Business Analysis Case of Merck
Business Analysis Case (100 Points)
Perform a complete business analysis (all four parts) and determine if the company’s stock is fairly priced as of 3/25/19.
In your analysis please be sure to discuss all major accounting issues and indicate amounts that would be adjusted even if they are immaterial and you determine no adjustment is required. Also, be sure to perform a complete financial analysis as part of your business analysis.
Please start with the industry/strategy analysis followed by the accounting analysis, financial analysis and forecast/valuation. Be advised that you should use the ratios found in the data file in the financial analysis tab and trend analysis utilizing 5 years of data for profitability ratios and at least 3 years of data for liquidity and solvency ratios.
Please make sure to support all of your assumptions in the forecast process.
The data file will be used for your financial analysis and forecast/valuation. After you have completed your industry/strategy analysis, accounting analysis, and financial analysis you can start your forecasting analysis which will be completed when you input your forecast using the forecast tab.
Please submit your exam via canvas and attach a section within your forecasting section that has your assumptions and includes your estimate for the cost of equity and how it was derived. In the event your forecasted price differs from the market price (it usually does) provide some sensitivity analysis on what is likely causing the difference.
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