Case Study – CASH FLOW ANALYSIS AND VALUATION OF SECURITY

conduct financial analysis of Domino’s Pizza Enterprises Limited (ASX code = DMP). 2. Give a brief description of Domino’s Pizza Enterprises Limited. 3. Explain the purpose of financial statement analysis. 4. Analyse the firm’s current operation using its financial statements (i.e. income statement, balance sheet and cash-flow statement). You should also take into account supply and demand factors (i.e. you need to look at the market conditions at both industry and economy levels). 5. Use an appropriate dividend valuation model to value DMP’s shares (Hint: use the total dividend figures). 6. Draw graphs for DMP’s adjusted share price and return (you can use daily, monthly or quarterly return). Compare the company’s share price and return with your analyses in questions (4) and (5) above. 7. Use the information and results from your analyses in questions 4-6 above; identify areas of cash flows where the firm needs to pay attention to. 8. Suggest relevant investment and financing strategies to improve the firm’s cash flow position. 9. Justify your recommendation in terms of shareholders’ wealth maximization.

 

 

Sample Solution

ACED ESSAYS