1. INFORMATION NEEDED FOR VALUATION
A.Industry and Competition
B.Operations
C.Marketing and Sales
D.Human Resources
E.Historical Financial Information
F. Financial Projections
G.Sectors/Company/FIRM(Project/Assignment)
2. Corporate Valuation in Practice
Relative Valuation
Transaction Multiples
DCF Valuation
Common Practice
. IPO Relative Valuation
. M&A : . DCF Valuation
. Transaction Multiples
. Hybrid Model
. M&A .. Financial Buyer
. DCF Valuation with primary focus on IRR
3. DISCOUNTED CASH FLOW APPROACH
The discounted cash flow approach to valuing a firm
involves the following steps:
1. Analysing historical performance
2. Estimating the cost capital
3. Forecasting performance
4. Determining the continuing value
5. Calculating the firm value and interpreting the results.
4. Analysing Historical Performance
Reorganising the financial statements to get a handle
over economic performance, instead of accounting
performance, in terms of net operating profit less
adjusted taxes (NOPLAT) and free cash flow (FCF).
Getting a perspective on the drivers of FCF.
Measuring and analysing the return on invested
capital (ROIC) to assess the ability of the company to
create value.
Decomposing revenue growth into various
components.
Assessing the company’s financial health and capital
structure.