6 Free Financial Modeling Lessons...and More.

Enter your e-mail below to get our new Free Modeling Tutorials ($200+ Value).

< previous | next >

How would you value a company if you can't use DCF or Multiples?
 

Wall Street Mentors's picture
EN
(Gorilla, 623
 
Points)
 on 5/24/12 at 12:44pm

Wall Street Mentor Joe walks through how to answer the question how would you value a company if you can't use DCF or Multiples?

Click here to connect with Wall Street pros like Joe for mock interviews.

Click here to See more videos like this one.

[email protected] Wall Street Mentors Mock Finance Interviews
Stringer Bell's picture

That was fantastic.

PE
(King Kong, 1,682
 
Points)
 on 11/3/11 at 3:05pm

That was fantastic.

esbanker's picture

Great video - thanks.

PE
(Gorilla, 577
 
Points)
 on 11/19/11 at 5:40pm

Great video - thanks.

Capitalist

rickyross's picture

Never thought about valuation

IB
(Gorilla, 551
 
Points)
 on 11/20/11 at 1:30am

Never thought about valuation as broken down into those three separate categories. Interesting.

People tend to think life is a race with other people. They don't realize that every moment they spend sprinting towards the finish line is a moment they lose permanently, and a moment closer to their death.

professionalmonkey's picture

damn that was good...I hope

PE
 
Points)
 on 12/5/11 at 4:34pm

damn that was good...I hope everyone watches this video

timothy0's picture

Amazing. Great video. Very

O
 
Points)
 on 12/5/11 at 7:12pm

Amazing. Great video. Very informative

Il Cavaliere's picture

There is no problem. The guy

IB
 
Points)
 on 12/5/11 at 9:12pm

There is no problem. The guy forgets that you can measure assets, by adding the sum of all assets, which is arguably hard OR by adding equity plus debt.So you take the market cap and add the value of its debt. Market Cap = share price times nr of shares and add stock options by using black scholes or a simpler method, such as the equity method. Also factor in convertibles and all that shit. The you add the value of the debt. A good proxy would be the book value of debt.
Done.

taylorwcn's picture

There's also something called

O
(Chimp, 1
 
Points)
 on 12/5/11 at 11:53pm

There's also something called the Clean Surplus Model, which is essentially a book value based approach + future growth options. It's an accounting-heavy approach, but together with the value of the growth option, you should yield a valuation that's fairly similar to the value of the firm using DCF.

LeYoun's picture

yeah alright its a good video

(Chimp, 9
 
Points)
 on 12/6/11 at 7:03am

yeah alright its a good video but its the only good one trust me. Once you subscribe to this overpriced service, you mostly get videos of interviews of some kids in china who cant speak english and who naively paid the ridiculous price they charge for individual mock interviews.
This service is SHIIIIIIIITT ! I subscribed and regretted. Now since its offered by WSO I expect my comment to be removed quickly by one of the admins of this site. But Im just trying to give an objective view on something this site certainly didnt do well.

DON'T BUY

MistaBooks's picture

good video

(Orangutan, 294
 
Points)
 on 12/6/11 at 8:01am

good video

Wasserstag526's picture

Net Asset Value method and

CF
 
Points)
 on 12/6/11 at 8:23am

Net Asset Value method and Cost Approach are the methods which he is referring to.

'We're bigger than U.S. Steel"

Romeo00's picture

Your videos are awesome

 
Points)
 on 1/31/12 at 3:43pm

Your videos are awesome

socola2003's picture

Asset value is a common

IB
(Orangutan, 335
 
Points)
 on 1/31/12 at 4:26pm

Asset value is a common valuation methodolgy used in restructuring, specifically regarding orderly liquidation and preference analysis for impairment of creditors.

pokerdizzle's picture

imo this is an extremely

IB
 
Points)
 on 1/31/12 at 8:07pm

imo this is an extremely convoluted explanation (in general) for the valuation methodologies, and specifically determining the "market value of B/S assets (the basic concept is that anything you spend capex on which ends up sitting on the balance sheet has some "worth / value" because these "assets" will generate you future revenues)"

keep in mind the majority of ur target audience members are jrs in college, many of which have some or just a bit of finance experience. the terminology and phrasing used is simply too complex and not organized enough.

In reply to pokerdizzle
Wasserstag526's picture

pokerdizzle wrote: imo this

CF
 
Points)
 on 2/1/12 at 9:56am
pokerdizzle:

imo this is an extremely convoluted explanation (in general) for the valuation methodologies, and specifically determining the "market value of B/S assets (the basic concept is that anything you spend capex on which ends up sitting on the balance sheet has some "worth / value" because these "assets" will generate you future revenues)"

keep in mind the majority of ur target audience members are jrs in college, many of which have some or just a bit of finance experience. the terminology and phrasing used is simply too complex and not organized enough.

Prob sufficient enough to get you through an SA or 1st year analyst interview.

'We're bigger than U.S. Steel"

pokerdizzle's picture

yes -- sufficient enough

IB
 
Points)
 on 2/1/12 at 10:55am

yes -- sufficient enough assuming you can process / understand what he says. a lot of folks just regurgitate without learning the fundamental concepts (which when explained properly are quite simple) --> this is a dangerous approach, but CAN work w/ time [typically you go through 5-6 rounds of rejections then your regurgitation is at a level where you've heard 90% of the questions asked so your "intuition" is at a point where you can pass through (but you're constantly paranoid--cuz you don't REALLY understand the concepts)].

but if you try to memorize and regurgitate how Joe walks through the main valuation methodologies i would imagine (i) most candidates will not be able to process what he is talking about (ii) throwing around big words that you do not fully understand will encourage interviewers to ask you tougher probing questions. I think the keys to success in interviewing are (i) guiding the interviewer to ask you technical questions you are most comfortable with (ii) explaining these concepts w/ simple terms that show your understanding and minimize the chance of nasty follow-up questions (iii) presentation -- not appearing like a pompous know-it-all when explaining answers you already know

on the video:

for instance, the "income approach uses some form of [capitalization of income] or discounting of cash flows...[productive asset] -- ? why would you ever explain it this way? and why would you throw in the capitalization of income?

in addition, many folks will confuse his "asset" valuation methodology with the "sum of the parts analysis", since Joe uses these terms interchangably. very few people use this approach in investment banking [maybe restructuring groups], and a "traditional" sum of the parts is MUCH more common. and again -- by throwing these terms at your interviewer [this approach in particular may even confuse the interviewer] you put yourself at a relative disadvantage

just my two cents....not to knock this program -- i think its net net great that WSO is setting up video training guides, etc.

In reply to pokerdizzle
Wasserstag526's picture

pokerdizzle wrote: yes --

CF
 
Points)
 on 2/1/12 at 11:09am

'We're bigger than U.S. Steel"

In reply to LeYoun
LeYoun's picture

LeYoun wrote: yeah alright

(Chimp, 9
 
Points)
 on 3/26/12 at 3:04pm
J.Posner's picture

Well depending on how much

CO
(Chimp, 4
 
Points)
 on 5/24/12 at 5:16pm
prudentinvestor's picture

I was actually asked this

(Orangutan, 317
 
Points)
 on 5/24/12 at 10:20pm

6 Free Financial Modeling Lessons...Straight to Your Inbox.

Confirm your name and e-mail below to get our best tips

Monkey Stats
Account information
We respect your Name and E-mail privacy. By joining you accept our terms of service.