Financial modelling n data analysis project2:company valuation
This is a stage two paper in New Zealands university. Its a finance paper.
Instructions for the Project
Students will be required to develop a company valuation model using the discounted cashflow valuation method for a company they will be assigned. The model should contain:
Financial statements that are forecasted 5 years into the future based on 5 years worth of past information. (Balance Sheet, Income Statement, Cashflow Statement)
The statements should consolidate insignificant items and impose a uniform format on the past 5 years worth of financial information
Assumptions made in forecasting the future should be identified and justified with reference to past financial information, other annual report information and any other information sources that the student deems important.
All assumptions made by the student should be reasonable
The model should also contain opportunities for the user to change key inputs to assess the impact on the firms value
The model should accurately compute the weighted average cost of capital and beta with the option of allowing users to alter the period and frequency of the beta using in the calculation of the WACC (i.e. one year weekly data vs 5 year monthly)
Accurately employ the Free Cashflows formula to compute the cashflows for the next 5 years and based on those use the Discounted Cashflow methodology to compute the value of the company
Model should contain a summary page that brings together key inputs and outputs
The valuation model should conform to the rules of good financial model design.