CU-Boulder Business School Students On The Mark In Vail Value Competition

Published: May 7, 1997

Here’s a question for those of you who aren’t afraid of numbers: What is the dollar value of Vail Resorts Inc. and why?

This was the problem posed to students at the College of Business and Administration at the University of Colorado at Boulder who participated in the third annual Shell Financial Analysis Competition. A portion of grant given to the business college by Shell Corporation is earmarked to reward undergraduates in finance each year.

The winning team took Vail Resort’s income statements, balance sheets, stock reports and forecasted capital expenditures – including those of newly acquired Ralston Resorts – and came up with a value amazingly close to the corporation’s actual value.

Michele Taluba, a junior in the College of Business, said her team spent between 150 and 200 hours systematically studying Vail Resorts and the volatile ski industry. “We were very thorough. We didn’t want to make assumptions,” Taluba said.

Taluba’s team used two different formulas to determine Vail’s worth. Their discounted cash flow analysis valued the company at $746,045,000, or $21.22 a share. Their comparable company analysis put Vail at $725,659,768, or $20.64 a share. Taluba said she was pleased to find Vail’s stock at $20.12 the morning of the May 2 competition.

Professors in the College of Business and Administration evaluated team reports and passed the best ones onto a panel of judges. The panel included Ron Melicher, chair of the school’s finance and economics division, Eric Resnick, treasurer and director of investor relations for Vail Resorts Inc., and his assistant, Daniel Graves, and CU alum and Smith Barney Senior Vice President Marty Erzinger.

This year’s winners:

• First place ($500): senior Anthony Swatski, junior Michele Taluba, senior Andy Blomquist and senior Mike Hovey.

• Second place ($200): seniors Kevin Sullivan, Eric Scott and James Mazzarisi.

• Third place ($100): senior Yuriy Verkhovoy, senior Theodore Lau, senior Gabor Lebovich and Shawn Penrose.