CASE STUDY

Fatima Fertilizer Company Limited: Valuation and sensitivity analysis

Sana Tauseef

First published: 20 April 2018


Abstract

This case concerns the valuation of a public listed company's stock in Pakistan, using the Free Cash Flow to Firm (FCFF) valuation model. The primary purpose of this case is to give students an opportunity to identify the best discounted cash ow (DCF) model to value the stock for the given company. It requires computation of relevant cash flows and terminal values and enhances understanding of the valuation risk involved due to fluctuation in the key assumed variables. The case can be used to teach undergraduate finance courses that cover valuation models.

Keywords: Discounted cash flow valuation models, Fertilizer, Debt-free status, Dividend payout, Sensitivity analysis

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