Nanosonics Limited NAN fundamental analysis report

This is a paper that focuses on the Nanosonics Limited (NAN) fundamental analysis report. The paper also describes the criteria of marking the paper.

Nanosonics Limited (NAN) fundamental analysis report

You are to write a report of Nanosonics Limited (NAN).  The report should be about fundamental analysis of this firm, including the firm’s business analysis, proper financial analysis, valuation and recommendation.

The final conclusion will have to mention whether you would recommend NAN as Buy or not.  This assignment is more of a test for the understanding of the process rather than just the final conclusion.

Marks will be given for:

1.      Format of presentation : word selection , conciseness, logical structure and presentation (you must streamline the writing style between writers, the report has to be read as one, rather than collection of writings)
2.      Business Analysis: descriptions of relevant economic and industry information, company position in the industry, and company strategy
3.      Financial Analysis, forecasting, data description, comparative presentation, ratio analysis and comments
4.      Valuation : methodology used, assumptions, reasoning for selection, final calculation and comparison to actual market prices
5.      Conclusion: considerations both qualitative and quantitative, limitation, pro-contra argumentation, and final recommendation.

Nanosonics Limited (NAN) fundamental analysis report

You main source of information should be the firms’ latest annual reports, added by public information such as websites, databases, current news etc.

Industry analysis:

Prepare a brief for the industry, relevant economic data and  description of major players, ranking, major competitors and also other pertinent information.

Company analysis:

Prepare company brief, outlining the short history, core activities, competitive situation, the markets they operate, major factors within and how the company respond them or business strategy.

Financial Analysis:

Determine key ratios for the past 5 years and interpret how these ratios have improved or deteriorated. Present your analysis of the financial data and also discuss this company’s performance.Conclude how the financial picture related to the stated business strategy.

·         Valuation: Discuss company’s situation and determine which valuation methods you think will be the most appropriate. Your discussion must be related to the previous financial analysis. At least two different valuation models should be employed (Free Cash Flow model is compulsory).

·         On valuation, you need to make estimates for market returns, risk free rate, company beta, growth and others (i.e. the length of high growth period in multi stage model).  On each estimate, you have to state your assumptions and also short discussion on how you come to that conclusion

·         Compare these valuation results with the market price. In most cases the valuation will differ from the actual (i.e. underpriced / overpriced). Discuss those differences, what are your conclusions?  Looking back to all the previous discussions to business analysis, do you think you miss something that might affect the final conclusion? Is sensitivity analysis necessary?

·         Recommendation:

Considering all the information above, and including your own qualifications / limitations that you can think of, state whether this company is for BUY? State your discussions and reasoning in short paragraphs of conclusion and recommendation.