Food Empire: Valuation and Investment
(4 pages of text)
Case (Pub Mat)
Food Empire Holdings Limited (Food Empire) was a food and beverage brand owner and manufacturer of instant beverage products, frozen convenience food, confectionery, and snacks. Its main markets were Russia and Ukraine. When the political tensions between Russia and Ukraine erupted and their currencies depreciated in 2014, Food Empire’s bottom line was badly affected: its share price dropped 71 per cent in 30 months. In light of these developments, investors were not sure if they should sell their investments in Food Empire. Using financial statement analysis and various valuation concepts—including net tangible assets, dividend discount models, and peer multiples—it was hoped that the best course of action could be determined.
This case can be used in an undergraduate or MBA course in investment analysis. It presents an opportunity for students to evaluate the intrinsic value of a company by interpreting the
- liquidity ratios,
- solvency ratios,
- asset efficiency ratios,
- profitability ratios, and
- market value ratios.
Singapore, Large, 2016
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