DISCOUNTED CASH FLOW VALUATION OF MODERNFORM GROUP PUBLIC COMPANY LIMITED.

Abstract

This study was to assess the value of Modernform Group Public Company Limited, which is one of the major firms in furniture and related product manufacturing industry in Thailand. The objective of this study was to determine the appropriate intrinsic value of the company’s equity by using the discounted cash flow method (DCF method) which is based on the underlying fundamental of the company’s operation. This method relies on future expectations of free cash flows to the firm discounted back by an appropriated discount rate to value the company at its present value. The research methodology for this study has been done by quantitative method by performing macro-economic analysis, industry analysis, competition analysis, the company’s financial statement analysis and valuation. The data was obtained from the company’s annual report and from the Stock Exchange of Thailand during the year 2008-2013. The comparative review of the estimated value of the firm according to the DCF method and the actual market price on a specific date would reveal the over or undervalued stock price and then give a signal to investors on their investing decision. KEYWORDS: Valuation / Discounted cash flow / Free cash flow / Time value of money / Equity value