Strategisk regnskabsanalyse og værdiansættelse af IC Companys A/S

Jeanne Koch Rasmussen & Sofie Brunbjerg Ortmann

Student thesis: Diploma thesis

Abstract

The purpose of this thesis is to indicate the value of IC Companys A/S. The purpose is to determine whether the estimated market value as of 31th December 2012 is attractive compared to the actual quoted market price. In order to reach this estimated value, the thesis is divided into four main chapters consisting of a strategic analysis, a financial analysis, budgeting and a valuation. IC Companys A/S is a Danish listed fashion group formed by the merger of Carli Gry International A/S and InWear Group A/S in 2001. IC Companys A/S is among the largest clothing companies in the north with a revenue of 3.819 m.DKK and more than 2,200 employees. The company sells 11 strong brands in more than 40 countries. A strategic analysis was performed of the company and related markets. The analysis concluded that IC Companys A/S’ main strength is their multi brand strategy. Each brand is run as a separate business enterprise but all brands are supported by a shared back-end platform, which reduces the operational risk. This wide brand portfolio is very expensive marketing and maintenance vise, which probably has been crucial when the board announced that two of the brands are currently hold for sale. The financial analysis concluded that the company has a decrease in their ratios. An analysis of return on equity showed that the capital structure was the main underlying driver, as the equity has increased almost 70% in a five year period, while the liabilities have decreased at the same time. An analysis of the risks that the company is exposed to showed that the company has a high exposure of operational risk mainly due to the fashion risk and the inventory risk led hereby. The financial risks are rated low due to the use of derivatives, the capital structure and the free cash flow generated in a five year period. Based on the strategic analysis and the financial analysis a future budget was estimated. The budget is basis for the valuation of IC Companys A/S. The DCF-evaluation and P/E-evaluation have been used to estimate the market value. Based upon the calculations the estimated market value is 89 DKK and 125 DKK per share. As the actual price per share was 134 DKK on the 31th December 2012 it indicates that the actual quoted market price is overrated and therefore it is not recommendable to buy shares in IC Companys A/S at market price of 134 DKK as of 31th December 2012.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2013
Number of pages99