So far, we have reviewed the 10K statements for Costco, Target, and Walmart on SEC Edgar, using that information to populate the Comprehensive Case Template which has been posted on Blackboard. The template provided an overview of the Balance Sheet and Income Statement from the last two years for each company.
Additionally, we have written cases analyzing their profitability, credit risk, earnings per share, asset management, and related metrics.
In order to start to determine valuation, we must take this historical financial information and use it as the foundation from which we create a financial forecast. For simplicity, we will focus on just Costco Wholesale for this section.
Here are the steps involved in the assignment:
Obtain the Forecast for the Company
o Using the Bloomberg Terminals, obtain the Financial Forecast.
Look up the company ticker in the Equity section of Bloomberg
Go to the Key Stats (1) Tab
Go to the Highlights (11) Tab
This provides a financial forecast that can be used as a foundation or starting position.
Populate the Parsimonious Forecast tab of the Comprehensive Case Template
o Using the Bloomberg Forecast, populate the Sales Growth Estimates section of the Parsimonious Forecast tab.
o Populate the Dividends Paid in the Previous Two Years.
o Using the analysis you conducted previously, populate the Estimate Factors for Net Sales, NOPAT, NOA, and Dividends.
Make any other fine tunings or adjustments you believe to be prudent based upon the analysis you have conducted on the company so far.
Turn in the Parsimonious Forecast and print out from the Bloomberg Forecast.
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