Practical Business Valuations

Introduction:

Understanding the value of any business is fundamental, especially if we are involved in valuing, buying or selling businesses. However, understanding the sources of value of any business will also make us better practitioners, whatever the field of practice, as this means that our decisions and daily actions will be directly and indirectly aimed at ultimately creating value in the business.

The objective of this unit is to provide all the knowledge and practical tools in order to understand how value is created in firms. This unit will teach participants how to apply the tools in valuing businesses and what factors to take into account when valuing businesses. This unit will also teach participants how to apply the valuation techniques in the context of firms with special circumstances.

Learning Outcomes:

After completing this unit a participant should be able to:

·         Understand the sources of value
·         Identify and understand the various types of value drivers for any type of business
·         Explain, understand and apply the various valuation techniques typically used by practitioners
·         Apply valuation principles in the context of special businesses, such as SMEs, private firms, young firms, start-ups, loss-making firms
·         Understanding sources of uncertainty and how these affect valuations
·         Compute valuations and able to critically assess valuations produced by other practitioners
·         Understand and Evaluate assumptions used in computing valuations

Unit Content:

1.     An introduction to Valuation

·         Definition of valuation
·         Understanding Perceptions in valuation
·         Understanding that there is no true value
·         Understanding bias in valuation
·         Simplifying valuation
·         Understanding uncertainty in Valuation

2.     The valuation process

·         Economic Value.
·         How Financial Markets interpret value
·         Understanding financial statements
·         Measuring Earnings
·         How earnings translate into cash flows
·         How to estimate growth and how it will impact valuations
·         Understanding future value

3.   Tools used in Valuation

·         Discounted Cash Flow Analysis
·         Using Relative Valuation
·         Book Value Valuation
·         Earnings Multiples
·         Modelling Value
·         Incorporating Risk and Uncertainty in Valuation

4.     Practicing applying valuation methods

5.     Valuation in special situations

·         Valuing Start-Ups
·         Valuing Private firms
·         Valuing Young firms
·         Valuing Loss-making/negative earnings firms
·         Valuing firms in special sectors
·         Valuing firms in regulated sectors

Assessment Method:

This unit will be assessed through one home assignment including an in-class presentation (75%)  and a final Time-Constrained Assignment  of 1.5 hrs in duration (25%)
Candidates need to pass all components in  order to obtain unit certification.

Entry Requirements:

Prospective students are expected to have a good level of English, some basic numerical background, and some experience working in any business. Ideally, candidates should also be regular readers of a business/financial newspaper/magazine

Course Features

  • Assessments