corporate finance project financial analysis for dar al dawa
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TRANSCRIPT
Dar Al Dawa Financial Analysis
Talal Abu Ghazaleh Graduate School of Business
Team Members
• Abdel Fattah Al Shadfan
• Dafi Jaradat
• Luay Dababneh
• Rima Akel
• Thuraya Taleb
Agenda
Introduction & Company Overview
Introduction & Company Overview
Stockholder Analysis
Stockholder Analysis
Investment Projects
Expansion into the Mena Region New Market Development
Investment Projects
Research & Development
Investment Projects
Investment Projects
Investment in Affiliates
Risk & Return Analysis
Risk Type Explanation
Currency Fluctuation
Algerian Dinar fluctuation caused a loss of 1.175 M JOD in 2012
CompetitionMany competitive companies are targeting the same markets
Political Riskhas taken a toll on investment intentions and caused a major concern on any future projects
Performance Profile Ratios
Ratio JPHM Hikma DAD Arabia
Cash Ratio 0.36 0.43 0.36 0.01
ROE 0.03 0.13 (0.07) 0.125
ROA 0.02 0.06 (0.04) 0.073
REC .Turnover 3.97 3.379 1.52 2.939
Days in REC 92 108 240 25
Payables Turnover 4.39 1 4.97 9
Days in Payables 83 280.51 73 42.93
Inventory Turnover 1.14 2.2 2.48 3.2
Days in inventory 319 164 147 114
Gross profit Margin 72% 45% 40% 38%
Net Profit Margin 5% 10% -8% 11%
COGS / Revenue 28% 55% 60% 62%
Performance Profile Ratios
Performance Profile Ratios
Performance Profile Ratios
Capital Structure
Ratio JPHM Hikma DAD Arabia
Interest bearing debt
7,303,232 608,187,000 24,861,219 5,595,389
Equity 65,526,890 847,850,000 49,784,725 44,573,454
Capital (debt + equity)
72,830,122 1,456,037,000 74,645,944 50,168,843
Debt / capital 10% 42% 33% 11%
Equity / Capital 90% 58% 67% 89%
Capital Structure
DAD 2012 2011 2010 2009 2008
Interest bearing debt
24,861,219 19,574,279 16,234,830 14,080,966 4,199,787
Equity 49,784,725 53,436,101 59,668,502 54,461,238 51,522,763
Capital (debt + equity)
74,645,944 73,010,380 75,903,332 68,542,204 55,722,550
Debt / capital 33% 27% 21% 21% 8%
Equity / Capital 67% 73% 79% 79% 92%
Loan Funding
Optimal Capital Structure
Dividends Policy
Less Shareholder
Wealth
Short-Term Loans
Valuation
FCF Calculation
2013 2014 2015 2016 2017Terminal
value
Discount factor
1.2183 1.4843 1.8083 2.2030 2.6839 2.6839
free cash flows
(2,787,376) 754,519 7,028,922 9,909,723 14,043,583 81,914,335
Discounted FCF
(2,287,923) 508,349 3,887,102 4,498,260 5,232,469 30,520,292
Discounted Cash Flow Method
Valuation
Valuation
NPV of FCF 42,358,550
Value of debt (24,861,219)
Cash and investment 11,607,103
fair value of the firm 29,104,434
No. Of shares outstanding 25,000,000
Fair value per share 1.16
Conclusions & Recommendations
Conclusions & Recommendations
THANK YOU!!
QUESTIONS?!