Valuation

Intrinsic valuation

We offer customized on-site training in the following areas: [For further details, please read more details here.]

Levered valuation: Discounted dividends model (DDM)

  • When is DDM appropriate and not appropriate
  • Drivers of dividends: ROE and growth in equity
  • Discount rates for dividends: Cost of equity. See detailed discussion of business risk and financial risk here.

Unlevered valuation: Discounted enterprise free cash flows model

  • When is DCF appropriate and not appropriate
  • Drivers of enterprise free cash flows: ROIC and growth in invested capital
  • Drivers of ROIC: See detailed discuss and growth
  • Discount rates for dividends: Cost of equity

Relative valuation

We offer customized on-site training in the following areas: [For further details, please read more details here.]

Picking the right peers

  • Industry characteristics
  • Geographic location
  • Size
  • Margins and growth rates

Levered multiples

  • Price-to-earnings ratio, Earnings yield, PEG ratio
  • Price-to-book ratio, Price-to-tangible-net-worth ratio
  • Dividend yield

Unlevered multiples

  • Enterprise value (EV) to Unlevered net income ratio, EV/EBITDA ratio, EV/EBIT ratio
  • Enterprise value to invested capital ratio, EV to tangible invested capital ratio
  • Enterprise free cash flow yield