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QQMB 314 Financial Statement Analysis, 2025: Individual assessment

Write a persuasive and professional analyst report based on discounted cash flow valuation method for a company of your choice.  

1. Propose a buy/sell/hold recommendation for your chosen company based on a discounted cash flow valuation.

· Choose a forecast horizon and forecast free cash flows.

· Estimate a WACC for your company clearly stating and justifying the assumptions.  

· Estimate a terminal value for the company clearly stating and justifying the assumptions.

· Calculate the enterprise or equity value for the company.

50 marks

2. Compare the enterprise (or equity) value obtained using the Discounted Cash Flow (DCF) method with the valuation derived from the Comparable Multiples approach (as completed in Part 6 of Coursework 1). Discuss the similarities and differences between the two methods and critically evaluate which method you consider more appropriate for your chosen company, providing clear reasoning to support your conclusion.

20 marks 

3. Discuss two key challenges you encountered while performing the discounted valuation. Explain how you addressed or overcame each challenge, providing specific examples or reasoning where appropriate.

30 marks

Notes:

1. This is an individual assessment. Your submission must be your own work and must not be identical to that of your group members. Plagiarism will be penalised.

2. While all students in a coursework team will use the same company as a starting point, each student is required to produce an independent discounted valuation. Your analysis should be based on your own assumptions regarding Free Cash Flows (FCFs), Weighted Average Cost of Capital (WACC), and terminal value.

3. All key calculations must be included within the main body of the report (e.g. WACC, forecasted FCFs, and the DCF model). All assumptions must be clearly explained, linked to the numerical values and justified. The quality and justification of your assumptions are a key element of assessment. Please note that the appendix carries no marks; any analysis or reasoning placed there will not count towards marks.

4. All data sources and detailed calculations should be indicated in the appendix. As Excel spreadsheets can be difficult to interpret, please ensure your workings are clear and easy to follow. For example, state explicitly: “Beta has been chosen from source XYZ and it is 1.19.” The information provided should allow the marker to reproduce your Enterprise Value (EV) calculation.

· The report must not exceed 5 pages.

o Penalties apply if you exceed : -3 for each extra page.

o The appendix will not be marked.  

o The full report must have a minimum font size of 12 (does not includes tables, footnotes, graphs)

o Page limit does not include a cover page, table of contents, bibliography and appendix. 

·  Report due date: by 10a.m., 8^th January 2026