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2.- Perform repetitive activities automatically). The change was necessary as the construction market in the Northern Europe is very competitive. The annual growth rate is less than 4% and the market is segmented in many medium-sized companies.
NCC's competitors in the Nordic markets are: Peab of Sweden and Skanska.
Peab used a free cash flow model for the company's valuation. This model discounts future free cash flows and future financing flows to compute the value of shareholder equity. This is done by first computing the value of net operational asset and net financial obligations. The model is used together with a so called "residual operational income model" that discounts future residual income flows and future residual net expenses (Aveholt and Nordby, 2005).
Beers Skanska, the parent company from U.S. implemented PeopleSoft EnterpriseOne in 1999 to centralize the treasury activity on the American territory. The system allowed for payroll cost reduction, time savings and improved customer relationship. Currently, in the European territory, Skanska is struggling with cash flow shortcomings. The European part of the group incurred a profit breakdown in 2005 due to the problems incurred...
Skanska bought Exbud, a Polish company to enter the market, but soon after the acquisition, the Polish market deteriorated. The investment is a good one in the long-term. However, in the short-term, it is very difficult to predict the market evolution and the impact on the company. The major problem is cash related, because Skanska was forced to make major writedowns. At group level, the financial status is stable, but the company needs to improve on the cash forecasting side and consolidate its treasury department activities to tighten the control of cash flows. Also, the company needs to centralize financial flows, by reallocating resources from one business unit to another to reduce debt costs.
Reference List
Annica Gerentz, (2007) "Market and Competitors - Boom in Nordic Construction Sector," NCC corporate Website: http://www.ncc.info/templates/printPage.aspx?id=4683.
Aveholt, Marcus and Jenny Nordby, (2005) "Peab - Equity Research Report," Uppsala University, Department of Business Studies.
Opus Capita Case, (2006) "NCC is building on reliable analyses - Improved Cash forecasting," Opus Capita Journal.
Management of CASH FORECASTING
Reference List
Annica Gerentz, (2007) "Market and Competitors - Boom in Nordic Construction Sector," NCC corporate Website: http://www.ncc.info/templates/printPage.aspx?id=4683.
Aveholt, Marcus and Jenny Nordby, (2005) "Peab - Equity Research Report," Uppsala University, Department of Business Studies.
Opus Capita Case, (2006) "NCC is building on reliable analyses - Improved Cash forecasting," Opus Capita Journal.
Management of CASH FORECASTING
"MIRR: A better measure." Business Horizons. 51(4), 321-329. Cited in: http://econpapers.repec.org/article/eeebushor/v_3a51_3ay_3a2008_3ai_3a4_3ap_3a321-329.htm McClure, B. (n.d.). "Taking Stock of Discounted Cash Flow." Investopedia. Cited in: http://www.investopedia.com/articles/03/011403.asp?partner=answers "Modified Internal Rate of Return." (2009). Cited in: http://www.thinkanddone.com/finance/mirr.html Parrino, R, & D. Kidwell. (2009). Fundamentals of Corporate Finance. (Vol. 1, Ed.). Wiley Custom Solutions. Smart, S. And WL. Megginson. (2008). Corporate Finance. Thompson Learning. Sullivan, A. And S. Sheffrin. (2003). Economics: Principles in Action. Prentice-Hall. The IRR is the rate of return that makes the
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