Strategic Financial Valuation of Carlsberg free essay sample

Strategic and financial valuation has been a large part of what the author has focused on during his studies and therefore the author finds it very interesting to combine many of the theories studied during his studies in practice. The reason why Carlsberg has been chosen as a case is that the author finds the industry that Carlsberg operates in, i. e. the brewing industry, very interesting. The brewing industry has undergone a major consolidation phase during the last 10 years where the five largest breweries have increased their market share from 26. % to 47. 6% in 20101. Carlsberg was not a part of the top five breweries in 2000 but was the fourth largest brewery in the world in 2010, with a market share of 5. 5%2. This they have achieved by a series of acquisitions, most notably by acquiring parts of Scottish Newcastle and the acquisition of Baltic Beverage Holdings in 2008. Carlsberg is a very dynamic company that operates in over 150 countries3. We will write a custom essay sample on Strategic Financial Valuation of Carlsberg or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is registered on the OMX Nordic, Copenhagen Stock Exchange, and is one of the largest companies in the OMX C20 index4. As a public company Carlsberg is obliged to publish all information that might influence their share price which makes it an ideal candidate for a thorough valuation. And therefore the author would like to dig deeper into the knowledge and theory behind a strategic and financial valuation. 1. 1. Problem formulation Carlsberg? s share price has undergone serious fluctuations in the last 3 years. From peaking in late 2007 at around 621. 559 to dropping to a low of 151 in March 2009 to steadily rise again to 575 in March 20115. 1 2 Euromonitor (2011, p. 12) Euromonitor (2011, p. 11) 3 Annual Report (2009, p. 1) 4 Bloomberg Professional, 2011 5 Bloomberg Professional, 2011 5 Strategic and Financial Valuation of Carlsberg A/S This is a decline of more than 75% followed by an increase of more than 380%. Not only has Carlsberg outdone the OMXC20 index, where it weighs around 7. 58%6 of the total index, but it has also outdone the MSCI index7 by more than 200% since 2009. Analysts strongly disagree as to why Carlsberg has managed to outdo the Indexes so much in the last 5 years. One can assume that the sharp decline in 2008/9 was mostly caused by the global recession where commodity prices rose heavily and investors were afraid that the debt caused by the acquisition of Scottish Newcastle and Baltic Beverages Holding would weigh them down. However, as 2009 and 2010 passed commodity prices rose heavily8, which hit Carlsberg on the bottom line, Carlsberg managed to outdo the Indexes to such great extent. 6 7 www. nasdaqomxnordic. com The MSCI World Index is a stock market index of over 6,000 stocks in developed markets. 8 Graph in section 3. . 2. 4 6 Strategic and Financial Valuation of Carlsberg A/S Why is that? This is one of the reasons why the author finds it interesting to do a strategic and financial valuation of the firm. What are the main value drivers that cause the company’s share price to constantly rise? According to Efficient Market Theory9 (EMT) all information is embedded into current prices and changes in prices are random, and will the refore not follow any patterns or trends. If this theory holds then there must be some significant value drivers driving the company? s share price up. Or could it be that the behavioral economists are right when they argue that markets are not perfectly efficient as EMT suggests? Human errors and inabilities in interpreting market information devalue the EMT as studies have shown that regardless of the available information markets are not completely effective because investors many times do not behave rationally to given information. This tells us that prices fluctuate more due to these human biases than if the market was completely efficient. Given this information, the author wants to do his best in estimating Carlsberg? fair market value by analyzing all major factors that affect the company without any cognitive or any informative bias being included. If my own valuation differs a lot from the market price then some bias has occurred. There will unfortunately always be some subjective assumptions when doing a fundamental analysis so if my own valuation differs a lot from the market price one might question whether the valuatio n has contributed to a more effective market or has been a victim of the behavioral economics.

Door to Door essays

Door to Door essays Door to Door is a very inspiring movie that has much relevance to the business world. In the movie the main character is handicapped. He has cerebral palsy, a condition that affects him in obvious ways. It causes him to have a slurred speech and it makes it hard for him to get around but the man is determined to be a salesperson. Not only does he make it in the sales world, he becomes a top salesman for his company. Many people who had doubted him, now gave him the respect he deserved. The salesman is successful for many reasons. First and probably most important is the way he treats his customers. He is a really friendly guy and gets to know his customers. He is honest and dependable. His customers can and did come to his when they had other problems too. Also he is a successful salesman because he is just a good salesman. He is persuasive and a quick thinker. He knows what to sell and who to sell it to. Also he knows his products in depth and he can answer questions concerning those products. Another reason for his success is his dedication. He put his mind to becoming a good salesman. He faced many set backs also. First was the obvious cerebral palsy. It caused slurred speech and so many customers didnt take him seriously. Also it limited his ability to get around. He could not drive. Also it was hard for him to carry heavy things. Second was the fact that the mangager didnt think he could do it. The manager about took away the salesmans job. T hird was the fact that his mom died. His mom was very important to him and she helped him dress, made him food, and picked him up after he was done selling. This was a really inspiring story because of the amount of success the salesman had with all the factors that he faced. This movie really showed that if you put your mind to something you can accomplish it. You have to realize that your success lies mostly in your hands. ...

Causes of income inequality in the UK and evaluate the measures that Essay

Causes of income inequality in the UK and evaluate the measures that could be used by the UK government to achieve a more equal distribution of wealth - Essay Example and Scott, G., 2012). The same cannot be said for high manual labor demanding jobs characterized by unpredictable shortages of skilled manpower. These have higher individual income rates than high growth rate jobs. The service sector in the UK which demands for low-skill and has limited trade union cover is the worst in terms of worker remunerations. The sector is often characterized by employment insecurity and unclear job descriptions which vary depending on the market demand, employers’ unique needs as well as personal pressures/ stress/ problems. The effect of globalization has seen an influx of high-skill jobs especially in high growth industries. Persons with unique skills are increasingly getting well paid than witnessed in previous years. Academic exposure has also defined the industrial/ job variations with professionals being scaled depending on their levels of education (Mooney, G. and Scott, G., 2012). This is the main factor determining labor as skilled, un-skille d, manual, automated, permanent, contractual and casual, among other classifications within the United Kingdom. State benefits including unemployment income and benefits from the state welfare are critical in the United Kingdom individual income disparities. This is because the state benefits are directly connected to the prevailing retail prices within the economy and not in any way indexed to the earnings of individuals (Eibel, D., Rockika, E., and Leaman, J., 2013). This explains why relative incomes of people who are state benefit oriented decreases over time. This factor has defined the inflation effect on large families surviving on minimum wage as well as households’ dependant on pension. The third factor in unequal income distribution is unemployment. This affects income distribution in both the short-run and long-run. In the long-run it affects education, quality of labour as well