Analysis of financial Statements…
Opening Date Nov 18, 2019
Closing Date Nov 22, 2019
Discussion topic: Analysis of Financial Statements
A fresh graduate from a well-recognized university got a job as a financial analyst in a reputed firm whose responsibility is to forecast and provide an opinion to its valued customers about future and recent investment. The finance manager of the firm wants to ascertain knowledge of the graduate and provided a project for valuation of two companies like Company A and Company B. The main motive of the project is to check the management effectiveness for shareholders’ wealth maximization.
In the past, management valued the decisions about managerial effectiveness for wealth maximization on the basis of Economic Value Added (EVA). Therefore, the graduate focuses EVA because EVA is better to measure managerial effectiveness. The management of the firm provided following information of two startup ventures to graduate
Current stock price (in Rs.)
Total assets (in Rs.)
Total liabilities (in Rs.)
Interest (in Rs.)
Tax (in Rs.)
NET INCOME (in Rs.)
Cost of Capital (in Rs.)
Outstanding share (No)
Calculate Economic Valued Added (EVA) of both Companies.
Based on the calculations, which company will you suggest for investment and why? (Your selection should be supported with logical reasoning)
Note: Complete Calculations for EVA are mandatory; marks will be deducted on providing just answers).
Post your GDB comments (answer) against GDB # 01 rather than against lessons’ MDB.
Your discussion must be based on logical facts.
Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.
Obnoxious or ignoble answer should be strictly avoided.
Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB.
For Detailed Instructions, please read the GDB # 01 announcement.
Best of Luck!!