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Komatsu and the Farm and Construction Machinery Industry

Komatsu and the Farm and Construction Machinery Industry. Mod 8 John Rojo. The Company. Japanese manufacturer vehicles and machinery for construction, mining, and agriculture Includes excavators, backhoes, skid loaders, forest machines, forklifts, cutting lasers..

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Komatsu and the Farm and Construction Machinery Industry

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  1. Komatsu and the Farm and Construction Machinery Industry Mod 8 John Rojo

  2. The Company • Japanese manufacturer vehicles and machinery for construction, mining, and agriculture • Includes excavators, backhoes, skid loaders, forest machines, forklifts, cutting lasers.. • There is no specific farm equipment but many duel use products

  3. Key Financial Figures (All figures in million Yen) • Cash-¥93,620 • Total Assets ¥ 2,517,857 • Total Liabilities/ Equity- ¥ 1,265,162 & ¥ 1,252,695 • Net Sales- ¥ 1,884,991 • Operating Income- ¥ 211,602 • Net Income – ¥137,135 • To convert to dollars it is approximately ¥ 100 to $1

  4. Abnormal Enterprise Income Growth Model • This gets rid of accounting methods for the valuation as well as looks at earning potential if you remove cash from the company • Uses idea that earnings grow at the required rate of return • That is important to consider if there are dividends

  5. Inputs Sales growth is historic over 10 Years. Terminal Sales growth is the expected world GDP growth EPM and EATAO are from last few Years. WACC is calculated using various Inputs and terminal WACC is Inputs from historic averages

  6. Abnormal Enterprise Income Growth Model

  7. Comparison Notice that they don’t match up identically. This is something I have tried to work on. It due to me using a current and terminal WACC. You can see this in the bottom two l lines. It shows the number I divided Total to be Capitalized greatly affects the results. I am working on this though

  8. Possible differences • The major problem I encountered with my AGR model and the other two is that they don’t equal right now • From the previous slide we see that it is because of the different WACCs used • I am trying to build the model in a way that would address this • This solution only came about after discussing it with my group which is why it is not done

  9. Questions

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