The previous reports have already approached the industry and financial analysis of Myer. This report will analyze the forecast, valuation and application of Myer, including forecasting the major data, valuating share price under four model and discussing the opportunity and challenge of Myer.
1. Forecast sales growth rate
As one of the most important indicators, sales can reflect directly Myer’s financial performance and influence other indicators. Therefore, the forecast of sales growth rate is the foundation for forecasting Myer. Based on the previous annual reports from 2007 to 2011, Myer’s sales are not optimistic and the average growth rate is negative 2.89%. The decline of both global economy and …show more content…
Finally, DCF model focuses on cash flow which results in the equity increases. Usually, it can get the same share price with DAOE, but does not affected by accounting rules. However, investments are treated as losses for cash flow, which can bring more future benefits to Myer. Therefore, if Myer plans to use investments to produce free cash flow, then this model is very close Myer’s real conditions.
Prospective – Sensitivity
On one side, Myer is department store and compete in retail industry. Seasonality is more significant aspect in retail industry. The boom seasons for Myer are the end of financial year and Christmas holidays. Also, the weather, new products in season or other factors are the aspects which Myer is sensitive.
On the other side, according to Appendix 4, the four