Valuation

Valuation multiples are the quickest way to value a company, and are useful in comparing similar companies (comparable company analysis). They attempt...

A company can be separated into its operating businesses or assets and its non-operating assets. Operating assets are typically the principal sources of...

Sum-of-the-parts ("SOTP") or "break-up" analysis provides a range of values for a company's equity by summing the value of its individual...

Comparable companies analysis involves the comparison of operating metrics and valuation multiples for public companies in a peer group (the comparable...

Precedent transactions analysis is based on the premise that the value of a company can be estimated by analyzing the prices paid by purchasers of similar...

The discounted cash flow (DCF) analysis represents the net present value (NPV) of projected cash flows available to all providers of capital, net of the...

Unlevered free cash flow ("UFCF") is the cash flow available to all providers of capital, including debt, equity, and hybrid capital. A business...

The rate used to discount future unlevered free cash flows (UFCFs) and the terminal value (TV) to their present values should reflect the blended after-tax...

The terminal value (TV) captures the value of a business beyond the projection period in a DCF analysis, and is the present value of all subsequent cash...

Calculating Enterprise Value The enterprise value (EV) of the business is calculated by discounting the unlevered free cash flows (UFCFs) projected over...

The adjusted present value ("APV") analysis is similar to the DCF analysis, except that the APV does not attempt to capture taxes and other financing...

A leveraged buyout (LBO) is an acquisition of a company or a segment of a company funded mostly with debt. A financial buyer (e.g. private equity fund)...