firm studied in MP1 and MP2. You ha

In this project, you are supposed to be the financial analyst that is covering the same firm studied in MP1 and MP2. You have to apply the knowledge obtained in this class to develop possible future scenarios in order to forecast financial statements 4 years into the future, calculate the free cash flows and then calculate the fundamental value of the firm. Once you compare the expected price from the scenarios against current stock price, you will develop a recommendation whether to BUY, HOLD or SELL the share of that company.

University of Houston-Victoria FINC 6352- Financial Management Dr. Xavier Garza Gomez Mini Project 4

Financial statement forecast and Corporate Valuation

1. Purpose of the project: In this project, you are supposed to be the financial analyst that is covering the same firm studied in MP1 and MP2. You have to apply the knowledge obtained in this class to develop possible future scenarios in order to forecast financial statements 4 years into the future, calculate the free cash flows and then calculate the fundamental value of the firm. Once you compare the expected price from the scenarios against current stock price, you will develop a recommendation whether to BUY, HOLD or SELL the share of that company.

2. Outline for the project: (1) Estimate Operating ratios

Using the financial statements obtained in MP1, students will calculate operating ratios: (cost/sales, Dep/PPE, cash/sales, AR/sales, Inv/sales, PPE/sales, AP/sales, accruals/sales, tax rate) for the past 15 years

(2) Estimate short term and long-term sales growth rates Students will use the growth profile reported in MP1 to develop scenarios of possible sales growth for the next 2 years. For years 3 and 4, students will analyze long-term growth prospects for the company based on the growth of the economy. (real GDP forecasts, inflation) or other macroeconomic variables (wages growth, population growth, etc.) while considering the countries/regions where the company operates.

(3) Develop scenarios Based on the forecast for sales growth and the ranges for operating variables, students will develop two initial scenarios.

1) “Stay the same” scenario. This scenario just uses the most recent values of the operating ratios and the most recent sales growth rate for years 1 and 2.

2) “Average value” scenario. Using 15 years of data, this scenario uses the mean of all operating ratios and the average of sales growth to forecast values for years 1 and 2.

Alexis Giusti

FINC 6352 – Financial Management MP4 Dr. Xavier Garza Gómez

At this stage of the process, students will decide which of the two initial scenarios (current or average) will be used as base for the other scenarios. 3) Minor improvement scenario. Operating ratios and growth rates improve for the

company. Improvement for operating variables doesn’t exceed 25% of the variable’s 15-yr range or 1% for sales growth rates. Improvement is applied to the “base” scenario.

4) Mild recession. Operating ratios and growth rates deteriorate. Change for operating variables doesn’t exceed 25% of the variable’s 15-yr range or 1% for growth rates.

5) Major improvement scenario. Operating ratios and growth rates improve for the company. Improvement for operating variables may exceed 25% of the variable’s 15-yr range or 1% in growth rates.

6) Continued deterioration. Operating ratios and growth rates deteriorate. Change for operating variables may exceed 25% of the variable’s 15-yr range or 1% in growth rates.

For simplicity, the scenarios will only modify Year 1 operating ratios and assume they stay constant forever. That is, no improvement/deterioration in operations occur after year 1. Once the scenarios are defined, probability must be assigned to each of them.

(4) Calculate FCF Calculate 4 years of FCF for the firm using the template. Make sure the Year 4 growth rate for FCF matches the long-term growth rate in sales.

(5) Valuation Using the WACC and tax rate calculated in MP2, students will calculate the value of operations and the stock price of the company for each of the scenarios

(6) Sensitivity analysis and recommendation Students will analyze the sensitivity of the price estimate to the growth scenarios and in relation to the main input variables. Students will develop a BUY/HOLD/SELL recommendation based on the expected price and the price range (standard deviation) obtained from the scenarios.

FINC 6352 – Financial Management MP4 Dr. Xavier Garza Gómez

3. Other information regarding the project: (1) Information obtained in previous MPs is needed for the successful completion of this mini

project. Comments/feedback received about WACC calculation must be incorporated into the Excel file before final submission.

(2) The reports will be submitted individually. This mini project is worth 60 points (out of 1000).

  • 1. Purpose of the project:
  • 2. Outline for the project:

,

Compet1

Home Depot Inc (NYS: HD)
Exchange rate used is that of the Year End reported date
HD
Profitability Ratios 01/31/2021 02/02/2020 02/03/2019 01/28/2018 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 01/29/2012 01/30/2011 01/31/2010 02/01/2009 02/03/2008 01/28/2007
ROA % (Net) 21.18 23.67 24.72 19.78 18.66 17.04 15.81 13.23 10.94 9.66 8.26 6.5 5.3 8.95 11.94
ROE % (Net) 14099.83 AvgEqty<0 AvgEqty<0 299.07 149.85 89.89 58.25 35.64 25.01 21.17 17.49 14.36 12.77 20.23 22.24
ROI % (Operating) 53.2 57.05 54.76 52.19 48.46 43.61 39.05 32.93 26.69 23.3 20.29 16.53 14.48 21.01 28.66
EBITDA Margin % 15.67 16.39 16.27 16.59 16.28 15.41 14.73 13.86 12.64 11.85 11.11 9.99 8.78 11.83 12.72
Calculated Tax Rate % 24.22 23.6 23.6 37 36.3 36.4 36.4 36.4 37.2 36.01 36.7 34.2 35.6 36.4 38.11
Revenue per Employee 262427 265884 257756 244991 233633 230551 224810 216516 216309 213258 212411 209331 222000 229904 250238
Liquidity Ratios 01/31/2021 02/02/2020 02/03/2019 01/28/2018 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 01/29/2012 01/30/2011 01/31/2010 02/01/2009 02/03/2008 01/28/2007
Quick Ratio 0.47 0.23 0.22 0.34 0.32 0.33 0.28 0.31 0.34 0.34 0.16 0.23 0.13 0.14 0.3
Current Ratio 1.23 1.08 1.11 1.17 1.25 1.36 1.36 1.42 1.34 1.55 1.33 1.34 1.2 1.15 1.39
Net Current Assets % TA 7.52 2.8 4.12 6.15 8.36 10.5 10.1 11.18 9.52 12.7 8.37 8.65 5.37 4.44 9.7
Debt Management 01/31/2021 02/02/2020 02/03/2019 01/28/2018 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 01/29/2012 01/30/2011 01/31/2010 02/01/2009 02/03/2008 01/28/2007
LT Debt to Equity 10.86 Equity<0 Equity<0 16.69 5.16 3.31 1.81 1.17 0.53 0.6 0.46 0.45 0.54 0.64 0.47
Total Debt to Equity 11.29 Equity<0 Equity<0 18.59 5.45 3.37 1.84 1.18 0.61 0.6 0.52 0.5 0.64 0.76 0.47
Interest Coverage 14.06 14.05 15.94 14.93 14.35 15.64 21.24 13.11 14.25 11.23 10.32 5.85 5.67 11.64 26.5
Asset Management 01/31/2021 02/02/2020 02/03/2019 01/28/2018 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 01/29/2012 01/30/2011 01/31/2010 02/01/2009 02/03/2008 01/28/2007
Total Asset Turnover 2.17 2.32 2.4 2.31 2.22 2.15 2.07 1.94 1.8 1.75 1.68 1.62 1.67 1.58 1.88
Receivables Turnover 51.97 54.69 54.76 50.83 48.41 52.62 57.88 56.59 55.72 60.59 66.55 68.55 64.08 33.96 32.42
Inventory Turnover 5.6 5.11 5.33 5.26 5.11 5.09 4.9 4.72 4.65 4.4 4.29 4.2 4.22 4.18 5.04
Accounts Payable Turnover 13.66 14.22 14.19 14.21 13.99 14.35 14.38 14.15 14.38 14.75 14.23 13.7 13.55 11.63 13.61
Accrued Expenses Turnover 27.32 26.67 26.86 27.02 26.58 26.68 26.18 25.6 24.8 24.62 24.11 23.59 24.99 24.63 30.09
Property Plant & Equip Turnover 5.58 4.9 4.79 4.6 4.3 3.95 3.62 3.33 3.03 2.85 2.69 2.56 2.66 2.81 3.54
Cash & Equivalents Turnover 26.42 56.52 39.63 33 39.91 45.07 45.68 35.74 32.83 55.76 69.36 68.41 148.31 145.64 130.78
Per Share 01/31/2021 02/02/2020 02/03/2019 01/28/2018 01/29/2017 01/31/2016 02/01/2015 02/02/2014 02/03/2013 01/29/2012 01/30/2011 01/31/2010 02/01/2009 02/03/2008 01/28/2007
Cash Flow per Share 17.59 12.59 11.28 10.24 7.98 7.36 6.18 5.37 4.58 4.27 2.79 3.05 3.3 3.05 3.74
Book Value per Share 3.06 -2.89 -1.7 1.26 3.6 5.04 7.13 9.07 11.98 11.64 11.64 11.42 10.48 10.48 12.71

ratios company

Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
LOW
Profitability Ratios 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
ROA % (Net) 13.57 11.61 6.65 9.92 9.27 8.09 8.38 7.01 5.93 5.38 6.04 5.44 6.93 9.61 11.87
ROE % (Net) 343.27 152.88 48.76 56.17 43.2 28.98 24.8 17.83 12.93 10.44 10.84 9.63 12.89 17.7 20.71
ROI % (Operating) 43.48 30.78 18.86 29.35 27.11 23.94 21.99 18.36 15.16 13.2 14.62 12.93 16.19 21.98 27.17
EBITDA Margin % 11.26 10.69 7.6 10.96 11.3 10.93 11.16 10.5 10.06 9.47 10.54 10.01 11.04 12.57 13.45
Calculated Tax Rate % 24.6 23.87 31.82 37.2 40.53 42.39 36.9 37.76 37.55 36.72 37.73 36.88 37.39 37.73 37.88
Revenue per Employee 264245 226082 238350 221960 220571 219394 211945 204442 206775 199177 209184 198116 211190 224147 224076
Liquidity Ratios 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
Quick Ratio 0.28 0.06 0.05 0.06 0.05 0.07 0.06 0.06 0.09 0.16 0.16 0.14 0.08 0.07 0.12
Current Ratio 1.19 1.01 0.98 1.06 1 1.01 1.08 1.16 1.27 1.28 1.4 1.32 1.15 1.12 1.27
Net Current Assets % TA 7.69 0.34 -0.78 1.92 0.08 0.22 2.3 4.34 6.36 6.5 8.45 7.2 3.76 3.03 6.39
Debt Management 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
LT Debt to Equity 14.38 8.5 3.95 2.65 2.24 1.51 1.08 0.85 0.65 0.43 0.36 0.24 0.28 0.35 0.28
Total Debt to Equity 15.16 9.79 4.45 2.89 2.44 1.65 1.14 0.89 0.66 0.46 0.36 0.27 0.34 0.41 0.28
Interest Coverage 11.38 9.14 6.44 10.4 9.06 9.01 9.29 8.72 8.42 8.83 10.72 10.84 13.52 24.25 33.45
Asset Management 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
Total Asset Turnover 2.08 1.96 2.05 1.97 1.95 1.88 1.75 1.64 1.53 1.47 1.47 1.44 1.52 1.65 1.79
Receivables Turnover – – – – – – – – – – – – – – 5228.44
Inventory Turnover 4.09 3.82 4.04 4.14 4.27 4.19 4.07 3.94 3.92 3.94 3.82 3.74 4.01 4.28 4.44
Accounts Payable Turnover 9.69 9.08 9.62 10.39 10.41 11.01 11.13 11.08 11.25 11.35 11.33 11.28 12.37 13.38 14.81
Accrued Expenses Turnover 50.07 52.37 53.48 50.3 46.34 44.72 44.58 45.76 48 58.73 78.7 93.67 112.73 121.65 118.23
Property Plant & Equip Turnover 4.75 3.9 3.75 3.47 3.24 2.99 2.76 2.53 2.33 2.24 2.2 2.09 2.19 2.4 2.66
Cash & Equivalents Turnover 33.24 117.92 130.13 120.08 132.85 136.02 131.57 114.94 65.16 59.3 76.24 107.98 183.89 150.13 119.58
Per Share 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
Cash Flow per Share 14.81 5.54 7.66 6.05 6.28 5.17 5 3.89 3.28 3.37 2.76 2.78 2.84 2.94 2.94
Book Value per Share 1.97 2.58 4.55 7.08 7.43 8.41 10.38 11.51 12.48 13.32 13.38 13.07 12.28 11.04 10.31

Compet2

Walmart Inc (NYS: WMT)
Exchange rate used is that of the Year End reported date
WMT
Profitability Ratios 01/31/2021 01/31/2020 01/31/2019 01/31/2018 01/31/2017 01/31/2016 01/31/2015 01/31/2014 01/31/2013 01/31/2012 01/31/2011 01/31/2010 01/31/2009 01/31/2008 01/31/2007
ROA % (Net) 5.51 6.53 3.15 4.89 6.83 7.29 8.01 7.86 8.55 8.39 9.33 8.58 8.17 8.09 7.8
ROE % (Net) 17.32 20.22 8.87 12.67 17.19 18.15 20.76 21 22.96 22.45 23.53 21.08 20.58 20.18 19.67
ROI % (Operating) 17.37 15.84 17.23 16.48 17.85 18.38 20.51 20.41 21.73 21.85 22.16 21.82 20.98 20.96 21.29
EBITDA Margin % 6.07 6.4 4.72 5.56 6.74 6.95 7.46 7.49 7.72 7.75 7.86 7.63 7.27 7.47 7.46
Calculated Tax Rate % 33.35 24.43 37.36 30.42 30.27 30.31 32.2 32.87 31.01 32.56 32.2 32.35 34.19 34.2 33.56
Revenue per Employee 242445 238165 233820 217540 210672 219150 220750 216497 212673 203159 200880 194388 192618 180380 183500
Liquidity Ratios 01/31/2021 01/31/2020 01/31/2019 01/31/2018 01/31/2017 01/31/2016 01/31/2015 01/31/2014 01/31/2013 01/31/2012 01/31/2011 01/31/2010 01/31/2009 01/31/2008 01/31/2007
Quick Ratio 0.26 0.2 0.18 0.16 0.19 0.22 0.24 0.2 0.2 0.2 0.21 0.22 0.2 0.16 0.2
Current Ratio 0.97 0.79 0.8 0.76 0.86 0.93 0.97 0.88 0.83 0.88 0.89 0.87 0.88 0.81 0.9
Net Current Assets % TA -1.02 -6.76 -7.1 -9.22 -4.65 -2.19 -0.98 -3.99 -5.85 -3.79 -3.65 -4.24 -3.94 -6.65 -3.42
Debt Management 01/31/2021 01/31/2020 01/31/2019 01/31/2018 01/31/2017 01/31/2016 01/31/2015 01/31/2014 01/31/2013 01/31/2012 01/31/2011 01/31/2010 01/31/2009 01/31/2008 01/31/2007
LT Debt to Equity 0.56 0.64 0.69 0.47 0.54 0.55 0.54 0.58 0.54 0.66 0.64 0.51 0.53 0.52 0.5
Total Debt to Equity 0.6 0.73 0.8 0.6 0.59 0.62 0.62 0.74 0.71 0.75 0.73 0.58 0.65 0.69 0.63
Interest Coverage 10.28 8.53 10.31 9.38 10.04 9.77 11.56 12.13 13.47 12.3 12.75 12.71 12 12.23 13.41
Asset Management 01/31/2021 01/31/2020 01/31/2019 01/31/2018 01/31/2017 01/31/2016 01/31/2015 01/31/2014 01/31/2013 01/31/2012 01/31/2011 01/31/2010 01/31/2009 01/31/2008 01/31/2007
Total Asset Turnover 2.28 2.3 2.43 2.48 2.43 2.39 2.38 2.34 2.36 2.39 2.4 2.44 2.47 2.41 2.41
Receivables Turnover 87.13 83.39 86.48 87.4 84.57 77.75 72.19 70.85 73.65 81.07 91.38 101.43 107.02 116.66 126.74
Inventory Turnover 9.4 8.9 8.75 8.6 8.26 8.06 8.11 8.08 8.34 8.7 9.08 9 8.79 8.32 8.02
Accounts Payable Turnover 11.6 11.14 11.04 11.43 12.13 12.54 12.81 12.62 12.53 12.74 13.18 13.77 13.66 12.96 13.04
Accrued Expenses Turnover 25.49 25.41 24.85 23.64 23.24 23.93 24.32 23.36 23.2 23.42 21.66 20.99 22.72 23.53 23.1
Property Plant & Equip Turnover 5.65 5 4.85 4.65 4.45 4.3 4.23 4.15 4.19 4.16 4.12 4.24 4.33 4.23 4.32
Cash & Equivalents Turnover 40.99 60.97 71.06 73.46 62.23 54.05 59.17 63.24 65.3 64.1 55.14 53.78 62.99 58.54 50.58
Per Share 01/31/2021 01/31/2020 01/31/2019 01/31/2018 01/31/2017 01/31/2016 01/31/2015 01/31/2014 01/31/2013 01/31/2012 01/31/2011 01/31/2010 01/31/2009 01/31/2008 01/31/2007
Cash Flow per Share 12.71 8.86 9.48 9.46 10.14 8.54 8.84 7.11 7.56 7.01 6.47 6.79 5.86 5.01 4.84
Book Value per Share 28.69 26.37 25.19 26.38 25.52 25.47 25.21 23.59 23.04 20.86 19.49 18.69 16.63 16.26 14.91

Compet3

Exchange rate used is that of the Year End reported date
Profitability Ratios 12/29/2019 12/30/2018 12/31/2017 01/01/2017 01/03/2016 12/28/2014 12/29/2013 12/30/2012 01/01/2012 01/02/2011 01/03/2010 12/28/2008 12/30/2007 12/31/2006 01/01/2006
ROA % (Net)
ROE % (Net)
ROI % (Operating)
EBITDA Margin %
Calculated Tax Rate %
Revenue per Employee
Liquidity Ratios
Quick Ratio
Current Ratio
Net Current Assets % TA
Debt Management
LT Debt to Equity
Total Debt to Equity
Interest Coverage
Asset Management
Total Asset Turnover
Receivables Turnover
Inventory Turnover
Accounts Payable Turnover
Accrued Expenses Turnover
Property Plant & Equip Turnover
Cash & Equivalents Turnover
Per Share
Cash Flow per Share
Book Value per Share

asreported

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.

Related Posts

All Rights Reserved Terms and Conditions
College pals.com Privacy Policy 2010-2018

Powered by Clearbit
Lowe's Companies Inc (NYS: LOW)
Exchange rate used is that of the Year End reported date
As Reported Annual Balance Sheet
Report Date 01/29/2021 01/31/2020 02/01/2019 02/02/2018 02/03/2017 01/29/2016 01/30/2015 01/31/2014 02/01/2013 02/03/2012 01/28/2011 01/29/2010 01/30/2009 02/01/2008 02/02/2007
Currency USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD
Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified
Consolidated Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Scale Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands
Cash & cash equivalents 4690000 716000 511000 588000 558000 405000 466000 391000 541000 1014000 652000 632000 245000 281000 364000
Short-term investments 506000 160000 218000 102000 100000 307000 125000 185000 125000 286000 471000 425000 416000 249000 432000
Merchandise inventory – net 16193000 13179000 12561000 11393000 10458000 9458000 8911000 9127000 8600000 8355000 8321000 8249000 8209000 7611000 7144000
Deferred income taxes, net – – – – – – 230000 252000 217000 183000 193000 208000 166000 247000 161000
Other current assets 937000 1263000 938000 689000 884000 391000 348000 341000 301000 234000 330000 218000 215000 298000 213000
Total current assets 22326000 15318000 14228000 12772000 12000000 10561000 10080000 10296000 9784000 10072000 9967000 9732000 9251000 8686000 8314000
Land 7315000 7200000 7196000 7414000 7329000 7086000 7040000 7016000 6986000 6936000 6742000 6519000 6144000 5566000 5496000
Buildings – – – – – – – – – – – 12069000 11258000 10036000 9655000
Buildings & building improvements 18090000 17862000 18052000 18521000 18147000 17451000 17247000 17161000 16968000 16640000 16531000 – – – –
Equipment 10466000 10377000 10090000 10475000 10978000 10863000 10426000 10063000 9780000 9835000 9142000 8826000