Final Project I Submission: Corporate Valuation Report
Order InstructionsI have attached all necessary documents and added feedback from my professor. Please let me know if you need anything else.
2-1 Milestone One Feedback:I thought you did a very good job on this first portion of the milestone project.
Thank you for using the assigned Subject Headings within your paper as required and detailed in the Announcement section of our class. We will build upon these sections with the next two portions of the Milestone due in future weeks. Since this project is cumulative, this will provide clarity and organization for the discussion going forward. I will provide the Subject Headings in the Announcements for each of the next two Milestone assignments for you to identify and use within your paper.
Please review the feedback for each section of this paper:
I(A). Describe the Market to which your corporation belongs, identifying the products or services your corporation sells, and the share of the market it has. I thought you did a good job in this section discussing MSFT. You provided oversight into their markets, and identification of products and services that Microsoft has to offer its corporate, educational, health and individual customers. Please add the discussion on the market share as required.
I(B). Describe the Customer Base of your corporation and the top competitors for this customer base. Be sure to consider what motivates the customers and the challenges the organization faces in retaining the customer base. In this section you identified the base of MSFT customers which again can include individuals, businesses, educational, health care institutions, and Governments. Management must continue to analyze and manage the individual motivations of each of these customers. Management must continually consider the motivations in terms of their needs for improved software and services. What are the main challenges for MSFT in keeping their customers?
I(C). Describe the key inputs and sources of those Inputs used to create the products or services as well as the key. What are the Resources for corporate operation (such as staff, facilities, technologies, etc.) and the extent to which attaining all these resources presents a challenge to the organization? I thought you did a good job in this section. Key inputs and resources for MSFT would include all their employees, the various offices and facilities, the research and development, software, hardware, and other services. Management must again identify and manage the various challenges that exist for Microsoft and manage the challenges to obtaining these resources. Customers, investors, competitors, and the personnel of Microsoft will demand innovations which in turn drive new products, services, and technologies. Are there any areas for concern?
I(D). Analyze key Market Trends and issues within the industry for potential risks to the organization. Trends can include both trends within product and service cycles as well as trends in the financials for Microsoft. Management must be aware of both types of trends for Microsoft and trends for their competition and the markets within the industry. Management must be mindful of the current and future trends and how to predict and capitalize on them! Management must be aware of risks that continue to pose threats or create opportunities for the company in the near and future term.
II. Financial History: The next section of your report should focus on the financial history and capital structure of your Organization.
II(A). Quantitatively analyze three years of the corporation’s finances using the provided Excel template. Submit the excel template with your report and may embed pieces of the Excel template into your report to show key financial highlights for the following section. Please note that, for this assignment, you only need to complete the “Financial History” tab in the spreadsheet. You provided the 3 years of corporate finances within the Excel as required.
II(B). Summarize the Financial Highlights you determined from the analysis in the Excel template, explaining the significance of the key ratios for the overall financial health of the organization. This section was too long and should be edited to discuss a few key financials! Nonetheless, I thought you did a very good job in this last section discussing some of the key financials for MSFT. Managers must look to the Income Statement, Cash Flow and Balance Sheet for key ratios that help drive and guide Management in making financial decisions. We must be concerned with these ratios, the trends and whether the numbers are improving or declining. These ratios again guide management and investors about areas of the company’s strength and areas of concern.
Conclusion: I noted the citations supporting your work. Please make sure to update these sections in the final paper with the feedback that has been offered. Please make sure to review the attached grading rubric for further details. Brian
5-1 Milestone Two Feedback:I thought you did a very good job on the 5-1 Final Project I–Milestone II–Capital Structure and Valuation for your company, Microsoft (MSFT). Thank you for using Subject Headings in your paper. I thought your submission was organized, informative and easy to read.
Next Step: Please combine my feedback from this and the first milestone project into your final polished milestone paper due at the end of week 7!
Please review the following feedback on your paper:
In Section III (A): Capital Structure Overall: Good job introducing Capital Structures and the various ways to fund the business at Microsoft. This includes funding a business through equity, debt, or combinations thereof.
In Section III (B): Capital Structure: Dividend Policy: You provided a good discussion here regarding Microsoft’s dividend policy, but you can also add the dividend and the yield. You discussed the importance of the policy to investors. Dividends return profits and capital back to the shareholders. Alternative use for capital in addition to the payout of dividends, is to use retained capital for growth of the company, pay down debt and/or repurchase shares through a buy-back program thus enhancing corporate values.
In Section III (C): Capital Structure Relationship: You provided a good analysis in this section for Microsoft. The relationship between capital structure, cost and risk is important as every company has their own capital structure. The relationship between capital structure, cost and risk is important and management needs to be mindful of the relationship on a continual basis.
In Section III Capital Structure Maximize Value: It is essential that Microsoft and every company strives to maximize shareholder value, which is the primary duty of management. This can be done by maximizing the efficiency of their capital structure and the return of value to shareholders by increasing profits resulting in higher stock prices and higher dividends payouts among other options. However, we do see a shift in this perceived duty of Management as we see companies are now starting to embrace a more community focus along with their duty to shareholder value.
In Section IV (A): Valuation Current Value: You provided the current market value for Microsoft as required. Market value can be computed by multiplying the current share price with the number of outstanding shares. The current value is $2.49T.
In Section IV (B); Valuation Current Assumptions: Make sure to discuss the “reasonable” future growth projections for Microsoft as required in the final paper. Assumptions can be based on historical data, trends, and combinations of the two. Managers must constantly reevaluate these forward-looking projections considering these external and internal risk factors. Many companies are still experiencing the impact to their continuing valuation assumptions. However, I thought you did a good job in this section and provided the “reasonable” valuation assumptions as required.
In the Last Section, IV(C): Valuation Current Estimates: You provided the current estimate of corporate value as identified within the excel worksheet and provided a very good discussion for the key ratios of EVA, NPV, IRR, and MIRR. It is important to consider what and why management should consider the ratios for EVA, NPV, IRR and MIRR! It is important to identify what these ratios are, why management should consider them, and what these ratios tell them about the health of their business!
I noted the required citations supportive of your work. Please make sure to review the attached grading rubric for details.
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