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Free Cash Flow Equity Model - Assignment

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Added on  2020-10-22

Free Cash Flow Equity Model - Assignment

   Added on 2020-10-22

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Free Cash Flow Equity Model - Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1PEST analysis............................................................................................................................1Porter's 5 force............................................................................................................................2CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
Free Cash Flow Equity Model - Assignment_2
INTRODUCTIONFinancial management is any activity that is concerned with procurement, planning andcontrolling of all financial resources of any organisation (Finkler and et.al., 2016). In simplewords it can be said as applying management principles to financial resources in any company.SK Innovation company that was founded in 1962 limited works through its differentsubsidiaries all over the world in energy related business. It mostly operates in Refining andmarketing of petroleum Products, Petrochemicals and Production etc. This company is listed inS&P Global BMI Index. This current project is a stock report of the SK Innovation CompanyLimited in which valuation of stock and value of Equity is calculated as per different methods ofValuation. The Report also presents the recommendations to investors regarding buy, hold or sellof the Stock of SK Innovation.MAIN BODYPEST analysisPoliticalThe business of SK innovation is threatenedand directly influenced via political factor anddecision such as geopolitical situations inmiddle east and presence of political stability.EconomicalThe association among SK Innovation andglobal economy is very important and there ishuge interaction among them. The economicfactors such as global economic crisis, overdebt private and public sector in manycountries of OECD. Presence of differentunfair transaction like violating ethicsregulations and laws, collusion.SocialWith context of these factors reflects culture,migration, income, demography, religion andideological views on basis of issues. Theawareness has been increased and laid specialemphasis on friendly fuels.TechnologicalPresence of technological or innovative tomarket such as:Shortage of skillUncertainty over returns1
Free Cash Flow Equity Model - Assignment_3
Insufficient fundingStringent regulationsCost of developmentPorter's 5 forceThreat of new entrantsThere is requirement of huge capital.Increment in internal competition within industryVolatility in prices of oil and gasesRestrictions of international and national law which impacts new entrance of businessThreat of substitutesThere are presence of various alternative sources such as:CoalHydrogenNuclear energyBiofuels and other renewable sourcesBargaining power of suppliersIts suppliers are highly integrated and active in whole value chain of gas and oil sector.The features of suppliers are:Serving national interestsProtection of territorial environmentSupports local economiesBargaining power of buyersThe bargaining power of its buyers is relatively less because of nature of particularindustry. The main buyers are replicated as:National oil companiesDistribution organizationsNational oil companiesTradersInternal oil and gas organizations2
Free Cash Flow Equity Model - Assignment_4

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