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Project Report: Finance

Added on - 16 Mar 2020

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Running Head: Finance1Project Report: Finance
Finance2ContentsIntroduction.......................................................................................................................3Company overview...........................................................................................................3Debt valuation...................................................................................................................3Share valuation.................................................................................................................4Cost of capital...................................................................................................................6Market analysis.................................................................................................................8Conclusion........................................................................................................................9References.......................................................................................................................10
Finance3Introduction:Investors are the key part of an organization. These stakeholders assist anorganization to raise the funds for betterment of the company. Investor must go through theentire related details before making a decision about investing in a particular company or theindustry/ In this report, FLIGHT CENTRE TRAVEL GROUP LTD has been taken into theconsideration to understand that how a company could be analyzed through analyzing varioustechnique and methods. For identify the worth of the business, debt valuation, share valuationtechnique, intrinsic price of the shares, WACC, share analysis, cost of capital etc studies havebeen done. Through these calculations, it has been identified that whether the investors mustinvest into the company or not and if the investors would invest into the company then howmuch return could be got by the investors.Company overview:FLIGHT CENTRE TRAVEL GROUP LTD is an Australian company. This companyis the biggest retail travel outlet in the Australian market. Head quarter of the company is inBrisbane, Australia. This company has listed itself in the Australian stock exchange in 1982.The turnover of the company is around $ 20 billion (Home, 2017). This company is currentlyemploying 20,000 people. Around 2,800 stores have been owned by the company in variouscountries and the performance of the company is stunning.Debt valuation:FLIGHT CENTRE TRAVEL GROUP LTD’s annual reports have been analyzed toidentify that how the company raises the funds. In this study, the short term and long termdebt of the company has been analyzed initially. The short term and long term debt of thecompany is as follows:FLIGHT CENTRE TRAVEL GROUP LTD20172016201520142013Long term debt00023Short term debt5677334344(Morning star, 2017)Further, the industry’s data has been analyzed. The following are the short term andlong term debt of the competitivecompany of FLIGHT CENTRE TRAVEL GROUPLIMITEED.
Finance4HELLOWORLD TRAVEL LTD20172016201520142013Long term debt6358282733Short term debt00012(Morningstar, 2017)Through this analysis, it has been found that the debt structure of FLIGHT CENTRETRAVEL GROUP LIMITED is not at all consistent according to the industry standards.Through the analysis over company and industry’s debt, it has been found that theother companies in the industry are focusing more on the long term debt while the companyis focusing on short term debt. At the same time, the increment rate of concerned company ofdebt is less than the industry rate.The cost of debt of FLIGHT CENTRE TRAVEL GROUP LIMITED is 0.0263 whichexpress that the company have to pay total 0.0350 parts to the debt holders in terms ofinterest.Calculation of cost of debtOutstanding debt0interest rate5%Tax rate0.3Kd0.0350(Bloomberg, 2017)Thus, through the debt valuation study of the company, it has been analyzed that theperformance of the company’s debt is different from the industry. But the performance of thecompany is depicting positive influences. It has also been analyzed that the total cost of debtof the company is 3.50%.Share valuation:Further, share valuation study has been performed over the company to analyze theperformance of the company in terms of total expenses and the capital structure. The currentcost of equity of the company is 4.7041% which depict that the company has to pay total4.7041% to the shareholders in terms of dividend.Dividend Discount ModelDividendexpected0.017505805Growth rate5%
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