Prospective Analysis (10 marks)Forecast the future financial performance and use appropriate...

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Prospective Analysis (10 marks)Forecast the future financial performance and use appropriate valuation models to produce an estimate of firm value. As you are valuing a publicly traded company for common shareholders, you should focus on the value of a share in common stock of that company and compare your valuation to the market valuation, providing possible explanation for any differences (sensitivity analysis). You should comment on the extent to which management is adding value, and comparison with the stock price is encouraged.	Application (10 marks)	As a potential management consultant to your chosen firm, provide a discussion as to the possible opportunities for improvement, and potential challenges for your firm. Provide remedies for these concerns. You should be quite specific in any recommendations you make.The report is limited to 4 pages of text and 4 pages of supporting material.

Robert · Accepted Answer

Finance
Financial performance analysis 
Wotif Holdings Ltd
Finance 
Introduction to Wotif Holdings Ltd 
Wotif Holdings Ltd functions in online travel business in the Asian Pacific region. 
Travel and tourism is an important aspect of several economies. Moreover as the customer 
segments become increasingly tech savvy it leads to higher importance to online travel 
businesses in the Asian Pacific regions. Tourism is a dynamic industry with several changes 
taking place in a rapid pace. This makes tourism an interesting and intense an industry. The 
financials in this industry also play an important role for the survival and growth of Wotif 
Holdings Ltd. as it is a public limited company.  
Prospective analysis 
Forecasting of future financial performance  
The financial performance of  Wotif holdings can be analyzed based on their financial 
statements as well as some of the important elements noticed in these statements. The annual 
report of Wotif holdings Ltd, states that they have been able to maintain their position as the 
best in the industry and their strong position in Australia and New Zealand. It has been stated 
that innovation has helped them stay ahead of competition. Based on this information as well 
as its positive financial performance we can state that the future financial position and 
performance of this firm shall remain strong. 
There has been an increase of 14% in the NPAT (Net Profits after tax) which shows 
strength in their financial position. An increase in the number of transactions shows that several 
of their strategies including instant bookings of holiday homes and the launch of an I phone 
app have all helped the firm strengthen its position and build a favorable image among its users 
and customers. In this way it has also been able to stay ahead of competitors and hence its 
future performance can also be expected to be growth oriented.  
Finance 
Usage of valuation models for estimation of firm value 
Based on relative value model as well as the discounted cash flow models, the future 
earnings expected is $60 million to $62 million. This value has been derived by them based on 
present earnings being 57.

ProspectiveAnalysis (10 marks) Forecast the future financial performance and use appropriate valuationmodels to produce an estimate of firm value. As you are valuing a publiclytraded company for...

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