Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Multiples Valuation and Estimation of Financial Distress of William Companies
The paper uses the market approach to calculate the William Companies multiples-based valuation of shares. The direct competitors of Williams Companies are:
Dynegy
Dominion Resources
Murphy Oil
The paper uses 2001 financial statements of Williams Companies and its competitors to carry out the multiple valuation of shares.
The next step is to determine the correct P/E (Price Earning) Ratio and the formula to calculate the P/E ratio is as follows:
P/E = "Current Stock Price / (Net Profit / Weighted average number of shares)"
The P/E ratio of Williams Companies peer companies is as follows:
Stock Price
Plus: Debt
Less: Cash
Market Capitalization
Net profit
Number of Shares
P/E
Enterprises Value
EBITDA
Dynegy
$127.50
4, 324 M
2.372B
$643.000.000
2.762 B
1,517M
Dominion Resources
$60.10
13,251 M
B
$544.000,000
31.14B
3, 030M
Murphy Oil
$84.04
83M
3.288
$331.000.000
9.9
3.774B
769M
The enterprise value reflects the market value of an organization. The enterprises value also reflects the worth of market value of a business. In other words, the enterprise value captures the costs of the business that include equity and debt. Theoretically, the enterprise value is the price that a purchaser is ready to pay for a business in case of taking over the business. The formula to calculate the enterprise value is:
Enterprise Value = "Market Capitalization + Current Portion of Long-Term Debt + Notes Payable + Long-Term Debt + Book Value of Preferred Stock + Book Value of Minority Interest - Cash and Cash Equivalents" (Y Chart, 2015).
Using the multiple valuation method, the paper estimates the valuation of Williams Companies using the P/E ratio of the peer companies. The value of the William Companies is calculated as follows:
Formula:
"Average corrected P/E ratio x net profit at the end of the forecast period."...
The paper uses the following calculation to estimate the value of the Willimans Companies;
=(Sum P/E of Peer Company / 3) *835 M
((17.3 + 27.42 + 9.9) / 3) * 835.000.000
=(54.62/3)* 835,000,000
= 18.206 *835,000,000
= $15.2 Billion
Using the multiples-based valuation of shares, the enterprises value of Williams Companies is $15.2 Billion. ( The Appendix 1 and 2 provide the balance sheet and income statement of Williams Companies)
Question 2.
Williams Companies should carry out major restructuring to come out from the financial distress. First, the company should re-organize its extensive pipeline holdings. Williams should separate the company into stand alone two business publicly traded corporations. For example, Williams should separate the production and exploitation into two different businesses. The separation of two line of businesses will assist the company to focus on each line of business to achieve high profitability. For example, the Williams management should put directors specializing in production line to run the area of business. The strategy will assist the directors to devote their expertise to remove the company from financial distress. It is essential to realize that the Williams Companies is a big company, thus, separating the production from exploitation will assist Williams to run the company effectively.
Despite the benefits that Williams will derive from the structuring procedure, Williams should implement the structuring with caution. The's company should carry out the feasibility study of this process before carrying out the full implementation. For example, the company should estimate the costs of separating the two line of business and the revenue to derive from the line of business. More importantly, the company should use different capital budgeting techniques to determine whether this line of business is worthwhile.
First, Williams should use the NPV (net present value) to determine whether the business venture is worthwhile. If the NPV is greater than one, Williams should implement the business venture. The company should also calculate the DCF (discounted cash flow) to estimate the outcome of the business between 5 and 10 years. Using this strategy,…
1998-12
As Originally Reported
Restated
) between 20 and 50. Studies have shown that people with multiple sclerosis who exercise: c.) have less fatigue How many people in the United States are diagnosed with multiple sclerosis every week? A b.) about 200 ("Take the FDA Consumer") Dealing with Depression As depression is reportedly the most common psychiatric disorder in multiple sclerosis (MS) patients, those caring for MS patients who express any sort of suicidal ideation should be closely monitored and referred
Multiple Intelligences on Personal Success Multiple Intelligences In the early 1980s, Howard Gardner first developed his ideas regarding multiple intelligences. His theory posits that each human has pluralistic intelligence -- that intelligence manifests in many ways at once. The theory of multiple intelligence leads to new ideas and perspectives regarding topics in education including types of learners, methodology, and philosophy of education. Gardner classifies the types of intelligences as follows: logical-mathematical;
Valuation Report Identification of Subject Property The subject site is an office property in Oakville, Ontario. It can be sold either in parts or as whole, and this report will consider the whole. The size of the whole building is 4016 square feet. The property is located on the service road adjacent to the Queen Elizabeth Way (QEW), a major highway in the region that links Toronto with the cities of Hamilton
Valuation of AirThread Connection Fundamental objective of this report is to present valuation of AirThread Connection. "American Cable Communication (ACC) was one the largest cable operators in the United States"(Stafford & Heilprin 2011P 36). In December, 2007, ACC cable systems reached approximately 48.5 millions homes with approximately 24.1 millions video subscribers. The company also enjoyed patronage of 4.6 million landline telephone subscribers and 13.2 millions high speed internet subscribers. The company
Lesson Plan Amp; Reflection I didn't know what state you are in so was unable to do state/district standards! Lesson Plan Age/Grade Range; Developmental Level(s): 7-8/2nd Grade; Below grade level Anticipated Lesson Duration: 45 Minutes Lesson Foundations Pre-assessment (including cognitive and noncognitive measures): All students are reading below grade level (5-7 months) as measured by standardized assessments and teacher observation Curricular Focus, Theme, or Subject Area: Reading: Fluency, word recognition, and comprehension State/District Standards: Learning Objectives: Students will develop
Branding in Service Markets Amp Aim And Objectives Themes for AMP Characteristics Composing Branding Concept Branding Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Categories and Themes Branding Theory Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Branding Concept Characteristics Characteristics Composing Branding Concept Sampling of Studies Reviewed Evolution of Branding Theory Evolution of Marketing Service-Brand-Relationship-Value Triangle Brand Identity, Position & Image Just as marketing increasingly influences most aspects of the consumer's lives, brands