問題一覧
1
Other acceptable sources of information include
1. news article 2. reports from industry organization 3. reports from regulatory agencies 4. industry researches done by independent firms such as Nielsen or Euromonitor
2
Red flags that may indicate aggresive accounting include: (PERMMEHEMH)
1. Poor quality of accounting disclosure 2. existence of related-party transactions 3. reported disputes and or changes in auditors 4. material non audit services performed by audit firm 5. management and/or directors’ compensation tied to profitability or stock price. 6. economic, industry, or company-specific pressures on profitability 7. high management turnover 8. excessive pressure on company personnel to make revenue 9. management pressure to meet debt covenants 10. history of securities law violation
3
Forecasting financial performance can be looked at two lenses:
1. macro-perspective (viewing economic environment and industry) 2. micro-perspective (firms financial and operating characteristics)
4
Two approaches of forecasting
1. top-down forecasting 2. bottom-up forecasting
5
Starts from international or national macroeconimic projection.
Top-down forecasting
6
Common variables in topdown forecasting (GIFIC)
1. GDP forecast 2. consumption forecasts 3. inflation projections 4. foreign exhange currency rates 5. industry sales and market shares
7
Forecast starts from the lower levels of the firm and is completed as it captures what will happen to the company based on the inputs of its segments/units.
bottom up forecasting
8
Are considered in the forecasting process in order to make valuation approximate the true reality of the firm.
qualitative factors
9
Forecasting should be done comprehensively and should include:
1. earnings 2. cash flow 3. balance sheet forecast
10
Two common models in selecting the right valuation model
1. discounted cash flow model 2. comparable company analysis
11
Two aspects to consider in preparing valuation model
1. sensitivity model 2. scenario modelling
12
It is a common methodology in valuation exercises wherein multiple analyses are done to understand in an input or variable will affect the outcome.
sensitivity analysis
13
Assumption commonly used as an input for sensitivity analysis (SDG)
1. sales growth 2. gross margin rates 3. discount rates
14
For firm-specific issues that affect firm value that should be adjusted by analysis.
scenario modelling
15
Scenario modelling include: (CAI)
1. control premium 2. absence of marketability discounts 3. illiquidity
16
Refers to additional value considered in a stock investment if acquiring it will give controlling power to the investor.
control premium
17
Means that the stock cannot be easily sold as there is no ready market for it.
lack of marketibility discount
18
Should be considered when the price of particular shares has less depth or generally considered less liquid compared to other active publicly traded share.
illiquidity discounts
19
Can also be considered if an investor will sell large portion of stock that is significant compared to the trading volume of the stock.
illiquidity discounts
20
The analysts and investors use the results to provide recommendations or make decisions that suits their investment objective
applying valuation
21
Key principles in valuation (6) (TCMTTL)
1. time specific 2. cash flows 3. market 4. tangibles 5. transferrability 6. liquidity
22
Refers to the possible range of values where the real firm value lies
uncertainty