Deadlines
- Final project due: Thursday, Dec 20 by 6 PM.
[You will get your final grade by January 7.]
Project
You must work in teams of four students.
Teams also have the right to eject a team member if he/she is not contributing to the team. You have to let me know quickly if such dysfunctional behavior is occurring. Anyone ejected from the team will get an automatic C for the entire course regardless of his/her performance on the assignments and the final exam. At the end of the project, you should let me know via email if someone in your team did not contribute their fair share to the team effort.
50% of your course grade is based on the final project.
You are required to forecast the cash flows for the next three (or five) years
for the assigned company and a terminal value at the end of the forecast horizon. You should then condense it to final valuation for the company.
You
must use the documents provided below so that we can all use the same page
refererences. The deliverables for each company include the following:
- All files should be labeled with the last names of your team
members followed by the company name. You are required to submit
one Excel file and one Word file for each company. I will deduct
five points if you fail to do so.
- An ability to view three scenarios: "Normal," "Optimistic," and "Pessimistic"
- Please stick with the labels below. They will make it easier for
me to understand your worksheet references.
- Worksheet
1 labeled "AS" showing
ALL your assumptions about the company in the future. Write your group names
at the top of the worksheet. List the five critical assumptions first. Critical
assumptions are those assumptions that have the largest impact on the forecasted
cash flows.
- Worksheet 2 labeled "CFS" showing next three years
of US GAAP cash flow statements and enterprise free cash flows
- Worksheet 3 labeled "BS" showing next three
years of US GAAP balance sheets
- Worksheet 4 labeled "IS" showing
next three years of US GAAP income statements
- You can include any other supporting worksheets, but I will not
read them.
- A three-page writeup justifying your model, assumptions, and
any adjustments you made to the financial statements
- No quarterly forecasts are required.
Grading
I will consider the following factors in assigning you a grade.
- What your teammates say about your contribution to the team effort.
- Conceptual clarity and correctness of your model: 40%
- Quality of your writeup justifying your assumptions and adjustments:
40%
- Professional look of the spreadsheet and the writeup, on-time
submissions: 20%
- Each team member should be familiar with all aspects of both models.
I reserve the right to call on a team member to verify his/her knowledge
of the the model.
Suggestions
- You should check the reasonableness of your earnings forecasts by checking
analyst forecasts available on Yahoo and elsewhere.
- You should look at past trends if available.
- Listen to conference calls to identify key drivers.
Reports
You must use the documents provided in the course folder so that we can all use the same
page refererences.