@dcf; @valuation

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 comments - 3 silver bananas - Mar 29 2019 - 11:00am - BigHuddz08

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 comments - 0 silver bananas - Sep 9 2017 - 4:30am - DiamondsDancing

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 comments - 2 silver bananas - Jun 30 2019 - 12:32am - dunc21

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 comments - 0 silver bananas - May 27 2017 - 5:02pm - JoeySalads

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 comments - 0 silver bananas - Oct 17 2015 - 12:45am - keteeson

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 comments - 1 silver bananas - May 13 2017 - 2:10pm - nofunleague

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 comments - 3 silver bananas - Aug 15 2019 - 2:37pm - proteus_1

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 comments - 1 silver bananas - Aug 23 2017 - 2:02pm - gosteelers35

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 comments - 0 silver bananas - Jun 14 2016 - 7:05pm - Alibabes56

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 comments - 2 silver bananas - May 25 2017 - 5:35am - JoeySalads

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 comments - 2 silver bananas - May 17 2019 - 7:06am - BigHuddz08

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 comments - 1 silver bananas - Feb 23 2017 - 1:47pm - johnsmith123456

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 comments - 2 silver bananas - Jan 9 2019 - 8:52am - Lokjor

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 comments - 1 silver bananas - Apr 13 2018 - 5:47pm - MIDW3ST

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 comments - 2 silver bananas - Jun 26 2019 - 1:45am - leo1188

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 comments - 1 silver bananas - Jul 21 2017 - 9:54am - alpha1347

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 comments - 1 silver bananas - Feb 12 2018 - 12:54pm - KobeBean24

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 comments - 1 silver bananas - May 18 2019 - 12:12am - bobbysteelz

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 ...

6 comments - 0 silver bananas - Jan 23 2016 - 2:27pm - dbdrake

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 comments - 0 silver bananas - Aug 22 2016 - 1:01pm - VictarionGreyjoy

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 comments - 0 silver bananas - Jun 22 2017 - 4:45pm - badoc1

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 comments - 0 silver bananas - Feb 1 2017 - 6:02pm - Dronaldo

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 comments - 0 silver bananas - Jan 30 2016 - 4:47pm - ProspectiveCD

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 comments - 0 silver bananas - Aug 11 2017 - 6:44pm - Bateman Begins

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 comments - 0 silver bananas - Jun 13 2016 - 10:37pm - Alibabes56

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 comments - 1 silver bananas - Dec 26 2018 - 10:34pm - Monkeydevelopment

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 comments - 1 silver bananas - Jun 17 2018 - 9:42pm - JfffYes

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 comments - 0 silver bananas - Feb 6 2017 - 6:32pm - Thealchemist

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 comments - 1 silver bananas - Jan 29 2018 - 12:38pm - fortheppl

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 ...

2 comments - 0 silver bananas - Oct 29 2015 - 12:38am - bankertobe27

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 comment - 1 silver bananas - Aug 19 2019 - 8:05am - chopstickies

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 comment - 1 silver bananas - May 18 2019 - 12:12am - bobbysteelz

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 comment - 2 silver bananas - Apr 4 2019 - 4:48am - Reaper13x

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 comment - 1 silver bananas - Mar 21 2019 - 11:10am - Adam-Maryniok

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 comment - 1 silver bananas - Mar 12 2019 - 1:45am - Peter.

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 comment - 1 silver bananas - Oct 24 2018 - 12:01pm - atoll303

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 comment - 1 silver bananas - Oct 16 2018 - 5:09am - rvlsnjk

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 comment - 1 silver bananas - Oct 13 2018 - 12:22pm - seredadanil

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 comment - 1 silver bananas - Oct 11 2018 - 9:49pm - Trishaan-Gill

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

1 comment - 1 silver bananas - Jul 2 2018 - 4:03pm - James Johnson

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 comment - 1 silver bananas - Jun 27 2018 - 11:09am - imontheknicks

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 comment - 1 silver bananas - Mar 24 2018 - 8:26am - BigHuddz08

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 comment - 1 silver bananas - Feb 2 2018 - 5:47pm - Blowfish

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 comment - 0 silver bananas - Aug 6 2017 - 3:34pm - Nittiyn-Jaggi

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, ...

- 0 silver bananas - Sep 18 2016 - 11:05pm - xxyx

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 ...

- 0 silver bananas - Mar 4 2016 - 11:03am - kinop

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 comment - 0 silver bananas - Apr 8 2016 - 10:41pm - fa1313

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 ...

- 0 silver bananas - Nov 10 2015 - 2:15pm - Iris11

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 comment - 0 silver bananas - Nov 8 2015 - 2:01am - bankerbread22