Business Valuation

Topics: Balance sheet, Asset, Generally Accepted Accounting Principles Pages: 49 (6557 words) Published: September 13, 2014
Letter of Transmittal
16th October 2009

Mr Mukesh Garg
Department of Accounting and Finance
Monash University 400 Dandenong Road
Caulfield Vic 3145

Dear Mr Mukesh Garg,
Ref: Business Valuation Group Project 2 in Semesters 2, Year 2009

Here is the report you requested on 16th October, 2009. This report attempts to analyze Ambertech Technology Limited by industry analysis, accounting analysis, financial analysis and evaluation and forecasting from ***to ***** through ***** and relative valuation multiple models.

We would like to express our sincere thanks for your valuable guidance and support during the research and completion for this assignment. Please feel free to contact us if you have any further queries regarding this report.

Yours sincerely,

Shuai LI
ID 21643873 sli66@student.monash.edu.au

Fei KONG
ID 21631239 fkon2@student.monash.edu.au

Table of Contents

Introduction
Purpose
This report is business valuation of Amberthech Technology Limited. The report attempts to estimate the value of the firm based on the current performance and forecast the future performance of the company.

Scope
This report is mainly consisted of 5 parts, which are Business & Industry Analysis, Corporate governance analysis, accounting analysis, financial analysis and forecasting analysis. The time period chose here is from 2005 to 2009. Methodology

Over-time analysis and peer analysis are used in financial analysis part. And *** in forecasting and valuation. The data used mainly from annual reports of AMO, internet, electronic database. These data were complied to analyze the sustainability of the company. Limitation

The result of this report would be limited to the amount and quality of available information and the given time frame. Relevant assumptions would be made in the case of inadequate information. Bias may arise due to data has been collected from various database which may have different sources.

Business and Industry analysis
Economic Analysis
It seems that the most severe phase of economic downturn triggered by global financial crisis has passed. It is likely that quarter to quarter economic growth will become positive during the second half of the year.

As to the recovery of the economy, there are few signs. To be sure, targeted fiscal measures have lifted sales of motors in many countries. In addition construction activities are influenced by government actions. More broadly, such fiscal policies and government actions as tax cut and cash payment has led to the upturn of the consumer spending.

Despite of the great shock in 2008, Australia economy has managed to avoid the first two quarters negative economic growth. Aggressive monetary and fiscal policies have effectively influenced business sectors. Even though corporations profit have a sharp fall and debt and capital expenditure is being reduced.

As to the retail industry including technology equipment and hardware sector is facing worst two years of 2009-2010 like other industries.

After 2010, as the recovery of the economy and government’s continuous encouragement action, the condition of the retail industry will be better. Business strategy analysis
Competitive advantages
The purpose of competitive strategies analysis is to analyze the position of AMO in the whole industry. As there are 3 main types of strategies: cost leadership, differentiation and a combination of both.

The strategy of AMO takes is regarded as differentiation for the following reasons: Superior product quality
AMO only choose those excellent manufacturers who produce high quality products as its partners. So as a result, the quality of the products which AMO distributed is always superior.

Superior product variety
As we have analyzed above, AMO has 6 segments doing different businesses. AMO has a quite wide range of products ranging from the projectors to even...

Bibliography: http://www.ambertech.com.au/files/articles/AMB_AR_2005.pdf viewed October 3, 2009
Amber Technology, Annual Report 2006
http://www.ambertech.com.au/files/articles/Ambertech%202006%20AR.pdf viewed October 3, 2009
Amber Technology, Annual Report 2007
http://www.ambertech.com.au/files/articles/Annual%20Report%202007.pdf viewed October 3, 2009
Amber Technology, Annual Report 2008
http://www.ambertech.com.au/files/articles/Annual%20Report%202008.pdf viewed October 4, 2009
Economy Watch, “Australia Economy”
Palepu, K.G., Healy, P.M. & Bernard,V.L., Business Analysis & Valuation: using Financial Statement, 3rd ed, 2004, USA.
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