Intern Report PWC | EssayIvy.com

Surname 1

Name of Student

Unit Title

Professor

Date of Submission

Intern Report: PWC

Executive Summary

I was attached at PwC on internship. The name PricewaterhouseCoopers was derived

from the combination of Price Waterhouse and Coopers & Lybrand after the merger in 1998. The

firm aims at building trust from its customers and the society, as well as solving important

problems facing the society. This focus forms the basis of the services that PwC offers and the

business management and strategy decisions that it makes.

I served as an intern at PwC. I worked under a manager and his team. I was involved in

data collection during company valuations. As such, my primary line of duty was business

valuation. Business valuation refers to the process of using a set of procedures in estimating the

economic value of the owner’s interest in a business or organization. Financial market

participants use business valuation when determining the price that they are willing to pay or

receive so as to affect the sale of an organization.

I was involved in the valuation of three companies. They included an IC company, Ve

Wong, and ThinTech Materials Technology Co., Ltd. However, the data collected for the IC

Company was too sensitive to be disclosed to an intern. As such, this research presents the

business valuation of Ve Wong and ThinTech Materials Technology Co., Ltd.

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I gained the ability of searching accurate data in a short time. I was actively involved in

data collection so as to come up with the data presented in this report. Secondly, I also enhanced

my skills in negotiating with the people who are more experienced than you is a critical point.

1.0 Company Overview

The name PricewaterhouseCoopers was derived from the combination of Price

Waterhouse and Coopers & Lybrand after the merger in 1998. The company was later rebranded

PwC on 20

of September 2010. However, the legal name was retained as

PricewaterhouseCoopers (Boobier 209). It is a multinational professional services network

whose headquarters are found in London, the United Kingdom. It is ranked the second largest

provider of professional services in the world. It is also one of the Big Four Auditors that also

includes EY, KMPG, and Deloitte (Venkat and Stephen 76). According to the rankings of Vault

Accounting, PwC has remained the most prestigious accounting firm for seven consecutive

years. It has also been ranked the best firm in North America for three consecutive years.

The firm is a network of firms found in 157 countries, 756 cities, and serving over

223,000 consumers. According to statistics obtained in 2015, the firm had 22% of its workforce

in Asia, 26% in Caribbean and North America, as 32% based in Western Europe. The global

revenues recorded for the financial year 2016 were $35.9 billion (Stacchezzini, Gaia, and

Alessandro 94). Out of this amount, the Assurance practice of the firm generated $15.2 billion

while the Tax practice generated $9.1 billion. On the other hand, the Advisory practice generated

$11.5 billion. This means that the top three revenue income earners for the firm are Assurance,

Tax, and Advisory practices.

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1.1 Company Presentation

1.1.1 History

As mentioned earlier, the firm was created from the merging of Coopers & Lybrand and

Price Waterhouse in 1998 (Ding, Rong, and Yuping 72). Both of the firms had been established

in the 19

Century.

Coopers & Lybrand

This was founded by William Cooper in 1854. It was an accountancy practice based in

London. William was later joined by his three brothers later, resulting to the renaming of the

accountancy to Cooper Brothers (Bagley 286). Later in 1898, Lybrand, Ross Brothers and

Montgomery were formed by Adam. A. Ross, Robert H. Montgomery, Edward Ross, and

William M. Lybrand. The Cooper brothers later in 1957 agreed to form an international practice

with a Canadian firm named McDonald, Currie and Co (Campbell, Andrew, and Joel 25). The

new international firm was named Coopers & Lybrand. In 1973, the three firms operating in

Canada, the U.S.A, and the UK dropped their individual names and adopted the brand name

Coopers & Lybrand. The expertise of Coopers & Lybrand in insolvency was expanded in 1980

by the substantial acquisition of Cork Gully, a leading firm operating in the UK (Meyer 45). A

merger was also formed between the Coopers & Lybrand in the UK with Deloitte Haskins &

Sells, leading to the birth of Coopers & Lybrand Deloitte. However, the name was reverted to

Coopers & Lybrand in 1992.

Price Waterhouse

It was founded by Samuel Lowell Price in 1849. He was an accountant based at London.

Price formed a partnership with William Hopkins Holyland and Edwin Waterhouse in 1865

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(Kerry 259). However, Holyland left the partnership to work alone and the firm was named

Price, Waterhouse & Co as from 1874.

The recognition of Price Waterhouse as an accounting firm grew towards the end of the

Century. The increasing trade relations between the United Kingdom and the United States

of America, Price Waterhouse opened an office in New York in 1890 to serve the new market

(Kerry 259). Due to the presence of a large, ready market, the firm expanded at a fast rate. The

original firm had been introduced in Liverpool in 1904 before other outlets were opened in other

parts of the UK. Later on, the firm opened offices in different countries by establishing separate

partnerships in individual countries. This implies that the growth and expansion of the PW was

attributed to organic growth between the firm and its collaborating firms as opposed to the idea

that it was an international merger.

PW and Arthur Andersen also attempted to take advantage of the economies of scale by

by discussing how they could form a merger in 1989 (Kerry 259). However, the negotiations

could not succeed due to the fact that there was a conflict of interests. Notably, Andersen had

strong commercial links with IBM. Additionally, the cultures of PW and IBM were radically

different. The merger was thus scrapped on the basis that the partners had different views of

business.

Later in 1998, a merger was formed between Price Waterhouse and Coopers & Lybrand,

forming the PricewaterhouseCoopers. The merger established a large professional consulting

branch and accountancy firms that generated its revenues (Van Mourik, Carien, and Peter 383).

The fastest growing practice under the new merger was the Management Consulting Services

(MCS). It also emerged the most profitable practice although it was cyclical. The growth during

the 1990s was attributed to the implementation of rather complex integrated ERP systems that

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were used in multinational companies. However, PwC had to sustain the pressure of avoiding a

conflict of interests by ensuring that some consulting services such as the design and

implementation of financial systems to its clients. It was involved in auditing the largest

companies in the world. As such, its consulting market was significantly adversely affected (Van

Mourik, Carien, and Peter 383). However, such conflicts of interest increased when new services

were developed. Such services included back office operations and IT outsourcing. As a result,

Ernst and Young sold its consulting services to Capgemini in 2000. The fallout from the

Worldcom, Enron, and other scandals involving financial auditing led to the passage of the

Sarbanes-Oxley Act in 2002 (Miihkinen 273). It limited the interaction between auditing

(assurance) and management consulting services. As such, PwC Consulting was established as

an independent entity rather than operating under the MCS division of PricewaterhouseCoopers.

The largest SAP consulting partner in Canada, Omnilogic Systems, was acquired by PwC

in 2000. Later in March 2002, PricewaterhouseCoopers, China acquired LLP affiliates in both

Hong Kong and China (Miihkinen 273). The company also announced in May 2002 that its

consulting activities would be operated as an independent entity. A CEO was also hired and

tasked with running the global firm. Wolff Olins, an external consutancy, was also hired to help

in creating a brand image for the new entity that was branded ‘Monday’. However, the entire

consultancy firm was later sold to IBM in October 2002 for around $3.9 billion in cash and stock

(Kumar 121). The consultancy business of PwC was thus absorbed into the IBM Global Business

Services. This increased the size and capabilities of IBM as rapidly growing consulting practice.

PwC later embarked on rebuilding its consulting practice. The first approach to this was

the acquisition of commercial services businesses such as Bearing Point and Paragon Consulting

Group in 2009 (Kumar 121). The approach continued through the acquisition of PRTM in

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August 2011 and Diamond Management & Technology Consultants in November 2010. The

firm also acquired Logan Tod & Co. in 2012. This is a digital analytics and optimization

consultancy. Additionally, Ant’s Eye View, a social media strategy development and consulting

firm, was also acquired by PwC so that it could aid in building upon the customer impact and

customer engagement of the Management Consulting.

It is worth notable that PwC strategized on acquisitions during this decade. It is one of the

marketing strategies that it uses to enter new markets. This was enhanced further on October

, 2013 by the acquisition of Booz & Company (Love 6). Additionally, the acquisition of BGT

Partners on Novermber 4

2013 contributed to the award of the Malcolm Baldrige National

Quality Award to PwC in 2014 (Scott 25). BGT was digital consultancy firm that had been in

operation as an independent entity for 17 years before the acquisition. This has enabled PwC to

be well-positioned to meet the ever-growing software service demands of customers.

1.1.2 Vision

The firm aims at building trust from its customers and the society, as well as solving

important problems facing the society. This focus forms the basis of the services that PwC offers

and the business management and strategy decisions that it makes (PwC. 1). Additionally, the

firm aims at demonstrating genuine leadership and it values it more than it values short-term

revenues. As such, the vision of the firm is to become the ‘leading professional services firm’. It

thus aims at achieving this through innovation, responsibility, and attracting outstanding people.

The strategy of the company has also been built around five primary priorities to enable it to

achieve its goals (PwC. 1). The five priorities include being technology enabled, delivering

exceptional value to the consumers, empowering its people, leading by example, and investing in

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sustainable growth (PwC. 1). The firm also targets attracting the right talent that will enhance

diversity at the workplace and develop an agile workforce.

1.2 Company Products

PwC is engaged in the provision of industry-focused services to both public and private

customers. It has an experienced staff and an established global network which enables it to

provide its clients with the support that they need. Such support is offered regardless of the

location and size of the client or organization (PwC. 1). Notably, the operations of the firm are

global, but 40% of its market is based in Europe. It has three service lines. The Assurance line

contributes to 43 percent of the 2016 revenues, Advisory contributes 32 percent, and Tax

contributes 25 percent. Consulting activities covered in Advisory include Performance

Improvement, Strategy, Transactions Services, Corporate Finance, Business Recovery Services,

Sustainability and Crisis Management, and Business Valuation n various specialist areas such as

actuarial and accountancy advisory (PwC. 1). Tax includes international tax planning as well as

compliance with the local tax customs, laws, human resource consulting, transfer pricing, and

legal services.

PwC has various broader advisory initiatives included in the Enterprise Risk

Management Framework (ERM) (PwC. 1). Examples include a global effort that aims at

assisting firms with outsourcing functions and a global political risk assessment that is offered by

Eurasia Group, a political risk advisory firm. Other advisory services that PwC offers include

two actuarial consultancy departments. These are Actuarial and Insurance Management

Solutions (AIMS) and another sub-branch of "Human Resource Services" (HRS) (PwC. 1).

Actuarial services are offered in four primary forms; life insurance, pensions, investments, and

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non-life insurance. Investment and life and non-life are handled by AIMS while HRS is tasked

with handling deals pertaining to pensions.

PwC also serves the Federal Government of the US through the Public Sector practice.

The firm has over 2000 professionals who are based in Washington Metro Corridor. On October

30 2013, PwC confirmed the acquisition of Booz & Company together with the name of the

company and all of its 300 partners. This deal was authorized through a vote by the Booz &

Company partners (Lisic, Ling Lei, et al. n.p.). PwC and Booz & Company combined on March

31, 2014 to form Strategy &. It includes strategists who assist firms in solving some of the

toughest challenges facing their businesses.

2.0 PwC Industry

2.1 Definition of the industry

PwC is recognized for its expertise in the services that it offers. Such experience and

expertise enables it to share its latest research findings and opinions on emerging and trends

business issues in the market. It also develops performance benchmarks that are tailored to suit

a particular industry and methodologies that are based on global best practices (PwC. 1).

Additionally, PwC is committed to finding solutions to solve technical and accounting issues

that could be unique to a specific industry. As such, PwC is lauded for its expertise,

professionalism, and experience in the delivery of various services that solve identified issues in

the market.

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2.2 Competitors

There are four primary competitors that PwC seeks to establish a competitive edge over

in the market. They include Deloitte LLP, Ernst & Young LLP (EY), Grant Thornton LLP, and

KPMG LLP.

2.2.1 Deloitte LLP

The company boasts of over 70,000 employees and 100 offices in the US. These

employees are involved in serving the market with four primary services. These include tax,

consultancy, advisory, and audit. As noted, PwC offers similar services, making Deloitte LLP

one of its primary competitors for customers in the US market (Deloitte 1). Additionally,

Deloitte LLP employs individuals who are tasked with the provision of services in around 20

sectors in the industry. Such services that are offered by these client service professionals include

cyber security, data analytics, financing and accounting, technology strategy, strategy and

operations, tax, risk, as well as human capital.

Deloitte LLP was ranked the best accounting firm in the US depending on annual revenue

(Deloitte 1). It is also a member of Deloitte Touche Tohmatsu Limited; this is an international

network that has various member firms operating in over 150 countries and with over 220,000

employees. Each of the firms offers services and products that are consistent with its host county

regulations.

2.2.2 Ernst & Young LLP (EY)

It is one of the members of Big 4 accounting legend EY; this was an international firm

that was a member of the defunct Ernst & Young Global Limited group of firms (Ernst & Young

LLP (EY) 1). It operates in the US and is involved in the provision of various services such as

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advisory, assurance, tax, and transaction advisory services. Additionally, some of the industry

specializations of Ernst & Young LLP include consumer products, financial services, real, life

sciences, media and entertainment, mining and metals, technology, automotive,

telecommunications, oil and gas, power and utilities, cleantech, government and public sector,

provider care, retail and wholesale, as well as support of entrepreneurial businesses (Ernst &

Young LLP (EY) 1). This shows that the firm offers a number of services that are also common

to PwC. In 2016, the company was ranked the third best accounting firm in the U.S. Stats of its

last fiscal year showed that it had booked revenues amounting to $11.2 billion.

2.2.3 Grant Thornton LLP

It is a member of the Grant Thornton International Ltd in the US. The organization is

involved in independent tax, audit, tax, and advisory services (Grant Thornton LLP 1). The

company serves a high number of private and public companies, government agencies, and other

financial institutions in the market. Other beneficiaries of the services of Grant Thornton LLP

include civic and religious organizations. Recently, Grant Thornton LLP booked revenues worth

over $1.4 billion (Grant Thornton LLP 1). Notably, such services are offered by its more than

7000 employees attached to 59 offices and employed by the over 550 partners.

2.2.4 KPMG LLP

The firm has over 100 offices in the US, and over 29,000 employees. This has made it

one of the Big 4. It is also an independent firm that is a member of a Swiss entity branded

KPMG International Cooperative (KPMG 1). The entity has member in more than 155 countries

in the world, with over 174000 employees and 9000 partners. The service lines of KPMG

include audit, tax, and advisory, with each based on industry-specific focus.

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KPMG serves its client in the US consumer base in 16 different sectors. These include

banking and finance; insurance; investment management; alternative investments; retail;

diversified industrials; (KPMG 1) building, construction and real estate; energy, natural

resources and chemicals; healthcare and pharmaceutical; government and public sector;

technology; media and telecommunications; food, drink and consumer goods; high growth mid-

market; private equity; high growth emerging markets; and Japanese Practice.

3.0 Project Management Internship

3.1 Position and Description of duties

I served as an intern at PwC. I worked under a manager and his team. I was involved in

data collection during company valuations. As such, my primary line of duty was business

valuation. Business valuation refers to the process of using a set of procedures in estimating the

economic value of the owner’s interest in a business or organization. Financial market

participants use business valuation when determining the price that they are willing to pay or

receive so as to affect the sale of an organization.

The same tools that are used for business evaluation are also used in resolving disputes

that arise from estate and gift taxation, divorce litigation, allocate business purchase price among

business assets, establish a formula for estimating the value of partners' ownership interest for

buy-sell agreements, and many other business and legal purposes such as in shareholders

deadlock, divorce litigation and estate contest.

3.2 Themes: managed services projects and business development

I was involved in the valuation of three companies. They included an IC company, Ve

Wong, and ThinTech Materials Technology Co., Ltd. However, the data collected for the IC

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Company was too sensitive to be disclosed to an intern. As such, this research presents the

business valuation of Ve Wong and ThinTech Materials Technology Co., Ltd.

3.2.1 ThinTech Materials Technology Co., Ltd

Thintech Materials Technology Company, Ltd. It is involved in developing,

manufacturing, and selling electrometallurgical products. The data collected for ThinTech

Materials Technology Co., Ltd was valuated using Bloomberg (ThinTech Materials Technology

Co., Ltd 1).

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This data shows that the capital of the business is at risk. It was established that it is

generating revenue that is lower than the projected revenue that it should generate. As such,

ThinTech Materials Technology Co., Ltd needs to identify new production and marketing

strategies that would enable the business to increase its capital generation.

3.2.2 Ve Wong Corporation

Ve Wong is a food corporation that is involved in the manufacture, market, and sale of

food products. Some of the products that the company produces include soy sauce, instant

noodles, Monosodium Glutamate, soft drinks, and canned foods. It is one of the three companies

in which I was involved in valuation during my internship at PwC (Ve Wong 1). I was actively

in involved in the collection and analysis of data concerning the company under valuation. In

doing this, I was guided by the manager and his team. The team had a total of four people. As

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such, a market multiple valuation of Ve Wong Corp. was conducted. Some of the data that was

collected and compiled about the firm is presented below.

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The data collected was expressed in terms of NTM EV/EBITDA ratios. In business

valuation, this method enables buyers in assessing the reasonability of the valuation of a target. It

is a financial metric in which NTM is an abbreviation for ‘next twelve months’, EV refers to

enterprise value, and EBITDA is an acronym for ‘earnings before income taxes, depreciation,

and amortization’ (Nahum 26). This ration is very crucial in market valuation. According to the

data collected and presented in the above charts, it was established that the EV/EBITDA NTM

ratio was significantly lower than that of the median of its peer group; approximately 10.00.

These metrics show that the valuation of the company lags the market valuation of the

company’s peer group (Ve Wong 1). This ratio was used to make the conclusion that the capital

of the company was at risk. This was also supported by the fact that the average of the food

sector of the company was higher than the EV/EBITDA NTM ratio; significantly higher by 9.63

(Ve Wong 1). This meant that the company valuation of Ve Wong was significantly lower than

the marketing valuation of the sector in which it operates.

The following data was also collected and analysis conducted using the Bloomberg guide.

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As the results show, the company was advised to identify new strategies that enhance the

capital and company valuation of the firm. As shown by the data, the fact that the EV/EBITDA

NTM ratio is so low exposes the food corporation to capital risk.

4.0 Conclusion

My internship at PwC was successful. I gained crucial skills in the field of finance.

Additionally, my involvement in valuation enabled me to understand the tools and set of

procedures that are required to establish the worth and value of a business. This is important as it

could be applied when selling or buying a business in the future. I also gained the ability of

searching accurate data in a short time. I was actively involved in data collection so as to come

up with the data presented in this report. Secondly, I also enhanced my skills in negotiating with

the people who are more experienced than you is a critical point. During my internship, I would

often have to seek guidance from the manager or the team. I also learnt how to use Bloomberg in

business valuation and value analysis.

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2016. Web. 8 Dec. 2016.

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Ltd. Home. N.p., 2016. Web. 8 Dec. 2016.

Kerry, Senator J. Bcci Affair: A Report to the Committee on Foreign Relations. Place of

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Scott, LouAnn. "PricewaterhouseCoopers Public Sector." (2014).

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reporting: the role of integrated reporting for communicating corporate sustainability

management." Journal of Cleaner Production (2016).

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E-ttmc.com.tw. N.p., 2016. Web. 8 Dec. 2016.

Van Mourik, Carien, and Peter Walton. The Routledge Companion to Accounting, Reporting and

Regulation. Routledge, 2013.

Ve Wong,. "味王股份有限公司". Asian-food-supplier.com. N.p., 2016. Web. 8 Dec. 2016.

Venkat, Shyam, and Stephen Baird. "Liquidity risk management: a practitioner's

perspective." Wiley finance series (2016).

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