@dcf; @valuation

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  2. Valuing a small tech firm

    Investment Banking

    I'm hurriedly on a valuation piece for a small tech / app entity (bolt on to human capital... pretty unique) using dcf and comparables and I'm pretty lost on what to do. I have a huge discrepancy in valuation: 10MM GBP (comparables/transactional ...

    16 comments29 Mar 2019 -

  3. Opinions on Best Valuation Book

    Investment Banking

    Hey all, I have decided to take start learning about valuation and the like, and want to know every ones favorite book on it. The main ones I am looking at are: Rosenbaum and Pearl Damodaran McKinsey Thanks! @dcf; @valuation ...

    58 comments9 Sep 2017 -

  4. Free Cash Flow & Enterprise Value question.

    Investment Banking

    Hey all, I am writing today seeking help to clear some confusion I have about valuation. It appears that I know the formulas, but I am interpreting the numbers incorrectly, or in fact I cannot explain what is going on or why things are as they are. I woul ...

    25 comments27 May 2017 -

  5. What is the best way to learn valuation?

    Investment Banking

    Hi guys, i'm preparing myself for the upcoming interviews (ibd) and my major is engineering, so i'll have to learn by myself valuation and accounting mostly, what do you guys recommend me to do? damodaran? biws? Wallstreet prep? have also heard ...

    34 comments17 Oct 2015 -

  6. DCF Help: Negative Implied Perpetual FCF Growth Rate

    Investment Banking

    Hello! Really hoping for advice here. I can't figure out for the life of me why I'm getting a negative implied perpetual FCF growth rate. I'm a new user so I can't link the spreadsheet or send screenshots but any guidance would be grea ...

    11 comments30 Jun 2019 -

  7. Small Boutique IB or BB Wealth Management

    Investment Banking

    Hi Guys, So I'm caught in a bit of a dilemma. I am coming from a non-target school, graduating in a couple of weeks with Finance degree, 1st gen college student. Didn't do BB summer internship, but I went overseas and worked at a 2B+ hedgefund a ...

    19 comments13 May 2017 -

  8. Flexibility of Valuation Methods in ER?

    Equity Research

    I skimmed an ER report from Bank of America today on Beyond Meat (BYND) and I saw that, whatever the assumptions regarding revenue, etc., in order to get a price target marginally above the (then) current market price, the analyst used a terminal growth o ...

    8 comments15 Aug 2019 -

  9. How do I properly explain how I worked on this DCF? I was told I did it wrong.

    Investment Banking

    So I interned at a small regional boutique this summer and I am now recruiting from a target school for IB as a rising junior. I have a bullet point on my resume about helping the junior deal team help build a DCF and this analyst I was speaking with at a ...

    13 comments23 Aug 2017 -

  10. What's Wrong With My Valuation?

    Off Topic

    So I did a Facebook DCF, and getting a very high stock price of $174.52. Can someone maybe comment if this is correct? Seems a little high for me, so I am not sure what I am supposed to fix to make it lower and more reasonable. Edit (1): I fixed it again, ...

    15 comments14 Jun 2016 -

  11. Do you purchase the firm at equity value or asset value?

    Investment Banking

    Hey all, (values in millions) Did a valuation for a tech company and I came to an enterprise value of $1,231 (in millions) of unlevered cash flows. I added back cash in year 0, thus giving me asset value in year 0 of 1,311.I subtracted debt today which is ...

    12 comments25 May 2017 -

  12. Free Cash Flow Valuation

    Investment Banking

    Hi, I am using DCF /freecashflow to value two projects/firms. Both firms have no reinvestment needs and all cashflows are equal except that the first one pays out as dividends all the cash it earns. The second firm retains all the earnings in the banks an ...

    11 comments23 Feb 2017 -

  13. (Negative) Working Capital vs EV Adjustments

    Investment Banking

    Hi everyone, I am computing the WC amount needed to adjust the EV. | Net Working Capital, per last balance sheet available:-665k | Average NWC, last 12 months:-797k...this returns NWC surplus of 132k. Can anyone possibly explain why both are negative and ...

    7 comments17 May 2019 -

  14. 3 statement model & valuation- cash flows & valuation increase when revenue growth decreases??

    Investment Banking

    Doing a 3 statement model with DCF attached. When revenue growth is 0, or even-40 or-70% as opposed to 5% or 20% etc- cash flows actually increase? when the business has high revenue growth the cash flows actually go negative! I presume this is due to how ...

    7 comments9 Jan 2019 -

  15. RE Valuation Analyst / Appraiser Exit Opportunities

    Real Estate

    Hello WSO, I'm considering going the route of valuation analyst/certified general appraiser and was wondering what the exit opportunities there are? Or is this career pigeonholed quickly? Also, what's the typical career path of this route? Thank ...

    8 comments13 Apr 2018 -

  16. How IB firms value a startup for IPO?

    Investment Banking

    What technics/approaches/methods are used in IB houses to do due dilligence valuation? other than DCF and multiples? do you do all of these then average the results? @dcf; @valuation No Yes 180080 286877 290110 444161 230018 ...

    5 comments26 Jun 2019 -

  17. Achieve 1-year target price by DCF?

    Equity Research

    For dcf valuation, it's my understanding that I will reach a fair value of the stock If I want to achieve a 1-year target price, do i need to discount the future cash flow to one year from now or do I just multiple the fair value by a growth rate? Th ...

    6 comments21 Jul 2017 -

  18. What multiples would I use for the Managed Care industry?

    Investment Banking

    Question in title, companies liked Aetna, Cigna, etc. What multiples should be used? P/E, P/B, PEG, not EV / EBITDA, are ones that I know, are there any industry specific multiples I should use? multiples @dcf; @valuation Salary ...

    6 comments23 Jan 2016 -

  19. DCF Question- Please Help!

    Investment Banking

    Would appreciate any help on this! I am making a DCF for a Company and I am running into an issue with the value. The company has very high historical CapEx, for example 2017 EBITDA was $5.8bn and CapEx was $5.6bn, as a result of this the free-cash flow i ...

    5 comments12 Feb 2018 -

  20. Help! I need somebody! Not just anybody!- balance sheet trouble

    Investment Banking

    I've been trying to figure out why my balance sheet doesn't balance for the last 4 hours. All years are off by the same exact number. Can someone please help?! PM and I'll email the model- I can't figure out how to post the xsl. to the ...

    4 comments18 May 2019 -

  21. Use forward looking multiple for terminal multiple in a dcf?

    Investment Banking

    Hi All. So I know that in a DCF you use comps multiple average as the terminal multiple for your modelling target. I'm just wondering if we should use forward-looking multiples or current multiples? If we use forward-looking, should we use the one af ...

    5 comments22 Aug 2016 -

  22. valuation multiple and tax shield

    Corporate Finance, Development and Strategy

    Hello, I'm wondering if we should consider the multiple => NI to common without tax shield / Equity value, => instead of NI to Common including tax shield / Equity Value (which is more traditional = easily comparable to market data) My reasonin ...

    4 comments22 Jun 2017 -

  23. Accounts receivables impact on FCFF/FCFE

    Corporate Finance, Development and Strategy

    Accounts receivables increase by $100 (tax 40%) How will it impact on FCFF/FCFE? Will it decrease by 100? Or by 40? My thought: in case of increasing AR we recognize revenue in IS, So revenue is up by 100, Net income is up by 60 In CFS we substract AR, so ...

    4 comments1 Feb 2017 -

  24. Valuation waterfall/bridge help

    Investment Banking

    I need to create a bridge/waterfall between two valuations (old estimates vs. new estimate) to explain what changed in the new forecast. In other words, I have valuated a company using one forecast that resulted in, lets say, 1bn and a second valuation of ...

    4 comments30 Jan 2016 -

  25. Help me value a weird investment

    Investment Banking

    So I'm trying to value a weird, very niche investment. Can't go into details, sorry, but I hope my question below is self-explanatory. Imagine a 20-year investment which gives a company guaranteed, risk-free returns but only if the company has t ...

    3 comments11 Aug 2017 -

  26. Company Comparables Assumptions

    Corporate Finance, Development and Strategy

    I am trying to do a company comparable analysis for a pre-packaged software company with a market cap of 3 mln usd. It's operations are worldwide (Europe, Latin America, US). I am trying to find comparable companies for it. My questions are: Is it ok ...

    3 comments13 Jun 2016 -

  27. Valuing a Hybrid Revenue Business

    Investment Banking

    Would really appreciate some help on this as I am struggling with a special project I got staffed on... How would one go around valuing a business that has a portion of its revenue stream from subscriptions to a product (bring in a monthly constant revenu ...

    2 comments26 Dec 2018 -

  28. Valuation Question: best mkt return to calculate MRP

    Investment Banking

    Monkeys, I'm doing a practice DCF on my own and need to calculate the required return on equity. Checked out the journal and US 10 Years are hovering around 2.9%. What's a good market return rate to use (I'm valuing a specialty/discount ret ...

    2 comments17 Jun 2018 -

  29. Is this internship in vessel valuation worth it?

    Investment Banking

    A family friend has offered me an unpaid internship in vessel valuation. I will be relying a lot on using dcf modelling to value ships, fleets and companies. I will also be researching how other deals in the market affect valuations. Alongside this I will ...

    2 comments6 Feb 2017 -

  30. Banking to hedge fund: interview questions

    Investment Banking

    Anyone know what kind of questions are asked at interviews. Specifically looking to know what accounting questions are most examined. Of course, realize that you need to have well thought out pitches and that you might have to do a case study etc. Not tal ...

    2 comments29 Jan 2018 -

  31. Mid-year convention adjustments for final year discount number for multiples method vs. gordon growth?

    Investment Banking

    I don't understand exactly why one would add 0.5 to the final year discount number for the multiples method, but would leave the gordon growth method's final year discount number as is.. gordon growth method @dcf; @valuation Salary ...

    2 comments29 Oct 2015 -

  32. Confused on these two technical questions: 1) DCF projection period for commodity company 2) Debt used to calculate EV

    Investment Banking

    1) Would you use a ten year or a 20 year projection period for a DCF for a commodity company? *I was thinking since commodity companies can be cyclical industries, a longer forecast period could make sense... but I've never heard of a 20 year DCF bef ...

    1 comment16 Nov 2019 -

  33. In your opinion, what are the marginal impacts of the ECB's policy on valuations of banks and insurance companies in Europe?

    Corporate Finance, Development and Strategy

    What come first in your mind after reading this question? What influence has the ECB policy on the valuation process? (focus on the banking and insurance company sector) What I need to research to find any impact? I will be very grateful if you can help m ...

    1 comment13 Nov 2019 -

  34. Pimp my ride for dissertation defence on private firm valuation

    Investment Banking

    Hey monkeys. Did a DCF /RV valuation of a middle-market mixed retailer for my M.Sc. dissertation, and played it by the book (think the usual cap. op. leases, bottom-up beta, comps and so on). Have to defend it for 45 min. in two days, and looking for inte ...

    1 comment19 Aug 2019 -

  35. Please help- balance sheet trouble

    Investment Banking

    I've been trying to figure out why my balance sheet doesn't balance for the last 4 hours. All years are off by the same exact number. Can someone please help?! PM and I'll email the model- I can't figure out how to post the xsl. to the ...

    1 comment18 May 2019 -

  36. Liquidity discount on an emerging market company

    Investment Banking

    Hey guys, I'm currently doing a valuation of a company trading in an emerging market country, and the market is really underdeveloped and illiquid. My question is, due to this being a systematic risk for the entire country, is it inherently included ...

    1 comment4 Apr 2019 -

  37. How to adjust valuation for a specific time point?

    Investment Banking

    Hi guys, a short question. How would you adjust DCF if I want to arrive at a valuation as of end June 2019? Assuming that roughly half of this year's FCF will already be realized at that date, should I only consider half of the 2019 FCF in my valuati ...

    1 comment21 Mar 2019 -

  38. New Question- Minority Interest and Enterprise value

    Investment Banking

    I understand that for EV / EBITDA to make sense, EV should include the minority interest of company B because EBITDA includes it because of the consolidated statments. But what if we are not using EV in a multiple and we just want to know its value, would ...

    1 comment12 Mar 2019 -

  39. Valuation of a loan with margin call features

    Investment Banking

    Hello everyone, I am currently trying to assign value to loans that are somewhat "avant-garde." They are secured loans with the underlying collateral being a stock, or other assets that have capital gains. Eventually, the loans will be securitiz ...

    1 comment24 Oct 2018 -

  40. How to value an exchange company (forex exchange, crypto exchange)?

    Investment Banking

    Hi guys, I am trying to value exchange companies like IG, CMC Merket for forex or Coinbase, Binance for crypto. In particular, I am interested on the revenue projection methodologies if anyone has knowledge on it? Thanks in advance @dcf; @valuation ...

    1 comment16 Oct 2018 -

  41. Please, help me with my survey dedicated to valuation!

    Investment Banking

    I am responsible for collecting data that is going to be used for the research held by The Kazakh-German University in Almaty. If you know anything about DCF, then your participation will be extremely useful! This research questionnaire has 10 questions. ...

    1 comment13 Oct 2018 -

  42. Merger and Acquisitions

    Investment Banking

    X to invest USD 2M for a 30% stake (new shares would be issued instead of acquiring existing shares) The funds raised would be used to acquire adjacent land to build a building extension After 2 years, a 21% stake would be sold to X (bringing our ownershi ...

    1 comment11 Oct 2018 -

  43. Perpetuity vs. Ebtida Multiple Discrepancies

    Private Equity

    ................................................................................................................................................ @dcf; @valuation ...

    1 comment2 Jul 2018 -

  44. DCF Modeling Question noob

    Investment Banking

    Hi I'm trying to learn to model by creating my own based off a template and understanding the ins and outs. I'm currently looking at a company that has 3 quarters released. Do I project the last quarter and sum up all quarters to get the whole y ...

    1 comment27 Jun 2018 -

  45. Valuation- Omitting certain metrics on purpose?

    Investment Banking

    Hi, This has been happening many times so I thought I would mention here. We get the interns to pull out some basic metrics on comps to do a subsequent analysis on. I don't know how this has not been filtered but now and then I find outrageous outlie ...

    1 comment24 Mar 2018 -

  46. (TGT) Target Corporation 10-K Analysis: Accounts Receivable

    Equity Research

    Hey Everyone! I'm an undergraduate Finance major. I've been practicing my valuation skills with real companies to understand better how it's really applied to the market. I'm proud to say that I improved a lot. However, there're s ...

    1 comment2 Feb 2018 -

  47. Should cash flows form future Capex. be included in Future cash flows, while valuing a private company for merger

    Investment Banking

    Hi, I am doing a DCF valuation of private company for a investor, who wants to fund a target requiring funds for future Capital investments. My query is whether I should value the company based on future cash flows of existing assets or should i include t ...

    1 comment6 Aug 2017 -

  48. Question about multiples and multiple expansion

    Job Search Advice

    This has been bothering me and I was wondering if someone could clarify. The two questions below might be related, or maybe I'm just mixing up the concepts in my head. Thanks in advance. Let's say I'm modeling out financials for a company, ...

    18 Sep 2016 -

  49. Small business loan portfolio valuation

    Asset Management

    If a firm were to use capital to provide loans to small businesses, how would you create a model for portfolio valuation? What are some things that would need to be included in addition to cash flow valuation? If you know any resources or have sample exce ...

    4 Mar 2016 -

  50. DCF Question- 2 ways to value a company

    Investment Banking

    Let's say I have a company with 30m cash. The company is unlevered. Therefore fcff=fcfe and wacc=cost of eq. 2 ways to value the company: 1) discount fcff--> EV 2) discount fcfe--> equity value They come out same. But they shouldn't since ...

    1 comment8 Apr 2016 -

  51. Technical question for VCs

    Private Equity

    Hi Everyone, I am interviewing at a VC firm an India and had a case question regarding DCFs for a startup. While I understand that the DCF method is tricky and possibly not the best idea for valuing a startup, company law in India dictates that the method ...

    10 Nov 2015 -

  52. Free Cash Flow Projects- Operating Margin

    Investment Banking

    Hi WSO Community, I had a question regarding projecting the operating margin in a free cash flow calculation. According to Breaking into Wall Street, "you could make an argument for decreasing this percentage over time due to economies of scale...&qu ...

    1 comment8 Nov 2015 -