Assessment 2 – Investment Opportunity Proposal (Weighting: 60%)
Overview
Identify a potential investment opportunity (sample scenarios below, or equivalent) that includes both product and related service elements. Define and justify the revenue model(s) that the investment will employ to generate income. Prepare detailed Profit & Loss and Cashflow projections for a 5-year period, and appraise the investment using appropriate financial evaluation methodologies. Prepare a presentation and a detailed report as outlined below.
Deliverables and Mark Allocation
1. Live Q+A with Presentation – 30 marks
The live Q+A session (10 minutes max) will be based on a slide presentation (.pptx) and will be addressed to a mixed audience of investors and financial institutions, focusing on clarity, relevance, and financial insight rather than overly detailed accounting data.
- Overview of the Investment – 5 marks
Provide a concise introduction to the investment opportunity, product/service elements, and target market. Briefly describe the business concept and target market (max 150 words) to contextualise financial assumptions.
- Revenue Model and Financial Projections – 10 marks
Explain the revenue model(s) and summarise financial projections, highlighting expected profitability, margins, growth rates, and OPEX%. All assumptions must reflect marketrelevant benchmarks (e.g., comparable industry growth rates, margins, and cost structures).
- Benefits, Financial Risks, and Sensitivity Analysis Findings – 10 marks
Present the major financial benefits and risks, and use visualisations to show how sensitivity analysis affects projected profitability and valuation. Demonstrate the impact of changing key assumptions such as sales growth, gross margins, OPEX%, or interest rates.
- Valuation, Funding, and Exit Strategy – 5 marks
Summarise the investment valuation and funding requirements. Briefly describe your proposed exit strategy (e.g., trade sale, management buyout, IPO, or asset divestment) and explain how it affects valuation and investor ROI.
2. Detailed Report (.pdf) – 30 marks
This report provides a comprehensive financial analysis and justification for the investment proposal. It must use real-world, publicly available data where possible and be supported by clear references to the Excel model.
- Rationale for Revenue and Cost Selection – 5 marks
Justify selected revenue and cost elements using real-world data from comparable businesses, market research, or industry reports.
- Revenue Model Justification – 5 marks
Explain how the chosen model(s) fit the product/service mix, customer needs, and market context. Support your approach with referenced examples of real businesses using similar models.
- Profit & Loss and Cashflow Projections – 15 marks
Provide transparent five-year projections for income, costs, and cashflows. Use marketappropriate assumptions for growth, margins, and operating costs, referencing credible industry data.
- Investment Valuation, Funding, and Exit Strategy – 10 marks
Provide an investment valuation using methods such as DCF, NPV, or IRR. Include a realistic discussion of funding mix (debt vs. equity) and justify assumptions about discount rates and growth. Describe at least one exit strategy and integrate it into valuation calculations.
- Sensitivity Analysis – 20 marks
Perform detailed sensitivity testing of key financial drivers such as revenue growth, gross margin, OPEX%, and cost of capital. Present visual results showing how each variable influences profitability, cashflow, and valuation.
- Financial Risk Analysis and Mitigation – 10 marks
Focus specifically on financial risks, excluding general market or operational risks. Typical risks may include:
- Interest rate fluctuations affecting loan repayments
- Credit and counterparty risk in customer payments
- Liquidity risk due to timing differences in cash inflows/outflows
Outline appropriate mitigation strategies
- Clear Referencing to Excel Spreadsheet – 5 marks
Submission Instructions
Submit the following via Canvas:
- .pdf Detailed Report (30 marks)
- .pptx Slide Presentation for Live Q+A (30 marks)
The Live Q+A will occur after submission of the report and will assess clarity of communication, understanding of assumptions, and ability to respond to financial reasoning questions.
Sample Scenarios
All scenarios must include:
- Initial CAPEX investment
- Both product and service revenue streams
- Use of real-world references (preferably public companies)
- Market-justified financial assumptions (growth, margins, OPEX%)
1. Charging EV Infrastructure with Subscription Services
Real-world Reference: Ionity (Europe, private JV), ChargePoint (NYSE: CHPT), EVgo (NASDAQ: EVGO), Allego (NYSE: ALLG)
2. Renewable Energy + Maintenance Contracts
Real-world Reference: Ørsted (Nasdaq Copenhagen: ORSTED), BayWa AG
(Frankfurt: BYW6), Vestas Wind Systems (Nasdaq Copenhagen: VWS), Siemens Energy (Frankfurt: ENR)
3. Technology SaaS Platform + Consulting Services
Real-world Reference: Atlassian (NASDAQ: TEAM), HubSpot (NYSE: HUBS), Salesforce (NYSE: CRM)
4. Boutique Hotel + Event Management Services
Real-world Reference: Accor (Euronext Paris: AC), InterContinental Hotels Group (LSE/NYSE: IHG), Hyatt Hotels (NYSE: H)
5. Private Healthcare Facility + Wellness Services
Real-world Reference: HCA Healthcare (NYSE: HCA), Spire Healthcare (LSE: SPI)
6. Agri-Tech Platform + Equipment Sales
Real-world Reference: Deere & Co. (NYSE: DE), Trimble (NASDAQ: TRMB), AGCO (NYSE: AGCO)
7. Education Hub + Online Programme Services
Real-world Reference: Coursera (NYSE: COUR), Strategic Education (NASDAQ: STRA), Adtalem Global Education (NYSE: ATGE)
8. Smart Home Devices + Installation Services
Real-world Reference: Signify (Euronext Amsterdam: LIGHT, Philips Hue brand), Resideo Technologies (NYSE: REZI)
9. Online Retail Platform + Fulfilment Services
Real-world Reference: Amazon (NASDAQ: AMZN), Zalando (Frankfurt: ZAL)
10. Food Manufacturing + Subscription Meal Services
Real-world Reference: HelloFresh (Frankfurt: HFG), Nestlé (SIX Swiss Exchange: NESN)
11. Sports Complex + Membership Services
Real-world Reference: Planet Fitness (NYSE: PLNT), Basic-Fit (Euronext
Amsterdam: BFIT), Sporting Clube de Portugal SAD (Euronext Lisbon: SCP)
12. Mobile FinTech App + Advisory Services
Real-world Reference: PayPal (NASDAQ: PYPL), Block (NYSE: SQ), Adyen (Euronext Amsterdam: ADYEN)
13. Co-Working Space + Event Management
Real-world Reference: IWG plc (LSE: IWG), Workspace Group (LSE: WKP)
14. Organic Agriculture + Delivery Subscriptions
Real-world Reference: Hain Celestial (NASDAQ: HAIN), SunOpta (NASDAQ: STKL / TSX: SOY)
15. SaaS Cybersecurity Platform + Managed Services
Real-world Reference: Palo Alto Networks (NASDAQ: PANW), CrowdStrike
(NASDAQ: CRWD)
16. Electric Vehicle Manufacturing + Leasing Services
Real-world Reference: Tesla (NASDAQ: TSLA), Polestar (NASDAQ: PSNY), BYD
(HKEX: 1211 / Shenzhen: 002594)
17. AI-Driven HR Platform + Training Services
Real-world Reference: Workday (NASDAQ: WDAY), SAP (NYSE/Frankfurt: SAP)
18. Cloud Storage + Analytics Add-ons
Real-world Reference: Dropbox (NASDAQ: DBX), Box (NYSE: BOX
19. Green Construction + Maintenance Services
Real-world Reference: VINCI (Euronext Paris: DG), Skanska (Nasdaq Stockholm:
SKA B), Bouygues (Euronext Paris: EN)
20. Digital Marketing SaaS + Analytics Services
Real-world Reference: Adobe (NASDAQ: ADBE), HubSpot (NYSE: HUBS), Salesforce (NYSE: CRM)
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