+PlaySide Assignment Specifications and Deliverables 6. 6.1 Assignment Specifications and Deliverables Assignment Specifications You are required to build a three-statement Discounted Cash Flow model (income statement, balance sheet, cash flow statement). You are to write a report outlining the assumptions driving your model and a justification for the approach used to forecast each individual line-item. Using an assumed WACC of 10% generate a per share value for PLY. You are also required to generate a sensitivity and scenario analysis. Using the excel spreadsheet and this report you are to write your assignment answering the following questions: Q1 Forecast Justification and Valuation a) What are the assumptions in each key line item driving your model and how have you justified this? b) Justify the length of your forecast horizon and terminal growth rate and explain how you computed your DCF valuation Q2 Industry Evolution The gaming industry has seen a transformative few years defined by groundbreaking strides in Al, developments in computing for both personal and enterprise spheres, an accelerating shift toward transmedia content and disruptive distribution methods a) Evaluate which industry trend (or trends) will be most impactful to PlaySide's operations, and clearly articulate how this is reflected in your pro-forma forecasts and forecast horizon b) Considering this, recommend a strategy that management (not currently being pursued) could adopt to improve the value of this business. You are free to explore this strategy through any channel but remember to explain and justify why you think the strategy is value accretive for shareholders. Q3 Financing and Cost of Capital a) Based on your pro-forma projections and your own analysis, how will PLY finance its operations and future growth? In your response you should consider a range of financing options and justify your response using relevant ratio analysis Q4 Testing Valuation Robustness a) Conduct a range of sensitivity analyses on your base case valuation. You should justify which assumptions you have selected and why, as well as discuss the results of your sensitivity analysis. b) Outline a scenario that tests the key risks posed by your valuation thesis presented in Q1. Which line-items would be affected by this scenario and what is the overall impact to shareholders? *Advice: When discussing your analysis, do not get mired in forecast technicalities - keep it simple and focus your comments on your results. State things as simply and intuitively as possible and do not just present results for the sake of it. Results need to be critically evaluated and your writing should be analytical rather than descriptive. Remember, valuation is like a debate where you are the first, second, and third speaker so survey the appropriate data, form a coherent position, and logically communicate it to the best of your ability. Good luck! Feel free to make use of the discussion board for any queries relating to this assessment task.