question business valuation

/in /by

Instructions

Although TESLA is most firmly implanted in the public consciousness as a pioneer and as a major player in the electric car space, in fact, GENERAL MOTORS also is a very serious entrant. The company’s CRUISE unit is addressing unmet emerging market opportunities in electric vehicles and self-driving vehicles.

Since CRUISE is a GM subsidiary, it does not trade separately in the open market. Estimation of its value arises in two contexts. The first is the annual test of goodwill impairment. The second is the very real possibility of going public…i.e., a spin-off IPO. Your task is to be a financial economist, or an accounting firm, or an investment bank, or a commercial bank, or an underwriter or a law firm involved in creating a valuation report to be used in the goodwill impairment test section of GM’s annual 10-K report, or in negotiations, SEC registration or the going public public process.

In an earlier FORUM assignment, you have previously found data for several SIC (3711 Auto) or NAIC (7372 Software) codes. You are also provided (below) several background articles on the industry. Note that our esteemed classmate, Kyle Miele, is the writer of the document called “2019 GUIDELINE COMPANIES-Discussion-GM’s Cruise Unit.docx,” which is attached below. For those who didn’t understand their grade on WEEK 5’s LONG POST, this write-up might aid in understanding the qualities of a 700-level course submission.

Here are the questions:

1) Describe the valuation (and its scope) assignment that you are addressing, as if you were a consulting firm that is retained to do an analysis.

2) Using the background articles provided, write between two and five typed (double-spaced) pages about the industry in which GM Cruise operates. Consider both microeconomic and macroeconomic trends. Consider industry-specific information that you glean from the documents. Consider battery, AI, regulatory and competitive information.

3) Giving considerable detail, propose which valuation multiples and metrics from you feel would be valuable or appropriate in placing a value on GM’s Cruise unit.

4) Now proceed to a final write-up, which summarizes the steps taken above and as output offer your formal valuation estimate of GM’s CRUISE subsidiary. Your write-up should have a well-formatted reference list and whatever exhibits you choose to find, create and provide.

Since TURNITIN can only accept one document, you will submit your main task, a WORD or PDF narrative document, clearly labeled with team name and contributing members here in this assignment area. The next two documents need to be submitted to me, clearly labeled with team name and contributing members, by Sakai messaging or by email. For your calculations, submit an EXCEL file, with the team members names on the EXCEL workbook. You will also provide a team presentation, either via Camtasia/PPT, or Screencast-o-matic, or ZOOM, or PANOPTO. YOUR GRADE WILL DEPEND LESS ON THE EXCEL FILE, MOSTLY ON THE WORD/or PDF DOCUMENT, AND LESS ON THE PRESENTATION (narrated PPT, or ZOOM, etc as described just above) DOCUMENT/FILE.

1-WORD or pdf document describing everything describing your research and calculation. Format this in any way you think adds to the reader’s comprehension, I am agnostic wrt formatting. STATE THE TEAM’s NAME. PUT THE NAMES OF STUDENT CONTRIBUTORS ON THE DOCUMENT.

2-EXCEL document showing valuation calculations. STATE THE TEAM’s NAME. PUT THE NAMES OF STUDENT CONTRIBUTORS ON THE DOCUMENT.

3- Create a PPT document which is your “presentation.” This does not need to have video* of the team doing the talking, but it does have to include audio. PPT lets you record your voice, but there are many equivalent routes. You can do this with Panopto, Camtasia, ZOOM, Screencast-o-matic, Screencast, etc. There are many recording PPT programs available. I recommend Screencast-o-matic or ZOOM. PUT THE NAMES OF CONTRIBUTORS ON THE DOCUMENT.