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Financial Analysis of Nokia

This document analyzes Nokia using several valuation models and financial analysis methods. It evaluates Nokia's revenues, investments, inventory, property and equipment, goodwill and intangibles, debt, and financial reporting quality. The analysis uses discounted cash flow valuation, dividend discount model, and present value of free cash flows to equity to estimate Nokia's intrinsic stock value. Key financial ratios are also calculated and adjusted for items like mark-to-market investments and goodwill to assess Nokia's performance and financial position.

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Shehry Vibes
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116 views2 pages

Financial Analysis of Nokia

This document analyzes Nokia using several valuation models and financial analysis methods. It evaluates Nokia's revenues, investments, inventory, property and equipment, goodwill and intangibles, debt, and financial reporting quality. The analysis uses discounted cash flow valuation, dividend discount model, and present value of free cash flows to equity to estimate Nokia's intrinsic stock value. Key financial ratios are also calculated and adjusted for items like mark-to-market investments and goodwill to assess Nokia's performance and financial position.

Uploaded by

Shehry Vibes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FINANCIAL ANALYSIS OF NOKIA

Discounted Cash Flow (DCF) Valuation


Capital Asset Pricing Model (CAPM)
CAPM is a theory concentrated with deriving the expected rates of return on risky assets based
on the assets' systematic risk levels. Systematic risk is the variability of returns that is due to
macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.
 Rates of Return
 Systematic Risk (β) Estimation
 Expected Rate of Return

Dividend Discount Model (DDM)


The Dividend Discount Model (DDM) is a technique for estimating the value of a share of Nokia
Corp.'s common stock issue as the present value of all future dividends.
 Intrinsic Stock Value (Valuation Summary)
 Required Rate of Return (r)
 Dividend Growth Rate (g)

Present Value of Free Cash Flow to Equity (FCFE)


The FCFE valuation approach estimates the value of equity as the present value of future FCFE
discounted at the required rate of return on equity.
 Intrinsic Stock Value (Valuation Summary)
 Required Rate of Return (r)
 FCFE Growth Rate (g)

Analysis

Analysis of Revenues
 Revenue Recognition Accounting Policy
 Revenues as Reported

Analysis of Investments
 Investment Accounting Policy
 Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
 Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)
 Adjusted Net Profit Margin
 Adjusted Return on Equity (ROE)
 Adjusted Return on Assets (ROA)

Analysis of Inventory
 Inventory Accounting Policy
 Inventory Disclosure

Analysis of Property, Plant and Equipment


 Property, Plant and Equipment Accounting Policy
 Property, Plant and Equipment Disclosure
 Property, Plant and Equipment Ratios (Summary)
 Average Age
 Estimated Total Useful Life
 Estimated Age, Time Elapsed Since Purchase
 Estimated Remaining Life

Analysis of Goodwill and Intangible Assets


 Goodwill and Intangible Assets Accounting Policy
 Goodwill and Intangible Assets Disclosure
 Analyst Adjustments: Removal of Goodwill
 Adjusted Ratios: Removal of Goodwill (Summary)
 Adjusted Net Profit Margin
 Adjusted Total Asset Turnover
 Adjusted Financial Leverage
 Adjusted Return on Equity (ROE)
 Adjusted Return on Assets (ROA)

Analysis of Debt
 Total Debt (Carrying Amount)

Financial Reporting Quality

Aggregate Accruals
Financial reporting quality relates to the accuracy with which Nokia Corp.'s reported financial
statements reflect its operating performance and to their usefulness for forecasting future cash
flows.
Aggregate accruals deriving measures of the accrual component of Nokia Corp.'s earnings.
 Balance-Sheet-Based Accruals Ratio
 Cash-Flow-Statement-Based Accruals Ratio

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