Problem Statement:

1. Rise and fall of company

2. Stock price – start and now
3. Analyse market forces that drove the company’s price
4. In this project
a. Look at the company capital structures
b. Company’s valuation
c. Also justify the price quoted by reliance for purchase

Objective

1) Understand and analyse the capital structure of FR and the reason for its debacle.
2) The arrive at the valuation of FR and Via -a -via price offered by acquiring company

Methodology

a. 1stobject
a. To analyse the key finance parameters & ratios like
i. Debt equity ratio
ii. Working capital ratio
iii. Cost of capital deployed
iv. Liquidity situation

B. 2nd object

1. Free cash flow methodology

2. ???

1. All financial data

2. Analysing the business model of future group
3. Operation & performance for the last 5 year
4. Competitor performance to set a median
5. Regulatory climate for retail (??)
6. Consolidate cash generating assets of FR
7. Calculate discount rate
8. Risk free – 5 years
9. Beta
10. WACC
11. Final valuation
12. Discounted cash flow if wacc
13. Last 2 points