The aim of the day is to look at different valuation techniques and understand the important parameters that can cause theoretical valuation to break down if overlooked.
This is a condensed version of three equity valuation classes – we will take a brief overview of various techniques for equity valuation, focus on Discounted Cash Flow techniques and show that DCF and multiples actually do the same thing – but only if you make the same assumptions. Models will be based on real companies.
Accounting from a course such as Accounting in a Day in the Introduction to Financial Markets: Equities module, and familiarity with financial statements and financial statements analysis such as the course in this series.
Introduction to Valuation techniques
– Introduction to valuation techniques for equities
– Analysts language vs accounting language
– ‘Enterprise Value’. Another way to look at the balance sheet?
Multiples and Value Drivers – Factors to consider when multiples differ
– Value drivers in a business
– Relationship of growth to value in real and modelling world
– Equity vs Enterprise Multiples
DCF – Defining concept of ‘enterprise free cash flow’
– Discounting forecasted cash flows
– Terminal values-how to extend forecasts to infinity
– DCF mathematics made easy
– Adding value creation assumptions in the long run
WHO SHOULD TAKE THIS COURSE?
Appropriate for students who are primarily focused on single stock analysis, but does not exclude those doing credit analysis
These courses are included in this module