Inancial Statement Analysis. Financial Statements reformulation and equity valuation.

The assignment is composed from 2 question:
Question 1. Read the recent letter from the Corporate Reporting Users Forum (CRUF) to Sir David Tweedie and Bob Herz, chairs of the IASB and FASB respectively, regarding the current project on performance reporting being undertaken by the IASB and FASB. Using themes developed on the course, discuss the issues raised in the letter and indicate whether or not you agree with the views expressed by CRUF.
For this part I am going to upload the PDF file with the letter; and I am going to upload the syllabus of the course so the question can be answered on the basis of the themes developed on the course.
(40 marks) 800 words

Q2. Given the Smiths Group plc Annual report and accounts for y/e Sept 2007, reformulate the financial statements (balance sheet, income statement and cash flow statement) for the current and for the previous year, explaining any assumptions you have made. Use this information to carry out an equity valuation of the company, explaining any assumptions you have made. Briefly discuss the advantages and limitations of the equity valuation approach you have adopted compared with alternative approaches.

Equity valuation models to choose from are as follows:
Asset Based Valuation Model
Free Cash Flow Model (FCFM)
Dividend Valuation Model (DVM)
Residual Earnings Model (REM)
Residual Operating Income Model (ReOIM)
The equity valuation approach should be chosen knowing that Smiths Group is technology company. It should be stated in the report why certain approach was implemented and its advantages and limitations compared to other appoaches.
Furthermore, I am going to upload the Smiths Group plc annual report and accounts for y/e 2007 and y/e 2006.
(60 marks)-1200 words

Overall word limit is 2000 words. As a guide, it is suggested that you use approximately 800 words on Q1, 1200 words on Q2.