Valuation
Valuation Multiples
Valuation multiples are the quickest way to value a company, and are useful in comparing similar companies (comparable company analysis). They attempt...
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Valuation Methods
A company can be separated into its operating businesses or assets and its non-operating assets. Operating assets are typically the principal sources of...
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Sum-of-the-Parts Analysis
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...
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Comparable Companies Analysis
Comparable companies analysis involves the comparison of operating metrics and valuation multiples for public companies in a peer group (the comparable...
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Precedent Transactions Analysis
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...
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Discounted Cash Flow (DCF) Analysis
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...
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Unlevered Free Cash Flow
Unlevered free cash flow ("UFCF") is the cash flow available to all providers of capital, including debt, equity, and hybrid capital. A business...
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Weighted-Average Cost of Capital (WACC)
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...
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Terminal Value
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...
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Enterprise and Equity Values
Calculating Enterprise Value
The enterprise value (EV) of the business is calculated by discounting the unlevered free cash flows (UFCFs) projected over...
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Adjusted Present Value
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...
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Leveraged Buyout (LBO) Analysis
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)...
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