Draft 1 Requirements and Content Moore – Valuation Project

Draft 1 Requirements and Content
Moore – Valuation Project
Your first draft (section) of the valuation project involves developing and
communicating an understanding of the firm you are valuing; its competitors; and
the industry in which your firm operates.
In all drafts (macro level) and for each sub-section, I recommend a business
writing style that I have termed “DDAC”.
o Introduce the topic/section and tell the reader what will be done
o Communicate clearly the key concepts and methods that will be
covered. You will have trade-offs in writing at a high level (technical
expertise) and communicating to a novice (non-expert)
o Why is this important (why do I care)? What will be learned from this
o Non-quantitative Sections – Develop logical arguments in order to
interpret the results/models you have employed
o Quantitative Sections – Present summary tables; discuss results
(numbers have meaning)
Draw Conclusions
Required Format:
 12 pt. Tahoma Font; 1.5 Line-Spacing; written text (not bullet points); start
developing tables, graphs, and charts (where appropriate); number your
pages; start your Table of Contents and Reference Section.
Content for Draft 1
Basic “Stuff”
 Start With a Table of Contents
 Next, Introduce the Draft (what’s it about, why it’s important, overall
inferences to be drawn from the draft)
 Now for the meat of the draft
1. Overview of Firm you have selected (brief)
 Products/Industry; Sales volume and growth (past 5 years) for firm,
main competitors and industry as a whole; Market capitalization of
firm; Total Asset value past 5 years; where firm is located (in terms of
operations); how long has firm existed; stock price performance.
2. Industry Overview and Analysis (Five-Factor Model)
 Analyze the industry (not the specific firm you are valuing) using the 5forces model
 Provide details, draw conclusions and support your assertions for each
of the five forces (sections); e.g. actual competition, potential entrants;
substitute products; power of customers; and power of suppliers.
 In the appropriate sections, use information such as industry sales
growth, industry asset growth, market share, etc. to develop and
support your analysis regarding the level(s) of existing and potential
competition and substitute products.
 Be sure to draw conclusions at the end of each of the five sub-sections
as to whether this leads to higher competition in the commodity good
space or lower competition in the specialty good space.
 Finally, draw an overall conclusion as to the level of competition
classification for the industry (High Competition, Low Competition or
Mixed Competition). This ties together the overall implications (at the
industry level) of the 5-Forces analysis.
 This section draws heavily from the components of Figure 2-1 in the
3. Analysis of Key Success Factors for Value Creation in the Industry
 Strategies that create value for a firm that has been classified
according to Part 2 (above) – See the elements of Figure 2-2 in the text
 Given your classification, what corporate strategies or activities create
value and competitive advantages in such an industry
 Again, be careful as this is an industry analysis (not the specific firm)
4. Firm Competitive Advantage Analysis (Historical, Current, Future)
 Now analyze your firm to see how well it utilizes (implements) your
findings in Part 3.
Finally, present your references and citations