Valuation project

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a. Comparable multiples*. You must use P/S, P/E and Discounted cash flow approaches. For the discounted cash flow valuation model, you must forecast an additional three (3) years as a total of five (5) years of yearly cash flows are required (terminal value calculation thereafter). The most important aspect of (a) is the selection of inputs and the associated documentation, discussion and motivation why certain companies and numbers were selected.

b. Acquisition premium. As in (a), document your selections.

c. Compare the firm’s values and comment in detail on the firms’ performance and valuation as related to your selection of comparable. Also use the PEG Ratio, in addition to the previously calculated valuation metrics.** The PEG ratio allows you to determine if your valuation makes the company over- or under-valued.

d. Note that you may do the valuation of the company as a whole or two valuations of the two separate businesses. It is best to do the valuation of the two divisions separately and then add them together and value the company as a whole when you do the P/E and P/S valuation. For the discounted cash flow method, do it as one company only, i.e., do not split Gencor into its two separate divisions.

e. The provided comparable firms do not include companies in the combustion sector. You will need to find two to three firms on your own. Please note that finding comparable firms for the combustion systems part may require some research on your part.

f. Gencor and Cosan are real companies, and you may wish to access information from various websites. However, you must use the

income statement information and industry information (blue side bar on the previous page) provided in this case when you do the valuation. You may add additional comparable firms.

 

Sample Solution

Endocrine disorders as a cause of obesity are rare and are associated with additional symptoms. Endocrine causes of obesity include Hypothyroidism,
Cushing syndrome, Pseudohypoparathyroidism, growth hormone deficiency, Acquired hypothalamic obesity. The distinguishing feature of endocrine causes of obesity is that stature and height velocity are decreased, whereas a normal or increased growth rate generally excludes endocrine causes.
Acquired hypothalamic obesity is a syndrome of intractable weight gain caused by hypothalamic damage from a tumor or its treatment with radiotherapy or surgery. Such patients may have adequate growth velocity even when GH deficient but have tumor-related signs and symptoms.
Pediatric obesity is also associated with early puberty and advanced skeletal development.
5. DRUGS:
Weight gain is an adverse effect of many psychotropic medications and a leading cause of non-compliance in children taking these drugs. Psychotropic drugs that cause weight gain include certain classes of antidepressants, antipsychotics, and mood stabilizers such as Lithium, tricyclics and mono-amine oxidase inhibitors (MAOIs), Clozapine, olanzapine, risperidone and quetiapine.
The antiepileptic drugs valproate, vigabatrin, gabapentin and carbamazepine have been shown to cause weight gain(12).
Other medications associated with weight gain are drugs that block serotonin 5-HT2, histamine H1, dopamine D2 receptors (13) and high-dose chronic glucocorticoid therapy.

HEALTH CONSEQUENCES OF OBESITY:
Obese children are at great risk for becoming obese adults and the risk doubles when at least one parent is obese. India has been announced as the Diabetic Capital of the World by WHO because of continuous rise in population with diabetes mellitus.

1. Type2 Diabetes Mellitus (T2DM):

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