Just got assigned for an leasing company acquisition (strategic... not LBO) deal and need to start valuing a leasing company (mostly auto and equipment... has both finance and operating lease)... I've been reading some old posts and websites but most are about leasing equipments (as expense/liability). If anyone can explain the following or refer to a good source of reference, that would be really helpful.
Is DDM the best way to value the company? I was told DCF is not a good idea because it is very difficult to project FCF with a company that does both finance and operating, and that from a balance sheet perspective, it is similar to a bank (minus having deposits). If DCF should be used, then is it better to use perpetual growth model for terminal value?
I understand how finance and operating leases are accounting when a company is leasing the equipment (lessee) but how does the accounting work from the lessor's perspective? If the ownership is transferred to finance, then that means there are no "leasing assets" (similar to no liability for leasing as an operating lease)?
Any other pointers or links regarding valuation for a leasing company would be very helpful. Thanks in advance!
How did you end up valuing the lease company?
How to value a leasing company? (Originally Posted: 10/23/2016)
Not really sure what model/multiple I should use to value a leasing company，any insight is appreciated :)
p/b; p/e
What is the reason to use p/b? Is the reason why dcf is not appropriate for a leasing company the same reason for a bank?
Nostrum quod pariatur tempora nostrum. Et iusto velit sint minus ut. Ipsa quaerat eos minus aliquid asperiores. Beatae totam fugiat accusantium sapiente.
Quasi incidunt beatae qui ducimus recusandae cupiditate et. Incidunt autem quo sed minus. Occaecati a laudantium nihil quas. Et nam et harum numquam quisquam et.
Atque quo esse dolorem neque quo odit nulla. Vel veritatis ad aut eos aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...