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    Kattika Lalith

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    ak4784449
    The document summarizes a capstone project on financial planning and valuation of a new venture called Oriana Hungary. The project involved analyzing Oriana Hungary's initial financial plan, refining the financial statements and ratios, and performing a dynamic valuation of the company using discounted cash flow analysis. Key deliverables were a strengthened financial plan addressing revenue, costs, financing needs, and a dynamic valuation model to help negotiate with investors. The project provided practical experience applying financial knowledge to a real business case.

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    Kattika Lalith

    Uploaded by

    ak4784449
    14 views12 pages
    The document summarizes a capstone project on financial planning and valuation of a new venture called Oriana Hungary. The project involved analyzing Oriana Hungary's initial financial plan, refining the financial statements and ratios, and performing a dynamic valuation of the company using discounted cash flow analysis. Key deliverables were a strengthened financial plan addressing revenue, costs, financing needs, and a dynamic valuation model to help negotiate with investors. The project provided practical experience applying financial knowledge to a real business case.

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    The document summarizes a capstone project on financial planning and valuation of a new venture called Oriana Hungary. The project involved analyzing Oriana Hungary's initial financial plan, refining the financial statements and ratios, and performing a dynamic valuation of the company using discounted cash flow analysis. Key deliverables were a strengthened financial plan addressing revenue, costs, financing needs, and a dynamic valuation model to help negotiate with investors. The project provided practical experience applying financial knowledge to a real business case.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views12 pages

    Kattika Lalith

    Uploaded by

    ak4784449
    The document summarizes a capstone project on financial planning and valuation of a new venture called Oriana Hungary. The project involved analyzing Oriana Hungary's initial financial plan, refining the financial statements and ratios, and performing a dynamic valuation of the company using discounted cash flow analysis. Key deliverables were a strengthened financial plan addressing revenue, costs, financing needs, and a dynamic valuation model to help negotiate with investors. The project provided practical experience applying financial knowledge to a real business case.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 12

    CAPSTONE PROJECT

    Summary Essay

    Topic: Financial Planning & Valuation of a New


    Venture
    CEU eTD Collection

    By

    Lalith Kumar Kattika


    The capstone field project topic chosen was the financial planning and valuation of a
    new venture, Oriana Hungary. To be more accurate, the financial planning and
    valuation of a new sub-division of Oriana for presenting to the investors. The key
    deliverables for the project were analyzing the current financial plan and company
    valuation of the new venture before advancing to the investors.

    Oriana is a solutions provider for IT support for business process. They have been in
    the market for the past 15 years and have a unique expertise in business Information
    Technology on the market. Oriana Hungary, the new venture is a low-code platform
    provider for consultants for faster application development. The Revenue source is the
    license fee and support fee for the platform.

    Digitalization happening in all industries have opened doors to high need of developers
    in the market. Low code platform would be one of the solutions to meet the new growing
    demand. This industry is forecasted to grow tremendously in the next 10 years and
    Oriana Hungary plans to be one of the players in the Central and Eastern Europe
    market.

    Financial Plan
    The financial planning was in the initial stage at the start of the project. A crude cash-
    flow statement for the next 5 years was provided for the project. To progress with the
    financial analysis, the income statement and the Balance sheet was required.

    As the first task, the three statements; cash-flow, income statement and balance sheet
    were prepared in the standard format using the cash-flow statement provided as base.
    The FCFF (free cashflow to firm) was calculated and plotted to know the financing need
    of the firm. The financing need was required till the end of 2nd year.

    The financial analysis of the firm was done by comparing the financial ratios with the
    industry benchmarks. All the below metrics were individually analysed and
    recommendations were provided to make the financial plan stronger and presentable to
    CEU eTD Collection

    the investors.
     Revenue considerations
     Cost structure/benchmarking
     CAPEX structure
     LTD assumptions and viability
     WC management
     Short term Debt
     Dividend policy
     Financing need
     Taxes
    The initial financial statement focused on the margins and profits generated for the
    investors. It was attractive but a more concrete plan covering all the aspects will be
    more sellable for the investors. Based on the recommendations, the new refined
    statements accounted for clearer expenses and better future investments road map,
    making it a good financial plan.

    Company Valuation

    A Dynamic valuation was prepared as part of the capstone project. With changing
    market conditions and new inputs added to the venture frequently, a dynamic valuation
    was provided to the client. Valuation would be updated immediately when the market
    parameters are changed, giving more flexibility and usage in the long run to the client.

    The first task was the calculation of the cost of capital. For calculation, the Risk
    premium of the country (Hungary) and unlevered beta of the company’s industry were
    taken from Damodaran. The debt-equity ratio was calculated based on the financial
    statement and risk free rate of the country was taken from bloomberg. The rate of the
    swap curve was taken as risk free rate in Hungary as government bonds are not
    Investment grade.

    The Valuation was done using the DCF (Discounted cashflow) method. The cash flows
    were projected based on the analysis of the financial plan and assumptions on the
    market conditions. Conservative numbers based on the industry and revenue model
    were used where insufficient data was there. Industry standards and Hungarian
    economic growth values are used in the terminal value calculation. Standard Tax rate
    was considered in the calcuations. No tax in the initial years due to negative EBIT.

    The IRR and cash multiple was calculated based on the valuation. A dynamic solution
    to work with the stake given and IRR was provided, giving the client flexibility to
    CEU eTD Collection

    negotiate with the investors.

    The capstone field project was a good channel of using financial knowledge in the real
    finance industry. The key deliverables were provided to the client in time and was
    received satisfactorily by the client.
    CEU eTD Collection
    CEU eTD Collection
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    CEU eTD Collection
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    CEU eTD Collection

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