Corporate Finance of Bellway Plc : Report

Added on - 21 Jul 2020

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CORPORATE FINANCE
Table of ContentsINTRODUCTION...........................................................................................................................11. A very brief statement of opting Bellway plc........................................................................12. Back ground and overview of organisation............................................................................33. A discounted cash flow analysis.............................................................................................44. A multiples valuation, for example using price earnings ratios..............................................55. Valuation methods..................................................................................................................66. A value based on the balance sheet.........................................................................................87. Other methods which occur provides additional insights in to the value of organisation......88. A comparison of the different methodologies.......................................................................109. A forecast subject to share price will be on 1 Dec 2018.......................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONCorporate finance is a vast concept which is considered in organisational contextessential for evaluating the performance and growth in statistical form. Corporate financebasically deals with the capital structure and format of organisation in terms of managing thebusiness functions and management in effective manner (Brealey and et. al., 2012). Corporatefinance basically helps to enhance the value of organisation and helps to elaborate essentialaspect which remain associated with financial position, presentation of financial statements oforganisation. This is considered as a tool for managing the resources and the management offinancial resources with in the organisation. There is an organisation opted name as Bellway Plcand critical analysis done in various dimensions. Moreover, the essential aspects are consideredto make effective finance plan and forecast. This analysis basically helps to consolidate all theessential information and data in respect of making the financial projections and expectation.This is one of the essential aspect in terms of corporate finance and analysing financialinformation of organisation.1. A very brief statement of opting Bellway plcBellway plc is working in the UK business environment over 70 years for home buildingexperience and growing from local north east of England. Many families are getting benefitsfrom services provided by organisation. There are some positive aspects are consideredfavourable in respect of building positive image in respect of selling homes and residentialproperties. As per past recorded there is a 10.6% increment was recorded in last few years.Organisation also won the 5 star homebuilding status by the Home Builder Federation (HBF).As per the last years financial reports it is recorded that organisation sold 9644 homes in2016/17 and generated the income of £136.6 million in dividends. It has a strength of 2544employees who are regularly proving their services to lead the organisation towards desired aimand targets (Huang and Kisgen, 2013).1
(Source:Profitability graph of Bellway Plc, 2018)As per above graphical representation the revenue graph may be analysed in variousterms. There are five year's growth statistics are presented in graphical form which showsincreased results in terms of analysing the profitability. As per last year results it is seen that therevenues were recorded as 14.19% form 2.24 Billion to 2.56 Billion and net income raised by12.70% from 402.90 million to 454.06 million. Gross profit margin is calculated as 25.89% andnet profit margin was calculated as 17.86% and operating margin was calculated as 22.42%.return on assets were recorded as 15.36% and return on equity was recorded as 22.71%. apartform it return on investment are recorded as 21.74%.growth rate is also present the favourable aspect in terms of analysing the financialperformance of organisation. Earning per share without including extraordinary items, growthwas recorded as 12.96% and the 12.52% are considered respectively. Trends presents thepositive results and outcomes in terms of growth and development of organisation. Dividendpayment was made as the construction services industry are considered as a dividend (Hillier andet. al., 2014). Pay out ratio was measured as 33.28%, dividend growth rate in terms of 5 yearswere recorded as 43.5% and dividend yield method was measured as 0.04% for last five years.It is considered that the organisation is evaluating the organisation generated cash flow atBellway Plc fell down by £13 million and it earned approx £153.11 million from the operations2
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