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MGMT 419N – Term 1, Assignment 2

Due Date: November 13, 2018

Notes:
 Submissions should in typed format – hand written submissions will not be
accepted.
 We will be going over these concepts further during the workshop on Nov 6.

Required:

1. Pull the following Financial Statements (annual report) from SEDAR: Altus Group
Limited for the year ended December 31, 2017. For purposes of this assignment
you will not need to recast the F/S or complete ‘accounting analysis’ adjustments.

2. Complete a 10 year forecast for Altus Group Limited (2018 – 2027), for:
 Sales, NOPAT and working capital.
 Discuss your assumptions for each (based on information in the MD&A).
 For NOPAT, ensure you show your NOPAT margin assumption for each
year before completing your NOPAT forecast.
 For working capital, ensure you show your working capital to sales ratio
for each year before completing your working capital forecast.

3. Calculate EV for Altus Group Limited (using your forecasted amounts from
Question 2 where applicable, and data as needed from on-line resources), using
each of the following valuation techniques:
 Earnings based multiple valuation model, using current EBIT (ensure you
state where you obtained your earnings multiple). Your EBIT may need
to be adjusted/ normalized, if so, state all of your assumptions.
 Discounted dividend model (ensure you show your work for the CAPM
discount rate, including where you obtained your beta risk amount).
 Discounted abnormal earnings model (ensure you show your work for
the CAPM discount rate, including where you obtained your beta risk
amount). Your earnings may need to be adjusted/ normalized, if so, state
all of your assumptions.
 Discounted cash flows model (ensure you show your work for the CAPM
discount rate, including where you obtained your beta risk amount).

4. Discuss your overall findings from Question 3 – i.e. what is your range of EV’s,
how does each compare to the current trading price of Altus Group Limited,
which valuation method do you feel provides the most accurate value, other
highlights.

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