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Entrepreneurial Finance: Final Assignment

The document is the final assignment for the Entrepreneurial Finance course presented by Violetta Kotviska to Professor Julia Sokolova. It includes 4 case studies analyzing companies' financial performance and valuation. Case 1 compares accounting assumptions. Case 2 calculates economic value added. Case 3 analyzes working capital management and profitability. Case 4 values a company based on competitors' multiples. The assignment applies concepts of finance to evaluate business ventures and investment decisions.

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159 views9 pages

Entrepreneurial Finance: Final Assignment

The document is the final assignment for the Entrepreneurial Finance course presented by Violetta Kotviska to Professor Julia Sokolova. It includes 4 case studies analyzing companies' financial performance and valuation. Case 1 compares accounting assumptions. Case 2 calculates economic value added. Case 3 analyzes working capital management and profitability. Case 4 values a company based on competitors' multiples. The assignment applies concepts of finance to evaluate business ventures and investment decisions.

Uploaded by

Виолетта Котвицкая
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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EU Business School

Academic Year 2020-2021

Entrepreneurial Finance
Final Assignment

Presented To: Professor Julia Sokolova


Presented By: Violetta Kotviska
Case 1

A)

B)

C)
The assumptions that were taken in the past 2 question differ in the values that were
considered constant where in A, with the growth rate calculation considered, the
shareholder’s equity was considered unaffected. Meanwhile, the change in profit margin
affect the shareholder’s equity as well as the net income which is shown through the
retention aspect.
Case 2

A)

B)

C)

D)

Based on the positive calculated EVA, the company’s investment can be considered as
generating value so the venture has built value.
Case 3
A)

In 2018

In 2019

B)
In 2018

In 2019

C)

D)
Asset-wise, the firm can aim on reducing accounts receivables with increasing cash
transactions. Concerning working capital restructuring, inventory reduction can be
applied due to the fact that the inventory capacity has increased in the 2 years despite
the fact that the sales have decreased which is present in the inventory turnover rate.
E)
The firm can consider returning to its initial 2018 cost of goods because this reduction
might have led to product quality reduction which led to sales decrease greater than the
cost decrease.

F)
Redistributing the distribution of loans priority can be the company’s main focus due to
the fact that cost of goods have decreased despite the increase in long-term debt. This
can be counted by another smaller loan to readjust the cost of goods and it is made up
by the restoration of sales.

G)
Possibilities for rework can be found with the increase in assets which gives room for
maneuverability in the aim of regaining sales, this is also strengthened by the
maintenance spending increase and the development of several sectors which shows
hope in the restoration of stability after the issue of the deteriorated sales is handled.

Hence, the larger asset size and the added development expenditure accompanied with
the restoration of sales can bode for greater profit in the end than that of 2018.
Case 4

A)

B)

C)
D)
For WestTeck (from high to low):
Based on NorthTeck (highest)

Based on EastTeck

Based on average

Based on Southteck (lowest)

E)
For WestTeck:
Based on Northteck: (highest)

Based on EasTeck
Based on average

Based on SouthTeck (lowest)

F)
Based on SouthTeck (highest)

Based on average/EastTeck

Based on NorthTeck (lowest)

G)

H)
The selling price can be better with taking the top-line valuation multiples into account
due to the fact that most of the competition (2 out of 3) is above average in all the ratios
that were calculated in the previous questions.

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