ipl-logo

Cash Flow Analysis Essay

1358 Words6 Pages

The past few years have seen a remarkable transformation in the Indian Shopping industry. E-commerce has taken the retail world by storm as can be deduced from the rising number of businesses adopting the electronic route with various distribution and commercial models. The rapid growth of the industry has seen firms reach multi-billion dollar valuations within a few years of their establishment. The e-commerce sector has grown by approximately three times over the past four years and market estimates indicate that it will further grow about five to seven times in the forthcoming years. Online retail, though just a small fragment of the e-commerce industry, is one of the fastest growing segments. Logistics and infrastructure have grown multi-fold …show more content…

This method involves identification of free cash flows in and out of the company and estimation the Net Present Value of these cash flows. The DCF Analysis usually employs two methods to determine the net worth of a company: (a) the Adjusted Present Value (APV) method, and (b) the Weighted Average Cost of Capital (WACC) Method Comparable Transactions Method When the net worth of a company is estimated at the time of a merger or an acquisition, one of the most commonly used practices to arrive at a value is to compare the transaction with other transactions that have taken place in the concerned sector over the past few years. While using Comparable Transaction Method, we identify a key parameter such as Gross Merchandise value (GMV), annual revenues or multiples of earnings before interest and taxes (EBIT). Using this key valuation parameter is, the companies under consideration can be compared and the valuation of the company may be determined by using suitable …show more content…

The Market Valuation approach is used to determine the value of a firm by comparing the frim concerned with other organizations in the same sector, with similar operations, similar prices and volumes of goods or services traded. Though similar to the Comparable Transactions Method in many respects, it is generally preferred over the latter in case of real estate estimation. The market capitalisation of the firm is calculated using the prevailing market price of shares and the volume of shares traded. By comparing the market capitalisation of the firm with that of the other frim, the net worth can be estimated by using suitable

Show More
Related

  • Summary Of Phoenix And Thunderbird Merger

    651 Words  | 3 Pages

    Although professor X, investor VC, and UND all had common ownership in Darwin and Thunderbird before the merger, none of them were identical owners and controlled the companies indeed before the merger. Hence, Phoenix should account for its acquisition of 100 percent of equity interests in Darwin and Thunderbird as a business combination. For the reasons noted above, since Professor X controlled Phoenix before the merger but did not control the combined entity after the merger, this merger is substantive and is not under common control. Additionally, the shareholder ownership percentages of Professor X, investor VC, and UND were not similar before the merger or after the merger. Therefore, Phoenix should not account for its acquisition of

    Read More

  • Dollarama Company Case

    990 Words  | 4 Pages

    This is the measurement of the levels of investor confidence which influences the value of a firm in the

    Read More

  • Case Study: Dollar General

    760 Words  | 4 Pages

    The only advantage of this method is its simplicity. Disadvantages would be that it doesn’t consider the future performance of a company and that it’s subjective because truly comparable companies rarely exist. In the case of Dollar General, the Multiple method doesn’t show an appropriate value because it doesn’t consider its special business model. All these “comparable” companies are just part of the same industry which doesn’t make them truly comparable companies.

    Read More

  • Calaveras Vineyard Case Study Solution

    1061 Words  | 5 Pages

    The total value of the firm has been calculated with the help of PV of cash flows and the continuing value and it shows an amount of

    Read More

  • Analysis Of Chipotle's Sensitivity Analysis

    1385 Words  | 6 Pages

    Sensitivity Analysis The sensitivity analysis focuses on examining how Chipotle’s valuation changes when some key inputs vary. Two of the most important inputs of the valuation are the weighted average cost of capital (WACC) and the perpetuity growth rate. In this thesis, it is assumed that Chipotle would have a WACC of 6.65% and a perpetuity growth rate of 2.84%, which would result in a share price of $443.90 for Chipotle.

    Read More

  • Financial Analysis Of Cango Essay

    813 Words  | 4 Pages

    The Financial Analysis-Efficiency Ratio, and a Profit Margin at the end of the month or quarter to shows the management team how Congo’s Receivable Turnover and Inventory Turnover ratio percentage allows CanGo to overview what the profitability from sales and see what percentage of net income are. This report is needed to improve their sales and reduce inventory. The .28 will let management know that CanGo inventory rates needs to increase by using the FIFO inventory system to move product and have less overstock products. This will eliminate old inventory along with keeping track of top selling items.

    Read More

  • Acc 201 Final Project Part 1 Accounting Cycle

    1187 Words  | 5 Pages

    ACC 201 Final Project Part I Accounting Cycle Report Vanessa Ann Williams Southern New Hampshire University The accountant cycle has really impacted me to gain insight on the financial side of Peyton Company. In the accountant cycle, there are many particular directions involve determining the growth of the company such as steps, role, omission and financial statements. It’s important to apply every step from the accountant cycle to make a financial critical decision in the long run. This report will have a breakdown of how to apply the accountant cycle for Peyton Company to be aware of future financial decisions to keep the company holding strong.

    Read More

  • Value Proposition Of Fitbit

    1808 Words  | 8 Pages

    This is the comparison of the benefits offered by a company's product to its customers relative to the price it asks customers to pay. To do this, companies can influence the value proposition in one of two ways mainly. This can be done through long term brand building. They can also offer a relatively low cost to enhance value. Ultimately, the key is that customers perceive that the product's merits exceedingly justify its price.

    Read More

  • Harry Davis Case Study

    846 Words  | 4 Pages

    1) Sources of capital to be included when estimating Harry Davis’s WACC: The WACC is primarily used for making long-term investment decisions that is capital budgeting. The WACC should include the types of capital used to pay for long-term assets like as long-term debt, preferred stock and common stock. Short-term capital consists of account payable, accruals, short-term debts and note payable.

    Read More

  • Advantages And Disadvantages Of Supply Chain Management

    771 Words  | 4 Pages

    These trends logic is that the company is increasingly focusing on those activities in the value chain where it has a distinct advantage, and everything else will be outsourced. This movement is a particular proof logistics

    Read More

  • The Cause And Causes Of Online Shopping On The Internet

    996 Words  | 4 Pages

    Causes According to Amin & Noor (2013), the E-consumers generally refer to the purchaser of goods and services over electronic systems such as Internet and other computer networks. This new group of consumers is increasing in number over the years as on-line shopping become a trend and manifestation of modern life style. Based from the Paynter & Lim (2001), E-commerce would provide consumers with benefits such as interactive communications, fast delivery, and more customization that would only be available for consumers through online shopping. Product information in the Internet is more compact and it ranges from various sites.

    Read More

  • Impact Of E Commerce On Consumer Behaviour

    1462 Words  | 6 Pages

    Since the beginning of the 1990’s, e-commerce has radically changed consumer behaviour by introducing new retail channels (Ngai and Gunasekaran, 2007). Serious attempts to trade online started to emerge in the mid-1990s wheninnovative, technically savvy companies responded to the opportunities and challenges posed by the internet, to develop sophisticated web sites to serve customers, in their homes (Rayport and Sviokla, 1994). The present retail environment is characterised by new, store and non- store, retailing formats, a wide range of new products, use of new information and communication technologies and consequently, the changing customer needs. Moreover, the dynamic lifestyle conditions of consumers has resulted a change in their personal environment that contributes to a profound change in customer behaviour (Schröder and Zaharia, 2008). Retailing in the 21st century means doing business with customers on their terms (Mathwicket al., 2002).

    Read More

  • Essay On Importance Of Financial Management

    812 Words  | 4 Pages

    Financial management “is the operational and financing activity of a business that is responsible for obtaining and utilizing the funds necessary for effective operations. Thus, Financial Management is concerned with the effective funds management in the business process. Finance is interrelated functions which deals with marketing function, production function, Human Recourse function and Research & development activities of the business concern. Financial Management is concerned with the financing, acquisition and management of assets with some overall goal in minds. There are three major areas in Financial Management decision making.

    Read More

  • Benefits Of Online Shopping Essay

    1142 Words  | 5 Pages

    Online shopping has nowadays become a widely spread way of shopping among people on different continents and in different countries. Its popularity is constantly on the rise considering the spread of Internet technologies and the increasing share of online shops in the retailing business. Online shopping activities are gaining wide spread as far as they tend to provide the consumers with numerous benefits and increase the convenience of buying without leaving the house. The popularity of online shopping grows due to a range of reasons, including its convenience as well as time- and money-saving potential.

    Read More

  • Persuasive Speech On Online Shopping

    765 Words  | 4 Pages

    Not only this, great offers and discount coupons are available while shopping on these online retail markets. VARIETY OF PRODUCTS Get all sorts of national and international products without even moving an inch. This is great! Isn’t it? A Chanel’s perfume bottle which is made in Europe will be easily available in any part of India.

    Read More

More about Cash Flow Analysis Essay

Open Document