Business Valuation Report

Instructions

Although TESLA is most firmly implanted in the public consciousness as a pioneer and as a major player in the electric car space, in fact, GENERAL MOTORS also is a very serious entrant. The company’s CRUISE unit is addressing unmet emerging market opportunities in electric vehicles and self-driving vehicles. https://www.gm.com/our-stories/technology/gm-technology-paves-the-way-for-an-all-electric-future.html

Since CRUISE is a GM subsidiary, it does not trade separately in the open market.  Estimation of its value arises in many contexts. The first is the annual test of goodwill impairment. The second is the very real possibility of going public…i.e., a spin-off IPO. You can make up any context that seems interesting to you. Your task is to be a financial economist, or an accounting firm, or an investment bank, or a commercial bank, or an underwriter or a law firm involved in creating a valuation report to be used in the goodwill impairment test section of GM’s annual 10-K report, or in negotiations such as the 2020 link-up with an electric truck manufacturer, SEC registration or the going public public process.

DOCUMENTS THAT I ATTACH HERE:

The first four are some background pieces. The last one is the actual case, written by me. Concentrate on that last one, the actual case. You do not have to actually absorb all of the other four documents. Let them serve to provide extra background, if you think they are relevant.

In choosing your comparables, you can look at beta, ROE, and other financial ratios. But those do not directly lead to a valuation. They help you choose the comparables, and then you proceed to use and weigh (weighted average or personalized weights) P/E, P/B,P/D, P/EBITDA, DCF, etc (there are many just chooses a few that you can discuss and justify). In your Langsdale library website, I recommend IBIS WORLD, MERGENT and MINTEL as great information sources.

TURN IN:

1-WORD or pdf document describing everything describing your research and calculation. Format this in any way you think adds to the reader’s comprehension, I am agnostic wrt formatting. STATE THE TEAM’s NAME. PUT THE NAMES OF STUDENT CONTRIBUTORS ON THE DOCUMENT.

2-EXCEL document showing valuation calculations. STATE THE TEAM’s NAME. PUT THE NAMES OF STUDENT CONTRIBUTORS ON THE DOCUMENT.

3- Create a PPT document which is your “presentation.” This PPT does not need to have video* of the team doing the talking, but it does have to include audio.  PPT lets you record your voice, but there are many equivalent routes. You can do this with Panopto, Camtasia, ZOOM, Screencast-o-matic, Screencast, etc. There are many recording PPT programs available.  I recommend Screencast-o-matic or ZOOM. PUT THE NAMES OF CONTRIBUTORS ON THE DOCUMENT.

I attach a rough valuation (VALUATION SPREADSHEET-2018 Goodwill article) workbook that I wrote, and I adapt all sorts of changes to it for specific situations. You should probably do a lot of personal editing for this case (I use this one mainly for doing sensitivity analysis).

I also attach a template that I think is good for working with DEALSTATS data (titled VALUATION METRICS AND WEIGHTS use with DEALSTATS).

You are TOTALLY free to edit these spreadsheets to suit your data, your “opinion,” as they say in court proceedings. In fact, you can probably do better with your own custom EXCEL workbooks. I just wanted to give you tools if you wanted a good headstart.