Seminar paper from the year 2018 in the subject Business economics -
Operations Research, grade: 2,0, University of Auckland (Graduate School
of Management), course: BUSMGT 733: Analysing Financial Statements,
language: English, abstract: Determining the value of a company is a
complex procedure which cannot be automated by any algorithm. This
report investigated the intrinsic value and the relative value of
Kathmandu Holdings Ltd., a New Zealand based company operating in the
retail speciality industry. The valuation was based on the discounted
cash flow model (DCF model) and a market multiple analysis. In this
light, this report used assumptions such as future growth rate, EBIT
growth, working capital, PPE and intangible asset turnover, all of which
were largely affected by micro- and macroeconomic factors. Based on our
calculation of a value per share of $2.72 using the DCF model, Kathmandu
has been slightly over-priced in 2018 (+13 per cent). This result was
supported by the current share price of Kathmandu of $2.50 as of 1 March
2019. The selection of the company used for the market multiple analysis
was based on the industry, comparable size, leverage, profitability and
growth potential. Due to the size of the New Zealand economy and the
nature of the Kathmandu business, the options to choose from were
limited. We compared Kathmandu to The Super Retail Group, a retailer of
automotive, outdoor equipment and clothing, operating in Australia, New
Zealand and China. The NOA multiple of $2.74 suggested that Kathmandu
was slightly over-priced, which was in line with our findings from the
DCF model. Kathmandu Holdings Ltd. is a New Zealand based company
operating in the retail specialty industry. It offers a range of apparel
as well as travel and camping equipment and is a leading retailer in
Australasia. As at 31 July 2018, Kathmandu operates 167 retail stores
across New Zealand, Australia, and the UK. In addition, the premium
outdoor brand is operating through o
