Value Proposition G4S PLC: What is the Value of G4S PLC and how Sensitive are it to Minor Changes in the Assumptions

Kenneth Peder Pedersen

Student thesis: Master thesis

Abstract

A Value Proposition of a company can be done in many ways, and with both small and large analytical work. This Value Proposition is analyzing the company G4S. The Value Proposition of G4S PLC has been made with a strategic focus on how the company can increase their value in the future. This is done by a thorough strategic analysis, of where and how the company operates. The strategic and the financial analycis have made the foundation for the forecasting of the budget in the future. The results of this budget are a DCF model, which does not give a static valuation of the Shareprice. On top of the DCF model, there has been build a Monte Carlo simulation. A simulation that not only shows which factors are the most sensitive for the analysis. It has endeed opened the eyes and stated the postulate from the author of this thesis. Value Propositions are extremely sensitive for very small changes in the assumptions of the future. Endeed this model has shown that when modeling on many assumpitons, the values given by the model can change dramatically. Leaving an analyst with a loss or gain they had not expected. Despite this, the model concludes that G4S PLC are undervalued. This of course assumes that the model is using every important information and are correct, which can be argued in a large assumption.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages90
SupervisorsSøren Plesner