Valuation – companhia de ferro ligas da Bahia – Ferbasa

Abstract

The evaluation of projects and companies is an important step in understanding the real aspects of the investment. In this line, studying evaluation methods established in a situation of uncertainty and comparing them with previously developed exercises is relevant to the progress in understanding the methods that are best suited for specific sectors and companies. In this article, the Valuation of Companhia de Ferro Ligas da Bahia - FERBASA is analyzed, using the Discounted Cash Flow (Free Cash Flow to the Firm - FCFF) method, the most used method for valuing companies in Brazil, according to Soute et al (2008) for industry and commerce. For this purpose, information from the Balance Sheet, the Income Statement for the Year (DRE) and the Cash Flow Statement (DFC) for the 4Q20 were used, as well as the analysis of the prices of the preferred shares of the referred company (FESA4) in the period comprised between January 2018 to December 31, 2020. Thus, this study identifies that the 2019 downward bias with the Pandemic scenario of the new Coronavirus caused an increase in risk aversion on part of the investors, with this, FESA4 presented a devaluation of 35.2% at the end of March, facing on 12/31/2019, being quoted at R $ 12.97, it may have been reversed with the resumption of the international economy from the second half of 2020 onwards, presented an expectation of an increase in the value of commodities for 2021, with results for FESA4 an increase of 47.3% already at the end of June / 2020, compared to the end of March / 2020. It appears that the assets were undervalued by around 39.9%, compared to the value obtained through the Valuation of this work, as the company presented excellent results in 2020 with the reversal pointed out above.