Publicly-traded company: Microsoft
A project in which you analyze and value a publicly-traded company. outline: historical financials (ratios) business and geographic segments, industry growth rates in the given markets competitors, valuate and analyse the financial statement of Microsoft corp.
Forecast the financial statements for the next the years in an excel sheet and show the growth rate and how the forecast has been done. What has caused the growth of the company through out the years. Include important ratios in excel and show the working out,mention some of the recent developments.
The current price (with date) and target price (or range, as shown here), within a time frame (such as one year)
o Key statistics
o Earnings estimates
-revenue types
o Main considerations and risks to the assumptions leading to your valuation.
-Cash Flow Statement
◦ Relation of CFO/CFI/CFF
◦ Relation of CFO to Net Income/Profit
Calculate Relevant Ratios in excel and show working out
Liquidity (to assess short-term risk)
◦ Current Ratio
◦ Quick Ratio (and comparing with Current Ratio)
Profitability (to assess long-term risk)
◦ Gross Profit margin
◦ Operating/EBIT margin (=EBIT/Sales)
◦ Return on Sales: bottom-line return for each $/KD sold
◦ ROA
◦ ROE
Solvency/Leverage
◦ Debt-Equity Ratio – or Total Debt, or Financial Leverage,
since they are all related
◦ Interest coverage (Times Interest Earned) Ratio
(EBIT/Interest)
◦ Also EBITDA Interest coverage Ratio for debt analysis
(EBITDA/Interest)
Activity (for efficiency and to measure the
investment needs due to growth)
◦ A/R, A/P, Inventory Turnover (or Days)
◦ Cash Conversion Cycle
Market Ratios: these provide insight into market expectations regarding the future earnings for a company
◦ Earnings per Share
◦ Price/Earnings
◦ Sometimes the Retention/Payout Ratios are
important for companies with capital needs
Publicly-traded company: Microsoft
And then valuate all the founding and forecasts .
