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
- Enterprise Value
- Enterprise Value Formula
- Equity Value
- Equity Value Formula
- Market Capitalization
- Market Capitalization Formula
- Internal Growth Rate Formula
- Intrinsic Value Formula
- Absolute Valuation Formula
- Assessed Value vs Market Value
- Required Rate of Return Formula
- Historical Cost vs Fair Value
- Large Cap vs Small Cap
- Free Float Market Capitalization
- Market Cap vs Enterprise Value
- Book Value Vs Market Value
- Value vs Growth Stocks
- Book Value Per share
- Fair value vs Market value
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
- Going Concern concept
- Dividend Discount Model (DDM)
- Gordon Growth Model
- Gordon Growth Model Formula
- Discounted Cash Flow Analysis (DCF)
- DCF Formula (Discounted Cash Flow)
- Free Cash Flow Formula (FCF)
- Free Cash Flow to Firm (FCFF)
- Free Cash Flow from EBITDA
- Free Cash Flow to Equity (FCFE)
- Terminal Value
- Terminal Value Formula
- Cost of Equity
- Cost of Equity Formula
- Cost of Debt
- Cost of Debt Formula
- Risk-Free Rate
- Risk Free Rate Formula
- Sustainable Growth Rate Formula
- Beta in Finance
- Beta Formula
- CAPM Beta
- Capital Asset Pricing Model (CAPM)
- Stock Beta
- Equity Beta
- Calculate Beta Coefficient
- Unlevered Beta
- Market Risk Premium
- Market Risk Premium Formula
- Equity Risk Premium
- Risk Premium formula
- Country Risk Premium
- Weighted Average Cost of Capital (WACC)
- Cost of Capital Formula
- WACC Formula
- Security Market Line (SML)
- Capital Market Line
- Systematic Risk
- Unsystematic Risk
- Systematic Risk vs Unsystematic risk
- Free Cash Flow (FCF)
- Free Cash Flow Yield (FCFY)
- Mistakes in DCF
- Treasury Stock Method
- CAPM Formula
- Cash Flow vs Free Cash Flow
- Business Risk vs Financial risk
- Business Risk
- Financial Risk
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.
19 RESOURCES
- Equity Value vs Enterprise Value
- Trading Multiples
- Comparable Company Analysis
- Transaction Multiples
- (Price Earning Ratio (P/E)
- PE Ratio formula
- PEG Ratio Formula
- Price to Cash Flow (P/CF)
- Price to Book Value Ratio (P/B)
- Price To Book Value formula
- Market to Book Ratio
- Price Earning Growth Ratio (PEG)
- Trailing PE vs Forward PE
- Forward PE
- EV to EBITDA Multiple
- EV to EBIT Ratio
- EV to Sales Ratio
- EV to Assets
- Cape Ratio
- Factor Models
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
