Valuation Overview
Valuation of a company is the core functions of a Financial Analyst and you are expected to be the best in this job. It essentially means to find the fair (correct) value of the company's shares by applying appropriate tools like Discounted Cash Flows, Relative Valuation Analysis, Transaction Multiples and more. With this knowledge of fair value estimate of the stock, a Financial Analyst is in a superior position to recommend stocks for BUY/SELL to his clients.
Here, you will find top business valuation analysis resources that will help you learn professionally, from the basic level to the advanced level. We have divided this these resources into 5 parts - Basics, Discounted Cash Flow, Multiples Approach, Other business valuation tools, and Interview Prep.
Valuation Principles
WHAT YOU'LL LEARN
Here we discuss the basic terminologies related to business valuation analysis like what is equity value and enterprise value, how is market capitalization calculated, the difference between a Market cap and enterprise value, what is book value per share and more
20 RESOURCES
- Absolute Valuation Formula
- Assessed Value vs Market Value
- Book Value Per share
- Book Value Vs Market Value
- Enterprise Value
- Enterprise Value Formula
- Equity Value
- Equity Value Formula
- Fair value vs Market value
- Free Float Market Capitalization
- Historical Cost vs Fair Value
- Internal Growth Rate Formula
- Intrinsic Value Formula
- Large Cap vs Small Cap
- Market Cap vs Enterprise Value
- Market Capitalization
- Market Capitalization Formula
- Required Rate of Return Formula
- Value vs Growth Stocks
Discounted Cash Flow
WHAT YOU'LL LEARN
In this section, we discuss step by step approach to Discounted Cash Flow. First, we start with the going concern concept and learn the Dividend Discount Model. Thereafter, we extrapolate the learnings of DDM to DCF. Here we look at terms like FCFF, FCFE, WACC, Beta, Risk Premium, Terminal Value, Cost of Equity, CAPM and more.
50 RESOURCES
- Beta Formula
- Beta in Finance
- Business Risk
- Business Risk vs Financial risk
- Calculate Beta Coefficient
- Capital Asset Pricing Model (CAPM)
- Capital Market Line
- CAPM Beta
- CAPM Formula
- Cash Flow vs Free Cash Flow
- Cost of Capital Formula
- Cost of Debt
- Cost of Debt Formula
- Cost of Equity
- Cost of Equity Formula
- Country Risk Premium
- DCF Formula (Discounted Cash Flow)
- Discounted Cash Flow Analysis (DCF)
- Dividend Discount Model (DDM)
- Equity Beta
- Equity Risk Premium
- Financial Risk
- Free Cash Flow (FCF)
- Free Cash Flow Formula (FCF)
- Free Cash Flow from EBITDA
- Free Cash Flow to Equity (FCFE)
- Free Cash Flow to Firm (FCFF)
- Free Cash Flow Yield (FCFY)
- Going Concern concept
- Gordon Growth Model
- Gordon Growth Model Formula
- Market Risk Premium
- Market Risk Premium Formula
- Mistakes in DCF
- Risk Free Rate Formula
- Risk Premium formula
- Risk-Free Rate
- Security Market Line (SML)
- Stock Beta
- Sustainable Growth Rate Formula
- Systematic Risk
- Systematic Risk vs Unsystematic risk
- Terminal Value
- Terminal Value Formula
- Treasury Stock Method
- Unlevered Beta
- Unsystematic Risk
- WACC Formula
- Weighted Average Cost of Capital (WACC)
Valuation Multiples
WHAT YOU'LL LEARN
Valuation multiple approaches is the relative valuation wherein you find the value of the stock by comparing it with its peer group. Here you will learn the most commonly used multiples like PE Ratio, EV/EBITDA Ratio, PEG Ratio, EV to EBIT Ratio, Price to Book Value, Price to Cash Flows and more.
20 RESOURCES
- (Price Earning Ratio (P/E)
- Cape Ratio
- Comparable Company Analysis
- Equity Value vs Enterprise Value
- EV to Assets
- EV to EBIT Ratio
- EV to EBITDA Multiple
- EV to Sales Ratio
- Factor Models
- Forward PE
- Market to Book Ratio
- PE Ratio formula
- PEG Ratio Formula
- Price Earning Growth Ratio (PEG)
- Price To Book Value formula
- Price to Book Value Ratio (P/B)
- Price to Cash Flow (P/CF)
- Trading Multiples
- Trailing PE vs Forward PE
- Transaction Multiples
Other Valuation Tools
WHAT YOU'LL LEARN
These are nontraditional tools used to value a company. These include the Sum of Parts, Liquidation Value and Economic Value added.
Valuation Interview
WHAT YOU'LL LEARN
If you are going to appear for Valuation Interview, then do not miss this section. Here we provide with the top 25 most commonly asked business valuation interview questions. Also, we discuss the roles of a analyst and books that you can refer to master these concept
