Corporate finance project financial analysis for dar al dawa

Dar Al Dawa Financial Analysis

Talal Abu Ghazaleh Graduate School of Business

Team Members

• Abdel Fattah Al Shadfan

• Dafi Jaradat

• Luay Dababneh

• Rima Akel

• Thuraya Taleb

Agenda

Introduction & Company Overview

Introduction & Company Overview

Stockholder Analysis

Stockholder Analysis

Investment Projects

Expansion into the Mena Region New Market Development

Investment Projects

Research & Development

Investment Projects

Investment Projects

Investment in Affiliates

Risk & Return Analysis

Risk Type Explanation

Currency Fluctuation

Algerian Dinar fluctuation caused a loss of 1.175 M JOD in 2012

CompetitionMany competitive companies are targeting the same markets

Political Riskhas taken a toll on investment intentions and caused a major concern on any future projects

Performance Profile Ratios

Ratio JPHM Hikma DAD Arabia

Cash Ratio 0.36 0.43 0.36 0.01

ROE 0.03 0.13 (0.07) 0.125

ROA 0.02 0.06 (0.04) 0.073

REC .Turnover 3.97 3.379 1.52 2.939

Days in REC 92 108 240 25

Payables Turnover 4.39 1 4.97 9

Days in Payables 83 280.51 73 42.93

Inventory Turnover 1.14 2.2 2.48 3.2

Days in inventory 319 164 147 114

Gross profit Margin 72% 45% 40% 38%

Net Profit Margin 5% 10% -8% 11%

COGS / Revenue 28% 55% 60% 62%

Performance Profile Ratios

Performance Profile Ratios

Performance Profile Ratios

Capital Structure

Ratio JPHM Hikma DAD Arabia

Interest bearing debt

7,303,232 608,187,000 24,861,219 5,595,389

Equity 65,526,890 847,850,000 49,784,725 44,573,454

Capital (debt + equity)

72,830,122 1,456,037,000 74,645,944 50,168,843

Debt / capital 10% 42% 33% 11%

Equity / Capital 90% 58% 67% 89%

Capital Structure

DAD 2012 2011 2010 2009 2008

Interest bearing debt

24,861,219 19,574,279 16,234,830 14,080,966 4,199,787

Equity 49,784,725 53,436,101 59,668,502 54,461,238 51,522,763

Capital (debt + equity)

74,645,944 73,010,380 75,903,332 68,542,204 55,722,550

Debt / capital 33% 27% 21% 21% 8%

Equity / Capital 67% 73% 79% 79% 92%

Loan Funding

Optimal Capital Structure

Dividends Policy

Less Shareholder

Wealth

Short-Term Loans

Valuation

FCF Calculation

2013 2014 2015 2016 2017Terminal

value

Discount factor

1.2183 1.4843 1.8083 2.2030 2.6839 2.6839

free cash flows

(2,787,376) 754,519 7,028,922 9,909,723 14,043,583 81,914,335

Discounted FCF

(2,287,923) 508,349 3,887,102 4,498,260 5,232,469 30,520,292

Discounted Cash Flow Method

Valuation

Valuation

NPV of FCF 42,358,550

Value of debt (24,861,219)

Cash and investment 11,607,103

fair value of the firm 29,104,434

No. Of shares outstanding 25,000,000

Fair value per share 1.16

Conclusions & Recommendations

Conclusions & Recommendations

THANK YOU!!

QUESTIONS?!