actual price of the stock is $35.50, what is your assessment of the proposed operating
plan? What are some actions the company can take to improve the projected operating
plan and thus the intrinsic value? The actions must be explained in depth as to why and
how the actions can improve performance; ROIC, FCF, and ultimately the intrinsic
value. This means that you have to create scenarios to illustrate the quantitative
changes to the data. You must create three scenarios: one where you have made
adjustments to the operating ratios to improve liquidity, one where you have added
adjustments to improve the asset management ratios, and then a sheet that also
includes adjustments to the financing policy, specifically the assumed WACC. In the
original operating plan management assumed that WACC would remain the same over
the four years. However, if the liquidity position is improved and the company is more
efficient in asset utilization, debt financing is likely affected. Each scenario will be on a
separate sheet, meaning you will have a total of four new sheets added to your BAM.
The scenario sheets should be labeled as follows (or something similar).
“AY19 FY20-23 S1” – Improve liquidity
“AY19 FY20-23 S2” – Improve liquidity