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American Greetings Professional Summary

Tyler Reames Oct 14, 2013

American Greetings Executive Summary – FIN 3717

Executive Summary

American Greetings is the second largest greeting card publisher in the U. T., behind Characteristic. The company can be involved in full and on-line sales. Characteristic is the main competition for American Greetings. Lately, social media features caused a decline in the greeting card sector. Both American Greetings and Hallmark have got begun creating electronic credit cards to take advantage of the digital trend. Problem

By the end of 2012, American Greetings just visited the bottom of its peer group, which has a low EV-EBITDA multiple, market-to-book below you, a 6x PE proportion, and a share cost of $12. 51 that had decreased significantly in the months previous. American Hey there has historically used a share repurchase strategy in times of low fairness. This is a good security if the share price is straight down temporarily, however the low valuation could also be an indication of much larger trouble in which it would be wise to preserve funds. Both S& P and Value Collection anticipated modest growth pertaining to American Greetings in the arriving years. Research

We all conducted a great analysis in january 2012 through 2015 to determine the worth of the organization. Our research began with calculating the operating funds flows (OCF = functioning income * (1 – 0. 4) - ∆NWC): Operating Cashflow (millions)

2011 118

2012 83

2013 eighty six

2014 88

2015 91

Operating Cash Flow (millions)

2011 118

2012 83

2013 86

2014 88

2015 91

We after that determined a WACC of 5. 37% based on an expense of fairness of eight. 85% (calculated with beta of 1. seventy six, risk cost rate of 0. 05%, and industry risk superior of 5%) and approximated the cost of debt at 6%. Then, we calculated the discounted money flows (DCF = OCF / (1 + WACC)^Period): Discounted Earnings (millions) Period

2011 112. thirty-three 1

2012 75. 12 2

2013 73. 43 3

2014 71. 77 5

2015 70. 18 5

Discounted Cash Flow (millions) Period

2011 112. 33 1

2012 seventy five. 12 2

2013 73. 43 3

2014 71. 77 some...