- 04 Apr, 2021
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Nike
The report should address the following points. Use your judgment regarding whether the answer should be contained in the written document or the Excel file. For example, while the written document may contain tables, the valuation should be contained in the Excel file.
1. Firm introduction
In a couple sentences, describe each of your companies’ business models
What are the comparative advantages of your firms (narrative sections of 10K’s will have clues about that)
2. Executive summary. Is the firm under- or over- valued? What are the main drivers of your conclusion
3. Firm characteristics
State the following information for the firm’s five most recent annual reports, in millions of dollars:
Revenues
Operating income (EBIT), which must be positive for each year
Depreciation and amortization
Capital expenditures (actual cash payments)
Total current assets
Total current liabilities
State the most recent values for the following information:
Book value of debt (in millions of dollars)
The sum of cash, cash equivalents, and marketable securities (in millions of dollars)
Number of shares outstanding (in millions of shares)
Current market price per share
Risk free rate
Beta
Credit rating
In the appendix include screenshots of the web pages that list:
Beta
Credit ratings
4. Cost of capital calculation
Report the estimated default spread
Report the estimated cost of debt
For equity, debt, and capital, report the following:
Market value (in millions of dollars)
Weight in cost of capital
Cost of component