Financial Management: Valuation Techniques and Investment Appraisal

Financial Management

Contents
INTRODUCTION...........................................................................................................................................4
QUESTION 2.................................................................................................................................................4
Mergers and takeovers............................................................................................................................4
b. Critically discuss the problems related with the valuation techniques and provide recommendations
.................................................................................................................................................................6
QUESTION 3.................................................................................................................................................7
a. Calculation of different investment appraisal techniques such as pay back period, ARR, NPV and IRR
.................................................................................................................................................................7
b. Limitations and benefits of different investment appraisal techniques............................................13
CONCLUSION.............................................................................................................................................15
REFERENCES..............................................................................................................................................16

INTRODUCTION
Financial management is the method of having to take care of all funding associated
operations that an entity conducts in order to achieve defined business goals. It's
concentrated primarily on applying operational concepts to all the investor's numerical resources.
Potential budget criteria for activities may be calculated with both the assistance of it. To ensure
that all the processes connected with it have been carried out consistently, it is very essential for
supervisors to thoroughly review final statements so that decisions can be made for the potential.
Questions two and three are chosen to complete this Analysis (Antonopoulos and Hall, 2018).
This report will address a number of subjects like market valuation of other takeover
organisation, possible changes in corporate and short-term impact on Aztech Company. In
addition, measurements are also performed in this plan with the aid of various portfolio
evaluation methods together with their benefits and drawbacks.
QUESTION 2
Mergers and takeovers
Price earnings ratio: The profit-to-earnings ratio (PE Ratio) is the calculation of the stock
price compared to the company's total net profits per share. PE ratio indicates energy needs from
investors for a stake in a company. A high PE ratio usually implies higher demand, as companies
expect expected earnings development. Furthermore, it shows how the consumer appreciates an
inventory. In certain cases, companies that use a large price-earnings ratios are seen as equities.
It generally suggests that stakeholders have high hopes for potential increases in profits and will
be able to contribute extra to those because it implies a positive potential activity. In certain ways
companies with a low price-earnings ratio are perceived to have underrated assets of their own.
Typically this ensures the product selling price is extremely low. An entity with such a non-P / E
ratio is usually, aside from potential service, a warning of a low existing.
Aztec P/E ratio 3.89 / 0.21 18.52
Trojan Plc 40.4 / 147 27.48
Share price of Trojan Plc 18.52 * 27.48 5.08
Total market value 147 * 5.08 746.76