Introduction to Business Valuation

Course details

Valuation is probably the most fundamental concept in finance and is a necessary skill to become a world-class financial analyst. Valuation is the art and science of attributing value to an asset, investment or company. In this course, learn about the three most common valuation methodologies: comparable company valuation, precedent transaction valuation and discounted cash flow valuation.

Learning objectives
Identify a wide range of valuation methods.
Understand the difference between enterprise value and equity value.
Explore the three main business valuation techniques.
Determine the pros and cons of different valuation methods.
Discover how to present your analysis like a world-class financial analyst.
Calculate key outputs within the model structure.

Concepts

0. Introduction

01 - Business valuation course introduction
02 - Why perform a valuation
03 - Valuation - Art and science

1. Valuation Techniques

04 - Overview of valuation techniques
05 - Focus of this course

2. Presenting Valuation Results

06 - Creating a football field chart
07 - Checking in - Presenting valuation results

3. Enterprise Value vs. Equity Value

08 - Understanding enterprise value vs. equity value
09 - Valuing a house
10 - Calculating enterprise value
11 - Enterprise valuation methods
12 - Comparing enterprise vs. equity multiples
13 - Advantages and disadvantages of enterprise value

4. Numerator Denominator Consistency

14 - Check-in - Valuation consistency
15 - Ensuring numerator and denominator consistency

5. DCF Valuation

16 - Understanding types of free cash flows
17 - Ensuring numerator and denominator consistency
18 - Breaking down a DCF forecast
19 - Identifying key DCF assumptions
20 - Unlevered free cash flow calculations
21 - Introduction to the DCF model
22 - Overview of UFCF calculations
23 - Step-by-step UFCF walkthrough
24 - Mid-point check-in

6. Cost of Capital

25 - Spectrum of risk
26 - How to calculate WACC
27 - Capital asset pricing model (CAPM) basics
28 - Factors influencing cost of equity
29 - Understanding CAPM
30 - Beta and industry beta explained
31 - Using a WACC scatter plot
32 - Calculating WACC using slope functions
33 - Understanding industry beta
34 - What is weighted average cost of capital (WACC)

7. Terminal Value

35 - Terminal value calculation methods
36 - Walkthrough of terminal value calculations
37 - Calculating terminal value
38 - Calculating value per share
39 - Advantages and disadvantages of DCF

8. NPV and IRR in Excel

40 - Using the NPV function in Excel
41 - Applying the XNPV function
42 - Understanding internal rate of return (IRR)
43 - DCF using Excel functions
44 - Applying Excel functions to a DCF model, part 1
45 - Applying Excel functions to a DCF model, part 2
46 - Check-in - Excel calculations

9. Relative Valuation

47 - Introduction to relative valuation
48 - Selecting appropriate multiples
49 - Firm life cycle and valuation
50 - Advantages and disadvantages of relative valuation
51 - Differences in valuation multiples

10. Comparable Company Valuation

52 - How to select comparable companies (comps)
53 - Characteristics of good comps
54 - Examples of bad comps
55 - Using Capital IQ for comps
56 - Introduction to the comparable company valuation model
57 - Walkthrough of a comparable company valuation
58 - Check-in - Comparable company valuation

10. Precedent Transaction Analysis

59 - Process for analyzing transactions
60 - How to select comparable transactions
61 - Valuation using precedent transactions
62 - Building a football field chart

Conclusion

63 - Business valuation course summary