According to the annual reports of the two companies, Fisver and Gloabal payment, please answer the following valuation analysis questions: (note: Historical stock quotes: https://finance.yahoo.com/quote/FISV/history/ Historical stock quotes: https://finance.yahoo.com/quote/GPN/history/).
– Valuation analysis
o Limit your numerical valuation analysis to P/E, P/B, P/S, P/CF
o Comments regarding the relative multiples between the companies
▪ Hypothesesregardingreasonsfordifferences
▪ Hypotheses regarding how you expect multiples to change prospectively given your
understanding of the businesses
▪ Multiples are too low? Too high? About right?
o Do not try to create a DCF analysis
o Max 4 pages
– Trending in stock prices, dividend yield, earnings yield (inverse of P/E ratio), holding period return and
payout ratio as well as any comments and observations you have.
– Financials and calculations
o Include
▪ Raw (“as reported”) financial statements (income statement, balance sheet, cash flow
statement)
▪ Standardizedstatements
• Is it useful to include some comparative analysis?
▪ Common size statements
▪ Indexnumbertrendanalysis
▪ Ratios
▪ Segmentanalysis
▪ KPI and custom metric analysis
o Think about where to best include the above ▪ Body of reportor Appendices?
Required Appendices
In addition to any appendices you feel are appropriate to include, include the following:
Appendix A
– Summary of accounting adjustments and/or adjustments made for purposes of calculating ratios.
o Identify any potential adjustments and also incorporate them into your calculations
▪ Be sure to clearly identify which calculations incorporate adjustments and illustrate the adjustments you have made
o Max 6 “unique” adjustments (although there may be none). Consider materiality, make the most important adjustments, up to 6.
▪ Regarding “unique”: Adjusting for a certain item in 2017 and 2018 counts as 1 unique adjustment (not 2 adjustments).
Here’s some breakdown of the assignment in order to understand:
Valuation Analysis:
1. Conduct a numerical valuation analysis considering:
a. Price-to-Earnings (P/E) ratio
b. Price-to-Book (P/B) ratio
c. Price-to-Sales (P/S) ratio
d. Price-to-Cash Flow (P/CF) ratio
2. What are the comments regarding the relative multiples between the companies?
3. What are your hypotheses regarding the reasons for the differences in these multiples?
4. How do you expect these multiples to change in the future based on your understanding of the businesses?
5. Are the multiples too low, too high, or about right?
Maximum of 4 pages of questions 1-5
6. Trending in stock prices, dividend yield, earnings yield (inverse of P/E ratio), holding period return and payout ratio as well as any comments and observations you have.
7. Financials and Calculations:
o Include
▪ Raw (“as reported”) financial statements (income statement, balance sheet, cash flow statement)
▪ Standardizedstatements
• Is it useful to include some comparative analysis?
▪ Common size statements
▪ Indexnumbertrendanalysis
▪ Ratios
▪ Segment analysis
▪ KPI and custom metric analysis
8. In addition to any appendices you feel are appropriate to include, include the following:
Appendix A
– Summary of accounting adjustments and/or adjustments made for purposes of calculating ratios.
o Identify any potential adjustments and also incorporate them into your calculations.
▪ Be sure to clearly identify which calculations incorporate adjustments and illustrate the adjustments you have made
o Max 6 “unique” adjustments (although there may be none). Consider materiality, make the most important adjustments, up to 6.
▪ Regarding “unique”: Adjusting for a certain item in 2017 and 2018 counts as 1 unique adjustment (not 2 adjustments)
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