Training the Street: Valuation Essentials –
Questions With Complete Solutions
Save
Terms in this set (84)
What is the company worth?
What are the 2 key
questions to valuation?
What can/will someone pay?
Trading Comps
Transaction Comps
Name 6 valuation
DCF
methodologies.
LBO Analysis
Merger Analysis (Accretion/Dilution)
What other questions who is the seller?
should you consider who are the potential buyers?
when asking "what will what is the context of the transaction?
someone pay?" what are the market conditions?
EqV = EV - Debt - Pref Stock - Noncontrolling
Interest + Cash
What is EqV?
"Market Value" = Prices * Diluted Shares Outstanding
EV = EqV + Debt + Pref Stock + Noncontrolling
What is EV?
Interest - Cash
- no share price
- published financials?
What are some issues
- key person discount
that arise in private
- liquidity
company valuation?
- risk profile
- must use industry beta (in DCF)
, A comparison with similar companies at a specific
What is the trading
point in time, based on public info that creates
comps method?
relative valuations based on key multiples
What is the formula Value / Value Driver = Value Relationship
framework for a multiple?
What is one thing you financial calculator
need to participate in
client meetings?
1) Enter basic company info
2) Calculate EqV
3) Calculate EV
Outline the detailed
4) Enter IS info
steps to trading comps.
5) Calculate LTM
6) Calculate Performance Measures
7) Calculate Multiples and Credit Stats
1) Determine the peer group
2) Gather appropriate info (company info, financials)
Outline the roadmap for 3) Calculate EqV and EV
trading comps 4) Calculate financial performance statistics
5) calculate the multiples
6) Analyze the results and derive a range
What do you use to Treasury Stock Method
measure outstanding
options?
- most recent
Why use LTM? - same basis for comparison
- controls for seasonality
What is the equation for Diluted SO = SO + Total Options - Shares
Diluted SO? Repurchased
Restricted Stock Units
What is an RSU?
- stock compensation from employer
What are the assumptions - typically includes short-term marketable securities
with "Cash & - able to reduce debt (dollar for dollar)
Equivalents"?
Questions With Complete Solutions
Save
Terms in this set (84)
What is the company worth?
What are the 2 key
questions to valuation?
What can/will someone pay?
Trading Comps
Transaction Comps
Name 6 valuation
DCF
methodologies.
LBO Analysis
Merger Analysis (Accretion/Dilution)
What other questions who is the seller?
should you consider who are the potential buyers?
when asking "what will what is the context of the transaction?
someone pay?" what are the market conditions?
EqV = EV - Debt - Pref Stock - Noncontrolling
Interest + Cash
What is EqV?
"Market Value" = Prices * Diluted Shares Outstanding
EV = EqV + Debt + Pref Stock + Noncontrolling
What is EV?
Interest - Cash
- no share price
- published financials?
What are some issues
- key person discount
that arise in private
- liquidity
company valuation?
- risk profile
- must use industry beta (in DCF)
, A comparison with similar companies at a specific
What is the trading
point in time, based on public info that creates
comps method?
relative valuations based on key multiples
What is the formula Value / Value Driver = Value Relationship
framework for a multiple?
What is one thing you financial calculator
need to participate in
client meetings?
1) Enter basic company info
2) Calculate EqV
3) Calculate EV
Outline the detailed
4) Enter IS info
steps to trading comps.
5) Calculate LTM
6) Calculate Performance Measures
7) Calculate Multiples and Credit Stats
1) Determine the peer group
2) Gather appropriate info (company info, financials)
Outline the roadmap for 3) Calculate EqV and EV
trading comps 4) Calculate financial performance statistics
5) calculate the multiples
6) Analyze the results and derive a range
What do you use to Treasury Stock Method
measure outstanding
options?
- most recent
Why use LTM? - same basis for comparison
- controls for seasonality
What is the equation for Diluted SO = SO + Total Options - Shares
Diluted SO? Repurchased
Restricted Stock Units
What is an RSU?
- stock compensation from employer
What are the assumptions - typically includes short-term marketable securities
with "Cash & - able to reduce debt (dollar for dollar)
Equivalents"?
