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Bank of Scotland consortium, where the transaction price was approximately €72billion and in the end, this investment was found to be worth nearly zero. Investors have lost billions of pounds and dollars amidst hypes of valuations in practically everything where one may look for an opportunity to invest safely and expect returns. One of the reasons for such losses is that investors are not sufficiently well informed about their investment decisions that they are making or the risks that they are taking on. Buyers tend to depend upon market information published by various organisations or rating agencies. The irony is, these agencies themselves have been inflating the values amidst their own problems. Accordingly, the valuation of companies should no longer be treated as sacrosanct. The specialised lengthy and complex process that companies carry out to make decisions pertaining to mergers and acquisitions can no longer be taken for what it is. Every investor buying shares in a listed company should have reasonable visibility into the value of the company so that he/she can judge the risks and develop balanced portfolios.
This dissertation will document comprehensively the current generally accepted concepts and methodologies of company valuation techniques. In addition it will be my endeavour to propose an integrated model in which the investors can apply data and information and evaluate the company value with a reasonable level of accuracy.
In this dissertation an effort has been made to address the problems related to the methodology of valuations that has been adopted recently to predict the net worth of companies. The current financial valuation techniques of a company primarily comprise of four methods (Jacob, 2004: pp1-4 and Fernandes, 2007: pp2-19);
All four methods result in different ways of thinking and often in different valuations. The investors normally do not understand which method is more suitable for them to use for making the most informed
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Both the principal subsidiaries are clearing banks. From the Royal Bank of Scotland’s domestic origins, the bank has grown and developed to be a major global banking operation about 42% of the bank’s income come from international operations. The Royal Bank of Scotland is now the world’s sixth largest by market capitalization and the second largest bank in the UK and Europe.
Different males and females were asked to fill the questionnaire consisting of 5 to 7 questions regarding the topic. The number of respondents were 46 consisting of 29 males and 17 females who were selected randomly. INTRODUCTION The topic chosen is “Demand and Supply” and “elasticity”.
Ways in which forces within the Macro marketing environment affect the company’s ability to market its products successfully.
Organizations do not exists in vacuum, the immediate environment which consists of the political, social, cultural, economic and legal environments impact on the nature of the operations and the ability of the organization to operate competitively in the industry.
The Royal Bank of Scotland fell prey to the changes taking place within the banking sector, and suffered immensely in the financial crisis of 2007-08. According to reports, the bank witnessed a massive fall in its stock prices during the year 2008 whereby 13% drop in its share price, leaving traders concerned about its liabilities and stability.
An overview of the UK banking industry is considered along with this financial analysis. The financial analysis covers the bank’s common size income statement and balance sheet. In addition, financial performance evaluation ratios on the bank’s liquidity, solvency, and return on investment and capital structure have been used to draw conclusions about the bank’s financial health and performance.
In these times of turmoil in the financial market, identifying safe investments has become a complex task. The decision making for investments in businesses has, therefore, become a very challenging aspect for investors in more recent times. Over the past decade, there have been numerous examples of creative accounting.
Changes in inflation and interest rates are all likely to result in either expand or contract the lending capacity and profit margins of banks. Changes in exchange rates imply fluctuations in the reported earning of companies having subsidiaries in international countries.
It must be noted that there are numerous other reasons as to why firms would chose to take this path. Such could include (Margsiri et al):
The global corporate community has shown an ever-increasing trend for mergers and acquisitions. The foregoing is not only in response to the indicated list of reasons, is also a product of the increased competitiveness of globalisation and low interest rates making large sums of capital available that is seeking investment (Investors Group).
Banks provide stability in the financial market, posting a large loss no matter how large or prestigious the bank is. Confidence in the banking sector is not only affected by controversies but it reverberates to the entire banking community and financial sector. The instability brought about by controversies eventually affects the economy of the United Kingdom as a whole.
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