The media and entertainment business in US shows stable growth over many years. Present study aims to discover if current share prices reported by the top companies, which are 21st Century Fox, CBS, Comcast, Viacom, Time Warner and The Walt Disney Company, express their intrinsic value and what company is worth to invest. Financial statements reported in 2016 are analyzed with ratios, discounted cashflows, multiples and share indicators. Fundamental analysis is used to define, which company has the best investment opportunities, thus what shares to buy. Technical stock analysis is used to define the best timing to do that. Research determined that Time Warner shows the best investment conditions; however, shares acquisition is not recommended due to missed moment – from the date official statements were issued, share prices have soared. Study also includes country analysis (US) and industry analysis (global media and entertainment market).
Table of Contents
1. Introduction
1.1. Study goals and research question
1.2. Media and entertainment market overview
2. Literature review
2.1. Company ratio analysis
2.1.1. Asset-position ratios
2.1.2. Financial risk and liquidity ratios
2.1.3. Earnings and profitability ratios
2.2. Company evaluation with Discounted Cash Flows
2.3. Company evaluation with multiples
2.4. Company share indicators analysis
2.5. Media and entertainment companies’ valuation specific
2.6. Technical stock analysis
3. Empirical research
3.1. Introduction of the companies
3.1.1. Companies overview
3.1.2. Data
3.2. Method and Procedure
3.3. Results
3.3.1. Country analysis
3.3.2. Industry analysis
3.3.3. Company analysis
3.3.3.1. Application of ratio analysis
3.3.3.1.1. Asset-position ratios
3.3.3.1.2. Financial risk and liquidity ratios
3.3.3.1.3. Earnings and profitability ratios
3.3.4. Application of Discounted Cash Flows
3.3.5. Application of multiples
3.3.6. Application of share indicators analysis
3.3.7. Media and entertainment companies’ evaluation specific ratios
3.3.8. Fundamental analysis summary
3.3.9. Application of technical stock analysis
3.3.10. Analysis summary and answering the research questions
4. Discussion
4.1. Critical overview of the main findings
4.2. Further implication
5. Conclusion
Objectives and Topics
The primary objective of this thesis is to evaluate major US media and entertainment companies to determine if their current share prices reflect their intrinsic value and to identify which company offers the most promising investment opportunity. The study employs fundamental and technical financial analysis on 2016 financial data to provide actionable investment insights.
- Theoretical models of company valuation (DCF, Multiples, Ratio Analysis).
- Empirical analysis of top US media firms (21st Century Fox, CBS, Comcast, Viacom, Time Warner, Disney).
- Financial health and profitability assessment via ratio analysis.
- Market and industry-specific context within the US and global media landscape.
- Technical stock analysis to determine optimal investment timing.
Excerpt from the Book
2.1. Company ratio analysis
Variety of ratios used in fundamental analysis is constantly developing; however, there is a basic scope of figures that is more commonly used. In general, ratio analysis focuses on information contained in financial statements of the companies. It makes sense to look at the ratios in comparison, either with previous years in order to evaluate the company’s performance, or with other companies within the industry in order to evaluate competitive advantage. Ratio analysis itself could be not sufficient for making investment decision. However, it is still important starting point as serves an indicator of company’s current strength or weakness. Once indicating an improvement, investor can win paying attention at early stage, or vice versa. Successful companies usually have solid ratios, as any negative deviations may provoke a significant shares sell-off.
Summary of Chapters
1. Introduction: Outlines the research goals and the complexity of the investment process in the media industry.
2. Literature review: Discusses theoretical frameworks for financial valuation including ratio analysis, Discounted Cash Flows, and technical stock indicators.
3. Empirical research: Applies the theoretical models to the selected top US media companies using 2016 financial statements.
4. Discussion: Critically reviews the research findings, potential biases, and limitations of the applied methodologies.
5. Conclusion: Summarizes the key findings and recommendations regarding investment decisions in the US media market.
Keywords
company valuation, financial analysis, intrinsic value, market value, investment decision, US media and entertainment business, ratios, Discounted Cash Flows, multiples, technical stock analysis, shareholder return, stock performance, profitability, risk management, business strategy.
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on evaluating top US-based media and entertainment companies to assess whether their market share prices are justified by their intrinsic values and to identify the best investment options.
Which companies are examined in this study?
The sample includes six major global players: 21st Century Fox, CBS, Comcast, Viacom, Time Warner, and The Walt Disney Company.
What is the central research question?
The study addresses two main questions: 1) Do current share prices of US media companies reflect their intrinsic value? and 2) Which US media company offers the best investment opportunity?
What methodology is used to evaluate the companies?
The research uses a combination of fundamental financial analysis, including ratio analysis, Discounted Cash Flows (DCF), and multiples, alongside technical stock market analysis.
What aspects of the companies are covered in the main body?
The main body covers the financial structure, liquidity, profitability ratios, valuation of share indicators, and an empirical analysis of real-world financial data from 2016.
Which keywords best characterize the work?
Key terms include company valuation, financial analysis, intrinsic value, investment decision, and US media market.
Why was the media and entertainment industry selected?
The industry was chosen due to its stable growth and the researcher's interest in the complex relationship between creative products, licensing revenue streams, and corporate valuation.
What was the conclusion regarding Time Warner?
Fundamental analysis indicated that Time Warner had the strongest performance metrics; however, the study warns that share prices had increased significantly by the time the analysis was completed, making the initial investment recommendation less favorable.
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- Ekaterina Valeeva (Autor:in), 2017, Evaluation of companies in media and entertainment business. Theoretical models of company evaluation and practical application on major US media companies, München, GRIN Verlag, https://www.grin.com/document/463244
