This document provides an introduction to financial review and business valuation. It discusses several common approaches used to value businesses, including book value, discounted cash flows, market capitalization, and EBITDA. The mentorship aims to teach entrepreneurs how to assess factors that influence an investor's perception of business value and how to identify the appropriate valuation method based on a company's characteristics and the purpose of the valuation. While no single method fits all situations, using multiple valuation models is recommended to derive an accurate assessment of a business's worth.
Private Equity Valuation Methods improve active equity portfolio by valuing a business/company that is the core task of the financial analyst. Most PE/VC firms estimate a company’s value with the help of Equity Valuation Methods. To evaluate an organization, there should be enough understanding of Venture Valuation, which is considered as the most holistic evaluation approach.
Business valuation is the method involved in deciding the financial worth of an organization. A basic activity includes surveying different variables to show up at a gauge of what the business is worth in the commercial center. Understanding the worth of a business is fundamental for different purposes, including consolidations and acquisitions, raising capital, tax collection, Financial reporting and estate preparation.
Discover the vital role of Business Valuation Services in corporate finance, acquisitions, and more. Learn how accurate company valuation benefits startups and established businesses.
Private Equity Valuation Methods improve active equity portfolio by valuing a business/company that is the core task of the financial analyst. Most PE/VC firms estimate a company’s value with the help of Equity Valuation Methods. To evaluate an organization, there should be enough understanding of Venture Valuation, which is considered as the most holistic evaluation approach.
Business valuation is the method involved in deciding the financial worth of an organization. A basic activity includes surveying different variables to show up at a gauge of what the business is worth in the commercial center. Understanding the worth of a business is fundamental for different purposes, including consolidations and acquisitions, raising capital, tax collection, Financial reporting and estate preparation.
Discover the vital role of Business Valuation Services in corporate finance, acquisitions, and more. Learn how accurate company valuation benefits startups and established businesses.
Fundamental Analysis is defined as “researching the fundamentals”, that doesn’t convey the whole in the absence of knowledge about what fundamentals are. The big problem with defining fundamentals is that it can include anything related to the economic well being of a company. Thus, fundamentals include everything from a company’s market share to the quality of its management
Fundamental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis. Because the subject is so broad, however, it's tough to know where to start. There are an endless number of investment strategies that are very different from each other, yet almost all use the fundamentals.
Community PsychologyInstructionsFor this task, select two schoLynellBull52
Community Psychology
Instructions
For this task, select two scholarly articles related to "context and environment" and "support systems as infrastructure."
1. Summarize, evaluate and analyze each article, adding your critique and insights. Be sure to use proper APA citation format for each article.
2. Each article should be added as a separate submission. For each article, include the following:
· A brief summary of the resource
· An evaluation of the resource, including the author’s background, document source, and intended audience
· An analysis of the article, including its relevance to the topic
· Proper citation in APA format
· Correct spelling, grammar, and professional vocabular
Q1-
The chapter encourages analysts to develop forecasts that are realistic, objective, and unbiased. Some firms’ managers tend to be optimistic. Some accounting principles tend to be conservative. Describe the different risks and incentives that managers, accountants, and analysts face. Explain how these different risks and incentives lead managers, accountants, and analysts to different biases when predicting uncertain outcomes.
Development of forecasts is extremely important as various stakeholders rely on them to make important financial decisions. Depending on who is making the forecast, there will be some difference as there will be different incentives and risks associated.
When a manager is making the forecast, he/she/they will be more optimistic as this will make their work and the image of the business positive. Managers can try different ways to give that optimistic outlook in their forecast. After all, it's their own business and it's their duty to be better. They also have incentive for career growth and may be extra bonuses and benefits.
When accountants are making the forecast, they tend to be more conservation as they will use all the rules and regulations strictly as they need to make sure they are protecting the reputation of Their own and the company they work for. It is also professional ethics to report unbiased forecasts and therefore they tend to be more conservation.
When an analyst is making a forecast, they tend to be different from the manager and the accountant as well because they aren’t only using the data from that company alone but are doing the industry analysis, economic analysis, and competitive analysis to make a realistic forecast. They evaluate all the past figures but also compare it and make the forecast. An analyst can’t get emotional and get biased. Therefore, analysts forecast a perfect balance between managers’ optimism and accountants’ conservatism.
Q2-
Six Interrelated Sequential Steps in Financial Statement Analysis
1.Identifying Economic Characteristics Competitive Dynamics in the Industry
One of the major as well as the first step necessary in the valuation process is Industry Analysis. It is very important to know the economic trends, what the competition is doing as well as how ma ...
Equity in Accounting: Meaning, Types, & Practical Examples | Academy Tax4wealth Academy Tax4wealth
The value of equity can be determined through the current share price or a valuation established by professionals or investors. Enroll now, and make your career.
For more information, visit us at:-
https://academy.tax4wealth.com/blog/what-is-equity-in-accounting
Measure What Matters - New Perspectives on Portfolio SelectionUMT
Stock market investors articulate their goals explicitly or implicitly by following the philosophy and methodology of a market expert that fits their investment objectives and appetite for risk. For example, for value and income stocks they may rely on the research conducted by Wharton finance professor Jeremy Siegel¹ or read up on market pros like War-ren Buffet. Much like the stock market investor, companies investing in change face similar challenges when considering where to allocate budget and resources to meet financial and strategic objectives.
Keith turner quick silver funding solutions the role of finance in the stra...keithturnerquicksilverfun
A good strategic plan includes metrics that translate the vision and mission into specific end points. This is critical because strategic planning is ultimately about resource allocation and would not be relevant if resources were unlimited.
Valuation of Startups [with limitation of traditional valuation approach] Nitin Pahilwani
Valuation of Startups [with limitation of traditional valuation approach]
1. Introduction…
2. Factors affecting Start-up Valuation…
3. Limitation of Traditional Valuation Method…
4. Start-up Valuation Method…
a. Venture Capital Method…
b. Berkus Method…
c. Scorecard Method…
d. Risk Factor Simulation Method…
e. First Chicago Method…
5. Closing the Valuation Gap…
Valuation of Startups [with limitation of traditional valuation approach] N Pahilwani & Associates
Valuation of Startups [with limitation of traditional valuation approach]
1. Introduction…
2. Factors affecting Start-up Valuation…
3. Limitation of Traditional Valuation Method…
4. Start-up Valuation Method…
a. Venture Capital Method…
b. Berkus Method…
c. Scorecard Method…
d. Risk Factor Simulation Method…
e. First Chicago Method…
5. Closing the Valuation Gap…
Your Path to Profitable Stocks: The Fundamental Analysis AdvantageTech Seeker
In the world of investing, finding those golden opportunities that lead to profits is an ongoing quest. While technical analysis looks at past price movements, fundamental analysis dives deeper. It's all about understanding a company's true value for the long run.
Enter "The Fundamental Analysis Toolkit" – your go-to resource packed with strategies and tools for smarter financial decisions.
Fundamental analysis is built on the idea that a company's stock price should mirror its real worth, tied to its financial strength, market position, and future growth potential.
By carefully dissecting financial statements, industry trends, and competition, fundamental analysts spot hidden value and pinpoint undervalued stocks set for major growth.
This toolkit? It's your roadmap to mastering fundamental analysis. Here's what it'll do for you:
• Crack Financial Statements: Get the lowdown on crucial metrics and ratios that spill the beans on a company's financial health, stability, and potential for growth.
• Reveal True Value: Use fundamental analysis principles to gauge a company's real worth, separate from market hype and emotion.
• Navigate Industry Ins and Outs: Dig deep into industry analysis and competition to find companies with solid advantages and promising futures.
• Manage Risks and Spread Out: Learn to handle investment risks by diversifying your portfolio, setting yourself up for long-term financial wins.
• Real-Life Examples: Dive into successful stock picks backed by fundamental analysis, picking up savvy investment strategies along the way.
As you step into the shoes of a fundamental analyst, this toolkit becomes your trusty sidekick, arming you with the knowledge and tools for savvy investments and the potential to uncover those profitable stock gems.
This presentation is for business owners who are interested in building and maintaining value in their company with an emphasis on positioning the business for transition, and exit plannig.
Understand and maximize the Value of your Business.David C. Smith
This presentation outlines basic information used to value a business and identifies the 4 points of Sellability that can be used to increase the businesses value.
Fundamental Analysis is defined as “researching the fundamentals”, that doesn’t convey the whole in the absence of knowledge about what fundamentals are. The big problem with defining fundamentals is that it can include anything related to the economic well being of a company. Thus, fundamentals include everything from a company’s market share to the quality of its management
Fundamental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis. Because the subject is so broad, however, it's tough to know where to start. There are an endless number of investment strategies that are very different from each other, yet almost all use the fundamentals.
Community PsychologyInstructionsFor this task, select two schoLynellBull52
Community Psychology
Instructions
For this task, select two scholarly articles related to "context and environment" and "support systems as infrastructure."
1. Summarize, evaluate and analyze each article, adding your critique and insights. Be sure to use proper APA citation format for each article.
2. Each article should be added as a separate submission. For each article, include the following:
· A brief summary of the resource
· An evaluation of the resource, including the author’s background, document source, and intended audience
· An analysis of the article, including its relevance to the topic
· Proper citation in APA format
· Correct spelling, grammar, and professional vocabular
Q1-
The chapter encourages analysts to develop forecasts that are realistic, objective, and unbiased. Some firms’ managers tend to be optimistic. Some accounting principles tend to be conservative. Describe the different risks and incentives that managers, accountants, and analysts face. Explain how these different risks and incentives lead managers, accountants, and analysts to different biases when predicting uncertain outcomes.
Development of forecasts is extremely important as various stakeholders rely on them to make important financial decisions. Depending on who is making the forecast, there will be some difference as there will be different incentives and risks associated.
When a manager is making the forecast, he/she/they will be more optimistic as this will make their work and the image of the business positive. Managers can try different ways to give that optimistic outlook in their forecast. After all, it's their own business and it's their duty to be better. They also have incentive for career growth and may be extra bonuses and benefits.
When accountants are making the forecast, they tend to be more conservation as they will use all the rules and regulations strictly as they need to make sure they are protecting the reputation of Their own and the company they work for. It is also professional ethics to report unbiased forecasts and therefore they tend to be more conservation.
When an analyst is making a forecast, they tend to be different from the manager and the accountant as well because they aren’t only using the data from that company alone but are doing the industry analysis, economic analysis, and competitive analysis to make a realistic forecast. They evaluate all the past figures but also compare it and make the forecast. An analyst can’t get emotional and get biased. Therefore, analysts forecast a perfect balance between managers’ optimism and accountants’ conservatism.
Q2-
Six Interrelated Sequential Steps in Financial Statement Analysis
1.Identifying Economic Characteristics Competitive Dynamics in the Industry
One of the major as well as the first step necessary in the valuation process is Industry Analysis. It is very important to know the economic trends, what the competition is doing as well as how ma ...
Equity in Accounting: Meaning, Types, & Practical Examples | Academy Tax4wealth Academy Tax4wealth
The value of equity can be determined through the current share price or a valuation established by professionals or investors. Enroll now, and make your career.
For more information, visit us at:-
https://academy.tax4wealth.com/blog/what-is-equity-in-accounting
Measure What Matters - New Perspectives on Portfolio SelectionUMT
Stock market investors articulate their goals explicitly or implicitly by following the philosophy and methodology of a market expert that fits their investment objectives and appetite for risk. For example, for value and income stocks they may rely on the research conducted by Wharton finance professor Jeremy Siegel¹ or read up on market pros like War-ren Buffet. Much like the stock market investor, companies investing in change face similar challenges when considering where to allocate budget and resources to meet financial and strategic objectives.
Keith turner quick silver funding solutions the role of finance in the stra...keithturnerquicksilverfun
A good strategic plan includes metrics that translate the vision and mission into specific end points. This is critical because strategic planning is ultimately about resource allocation and would not be relevant if resources were unlimited.
Valuation of Startups [with limitation of traditional valuation approach] Nitin Pahilwani
Valuation of Startups [with limitation of traditional valuation approach]
1. Introduction…
2. Factors affecting Start-up Valuation…
3. Limitation of Traditional Valuation Method…
4. Start-up Valuation Method…
a. Venture Capital Method…
b. Berkus Method…
c. Scorecard Method…
d. Risk Factor Simulation Method…
e. First Chicago Method…
5. Closing the Valuation Gap…
Valuation of Startups [with limitation of traditional valuation approach] N Pahilwani & Associates
Valuation of Startups [with limitation of traditional valuation approach]
1. Introduction…
2. Factors affecting Start-up Valuation…
3. Limitation of Traditional Valuation Method…
4. Start-up Valuation Method…
a. Venture Capital Method…
b. Berkus Method…
c. Scorecard Method…
d. Risk Factor Simulation Method…
e. First Chicago Method…
5. Closing the Valuation Gap…
Your Path to Profitable Stocks: The Fundamental Analysis AdvantageTech Seeker
In the world of investing, finding those golden opportunities that lead to profits is an ongoing quest. While technical analysis looks at past price movements, fundamental analysis dives deeper. It's all about understanding a company's true value for the long run.
Enter "The Fundamental Analysis Toolkit" – your go-to resource packed with strategies and tools for smarter financial decisions.
Fundamental analysis is built on the idea that a company's stock price should mirror its real worth, tied to its financial strength, market position, and future growth potential.
By carefully dissecting financial statements, industry trends, and competition, fundamental analysts spot hidden value and pinpoint undervalued stocks set for major growth.
This toolkit? It's your roadmap to mastering fundamental analysis. Here's what it'll do for you:
• Crack Financial Statements: Get the lowdown on crucial metrics and ratios that spill the beans on a company's financial health, stability, and potential for growth.
• Reveal True Value: Use fundamental analysis principles to gauge a company's real worth, separate from market hype and emotion.
• Navigate Industry Ins and Outs: Dig deep into industry analysis and competition to find companies with solid advantages and promising futures.
• Manage Risks and Spread Out: Learn to handle investment risks by diversifying your portfolio, setting yourself up for long-term financial wins.
• Real-Life Examples: Dive into successful stock picks backed by fundamental analysis, picking up savvy investment strategies along the way.
As you step into the shoes of a fundamental analyst, this toolkit becomes your trusty sidekick, arming you with the knowledge and tools for savvy investments and the potential to uncover those profitable stock gems.
This presentation is for business owners who are interested in building and maintaining value in their company with an emphasis on positioning the business for transition, and exit plannig.
Understand and maximize the Value of your Business.David C. Smith
This presentation outlines basic information used to value a business and identifies the 4 points of Sellability that can be used to increase the businesses value.
Skills needed to Manage your SubordinateEmanuele Musa
What are the skills needed to manage your subordinates?
COMMUNICATION - Leaders help communicate the firm's vision and mission to employees. This provides direction and helps everybody identify the roles that best fit their skills and experiences. Through clear communication, leaders encourage their subordinates to act for the actualisation of objectives.
ACTIVE LISTENING - Healthy communication between leaders and team members establishes a foundation for trust. When your team members know that they will be heard, they can openly share their ideas and provide honest feedback. This, in turn, drives employee engagement and positive business outcomes, including innovation, productivity and profitability.
TEAMWORK - Teams can achieve higher levels of performance than individuals because of the combined energies and talents of the members. Collaboration can produce motivation and creativity that may not be present in single-contractor projects. Individuals also have a sense of belonging to the group, and the range of views and diversity can energise the process, helping address creative blocks and stalemates. By involving team members in decision-making, and calling upon each member’s area of contribution, teams can produce positive results.
FLEXIBILITY- Flexible leaders are those who can modify their style or approach to leadership in response to uncertain or unpredictable circumstances. In addition, flexible leaders can adapt to changes as they come. They can revise their plans to incorporate new innovations and overcome challenges while still achieving their goals.
SELF CONFIDENCE- To teach leadership without first building confidence is like building a house on a foundation of sand.leadership is about having the confidence to make decisions. If someone is afraid to make and commit to decisions, all of the communication and empowerment in the world won't make a difference.
ENTHUSIASM - Your attitude will determine your direction. Successful people are passionate about their work and the activities they engage in. For successful people, enthusiasm is a key driver of passion and achievement. While Enthusiasm comes from within, whether you’re enthusiastic or not is a choice.
We have proposed to the EU a virtual incubation program aimed at helping Micro and small social enterprises (spread across 9 Countries) that are highly affected by the Covid 19 crisis. The ambition is to help these companies increase their business + financial + sustainability literacy while working side by side with stakeholders to review strategy and increase their business model resilience. Several organizations started reaching out to propose the same program locally: we are currently planning cohorts in Greece and Uganda. For more info: manu@babele.co
Babele - accelerator management software for impact innovation programsEmanuele Musa
A network and a digital incubator to manage impact innovation programs, engage stakeholders in business modeling, online mentoring, co-creation and peer-collaboration.
Bt masterclass 2 - Value proposition developmentEmanuele Musa
What creates value?
Execution, Price, Cost Reduction, Risk Reduction, Novelty, Performance, Customization, Design & Usability, Convenience & Accessibility, Brand or Status, Feels Good, Positive Impact.
Focus on one proposition or create your own perfect mix.
Level up - First SDGs accelerator in CEEEmanuele Musa
Babele.co & Nod Makerspace are launching the first SDGs accelerator in Central & Eastern Europe, aimed at supporting the Sustainable Development Goals of the UN.
Here is the model:
- We invite different corporation choose 1 or more SDGs that they wish to support;
- We scout for different NGOs and social ventures promoting these SDGs;
- We let the corporate choose the venture that they want to adopt for the program;
Both venture and up to 10 employees from the sponsor company will attend the accelerator. The goal is three-fold:
- Support the social enterprise to scale its impact;
- Foster the entrepreneurial mindset of corporate employees;
- Use the program as a platform to develop a corporate-startup collaboration, focused on the SDG that both wish to support.
If you wish to learn more, please reach out to manu@babele.co
Babele - accelerators for greater impactEmanuele Musa
A network and a digital tool to manage accelerator programs, engage stakeholders in business modeling, online mentoring, co-creation and peer-collaboration.
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An introduction to the cryptocurrency investment platform Binance Savings.Any kyc Account
Learn how to use Binance Savings to expand your bitcoin holdings. Discover how to maximize your earnings on one of the most reliable cryptocurrency exchange platforms, as well as how to earn interest on your cryptocurrency holdings and the various savings choices available.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
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Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
4. Introduction
The objective of this portion of mentorship is to allow the
entrepreneurs learn practical insights on how to assess and
value business and Learn how to identify factors that may influence an
investor's perception of "business value”. The mentorship will focus on:
› Introducing common approaches used for arriving at values that form the
basis of negotiation with investors/financiers/shareholders. In addition to
valuation methods, you will understand the importance of gathering a deep
understanding of the organization's industry, technology, business
environment, customers, competitors, synergies, current major
stakeholders, and the rationale for selling or the reluctance to sell and how
all these factors come into play when arriving at valuations.
› Teach you how to value a business and get a deeper understanding of the
variables in business valuation to help you make the right decisions.
› Introduces you to the essence of Deal Room
› What contents are to be presented in a deal roam
› Introduces you to deal room ethics
5. Financial Review Defined
Business valuation, also known as company valuation, is the process
through which the economic value of a business is calculated.
Purposes of Business Valuation:
› The purpose of a valuation is to find the intrinsic value of a company
- its value from an objective perspective.
› Business valuations are used for a variety of reasons mostly by
investors, business owners and intermediaries such as
banks/financiers, who are seeking to accurately value the
company’s equity and performance for some form of investment or
divesture.
› Identify factors that may influence an investor's perception of
"business value”’.
6. The Big Question
› Why do we evaluate businesses?
› How should you approach reviewing your financials?
› What documents should you analyse?
› What exactly should you be looking for?
THESE ARE FUNDAMENTAL QUESTIONS THAT THIS
MENTORSHIP PROGRAM WILL DISCUSS.
7. WHY DO WE CONDUCT BUSINESS VALUATION
A business valuation helps establish a baseline value which enables you to
create more informed financial goals, business strategies and marketing
objectives. Annual business valuations allow you to understand your
company's potential for growth and innovation.
Business Valuation Drivers:
1. Understand Your Current Business Value
› Create a baseline value for your company to know where you stand
in the marketplace. Know how far your company has come since its
inception. Its Financial Performance and how your company
competes with its peers in the market.
2. Understand Potential for Growth:
› A business valuation helps establish a baseline value which enables
you to create more informed financial goals, business strategies and
marketing objectives. Annual business valuations allow you to
understand your company’s potential for growth and innovation.
8. WHY IS DO WE CONDUCT BUSINESS VALUATION
3. Ensure Proper Protection of Your Asset
› Knowing the real value of your most prized asset allows you to
protect it best.
4. Develop a Succession, exit or Sale Plan
5. For Buy-Sell Agreements (With Partners, etc)
6. To Work With Lenders/Investors
7. Trust/Estate Planning
› Your business worth determines what kind of tax planning you need
to do for your estate (Other countries, E.g. USA estate tax
exemption limit).
8. Strategize for Future Acquisitions
› Business valuation allows you to know where you stand now and
your company’s potential for growth, including developing strategies
for future divesture/acquisitions/fund raising/expansion.
12. VALUATION METHODS
1. Book Value
One of the most straightforward methods of valuing a company is to calculate
its book value using information from its balance sheet. Due to the simplicity of
this method, however, it’s notably unreliable.
Formular: Subtract the company’s liabilities from its assets to determine
owners’ equity. Then exclude any intangible assets. The figure you’re left with
represents the value of any tangible assets the company owns.
Other School of Thought on this method: B/S figures can’t be equated with
value due to historical cost accounting and the principle of conservatism.
Relying on basic accounting metrics doesn't paint an accurate picture of a
business’s true value.
Intangible asset is an asset that is not physical in nature (goodwill,
intellectual property, trademarks)
13. VALUATION METHODS…….
2. Discounted Cash Flows
Discounted cash flow valuation is a process of estimating the value of
a company or investment based on the money, or cash flows, it’s
expected to generate in the future.
Formular:
The benefit of discounted cash flow analysis is that it reflects a
company’s ability to generate liquid assets.
14. VALUATION METHODS…….
Downside
The major limitation of DCF is that it involves estimates, NOT
ACTUALS. So the result of DCF is also an estimate.
Future cash flows are subject to a number of factors e.g. market
demand, performance of the economy, technology, competition,
regulatory environment and unforeseen threats or opportunities.
These cannot be quantified with precision. Investors/entrepreneurs
must understand this inherent drawback for their decision-making
while using this method.
NOTE:
For DCF to be of value, estimates used in the calculation must be as
accurate as possible. Badly estimated future cash flows that are too
high can result in an investment that might not pay off enough in the
future. Likewise, if future cash flows are too low due to rough
estimates, they can make an investment appear too costly, which
could result in missed opportunities.
15. VALUATION METHODS
3. Market Capitalization
Market capitalization is one of the simplest measures of a publicly
traded company's value. It’s calculated by multiplying the total
number of shares by the current share price.
Market Capitalization = Share Price x Total Number of Shares
One of the shortcomings of market capitalization is that it only
accounts for the value of equity, while most companies are financed
by a combination of debt and equity.
16. VALUATION METHODS…….
4. Enterprise Value
Enterprise value (EV) measures a company's total value, often used as a
more comprehensive alternative to market capitalization
The components of EV include market capitalization, total debt, and cash
and cash equivalents.
Enterprise Value = Debt + Equity – Cash
Limitations of EV:
1. Its failure to consider off-balance sheet items (e.g. leases, contingent
liabilities) and its comparability to other financial metrics which may
underestimate the total value of a company's assets.
2. Its sensitivity to changes in interest rates (which may provide unreliable
indicator of a company's overall value during periods of significant
interest rate volatility)
17. VALUATION METHODS…….
5. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization):
It measure a company’s financial health and ability to generate cash flow.
NOTE:
(i) Tax policies/treatment of a country can have significant influence on earning
(ii) Net income subtracts interest payments to debt holders, which can make
organizations look more or less successful based solely on their capital
structures. Given these considerations, both are added back to arrive at
EBIT (Earnings Before Interest and Taxes).”
Formular: EBITDA = E+I+T+D+A
Where: E= net income, I=Interest, T=Taxes, D=Depreciation, A= Amortization
NOTE:
1. EBITDA calculations can be deceptive: It can be used to obscure warning
signs, such as high levels of debt, escalating expenses and lack of profitability.
18. VALUATION METHODS…….Some dfns
2. EBITDA does not account for changes in working capital. While -ve
EBITDA value tends to signal that the business has trouble with profitability, a
+ve value is not necessarily synonymous with a healthy company (taxes and
interest are actual expenses for which that business must account.
3. EBITDA can be manipulated. EBITDA can also provide a distorted picture
of how much money a company has available to pay off interest. When you
add back depreciation and amortization, a company’s earnings can appear
greater than they really are. EBITDA can also be manipulated by changing
depreciation schedules to inflate a company’s profit projections.
Definitions:
Amortization is the process of incrementally charging the cost of an intangible asset
(good will, trademarks, intellectual properties) to expense over its expected period of
use, which shifts the asset from the B/S to the Income statement. It essentially reflects
the consumption of an intangible asset over its useful life.
Depreciation is a planned, gradual reduction in the recorded value of a tangible asset
over its useful life by charging it to expense. Depreciation is applied to fixed assets,
which generally experience a loss in their utility over multiple years.
19. Questions for Discussion
Having reviewed different business valuation methods, the
questions that arises are:
› which is the best valuation method to use?
› How do we know whether a given valuation method is
more appropriate for a specific company than the
others?
› Is there one best method that fits all purposes
21. Discussion…….
When choosing evaluation method, one need to look at 3 key factors:
1. Characteristics of the Company: The first and most important factor
is the characteristics of the company that is being valued (e.g.
company with fixed assets and those with intellectual properties such
as google).
2. Characteristics of the Investor: institutional, individual, sector, bank.
3. Purpose/motive of Investment: What is the purpose of investment
(e.g. M&A, Acquisition, direct investment, is it for short, medium, long
term, etc).
Recommended : Use of Multiple models
It is advised to use multiple models to derive the valuation of a
company, instead of using a single model.
24. Dealroom ….Defined
DealRoom is a digital investment platform that provides access to
opportunities and brings entrepreneurs/startups and investors
together in a single digital platform. It provides to both parties:
• A digital engagement platform/space
• It leverages data, network and partnerships to digitally connect with
investors or investors connecting with investment opportunities
• Provide research information on multi-sectors
• Provides a database and in-sector/industry analysis with market
analysis and insights, compliance and regulatory information
• Trusted/reliable engagement space
25. Choosing a Deal Room
o Many deal rooms are designed to target specific sectors/industries
e.g. tech, fintech, agriculture, energy, etc.
o This does not mean that there are no universal deal rooms that are
open for all sectors.
o Before making submission to a deal room, it is important for the
entrepreneur to understand:
1. Qualification requirements
2. Terms and conditions
3. Type of investment(s) offered
4. Documents required during submission
5. Ask yourself, Does my business qualify? Is there area of
improvement I am required to meet the application criteria?
6. Where criteria are not met, DO NOT APPLY.
26. Key Documents to be submitted
Deal rooms are designed to provide both applicant entrepreneurs and
investors with key information that help each to make informed decision. Key
documents required from the applicant include, but not limited to:
I. Product–market fit (Concept)
II. Data that shows you have a large addressable target market:
• Include market sizing and drill down to your target market
• Data that shows you are solving a real problem and that the solution
is sustainable (If no problem being solved, NO business)
This also includes customer data to prove your value proposition and pricing
model:
• Customer acquisition and retention strategy (supported by data)
• Customer engagement levels (for example, how often do they use your
product/service and which product functions they use)
• Customer ROI
• Growth potential (supported by data)
• Competitive positioning
27. Key Documents to be submitted
III. Financials
1. Detailed Financial projections (3-5 years)-Where debt applied, projections
must be in line with the debt tenor
2. Audited financials (If NOT new coy) at least for 3 years with latest mgt a/c
Investor are looking for your profit and loss history, balance sheet, current
financing structure and comparable valuations and in particular looking for
these key drivers:
• Gross margins
• Trajectory of monthly recurring revenue (MRR)/costs
• Cost of acquisition (CAC)
• Long-term value (LTV) quantification
LTV is calculated by multiplying the value of the customer to the business by
their average lifespan. It helps a company identify how much revenue they can
expect to earn from a customer over the life of their relationship with the
company.
Customer value is created through the solution that a product or service
provides, not only to the buyer but to their organization as well and it is
subjective.
28. Key Documents to be submitted
• Sales pipeline and forecasts
• Planned application/usage of funds being raised
• Major offtake contracts to validate business model (where such
exists)
IMPORTANT:
o Be transparent in your numbers.
o Avoid red flags such (e.g. dealings with other companies run by
the same founders, intercompany assets or Intellectual Property
(IP) ownership. These need to be minimized or clearly
explained.
o Highlight non-dilutive funding or support you have raised through
pitching contests, and provincial and grants, as it further
validates your business and increases your credibility as a
credible company.
29. Key Documents to be submitted
IV. Company documents and cap table
› Work on maintaining a “clean cap” table leading up to fundraising to
minimize investor objections.
A “clean cap” table is one with no toxic debt or founder over-dilution
› Provide the following documents:
• Articles of incorporation (MEMATS
• Co-founders’ bios and profiles of other investors
• Share option pool where such exists (these are shares reserved for
special group, e.g. employees
• Terms and clauses that may impact the future, such as liquidation
preferences on prior term sheets that will affect new investors
A liquidation preference is a clause in a contract that dictates the pay-out
order in case of a corporate liquidation. i.e. the company's investors or
preferred stockholders get their money back first, ahead of other kinds of
stockholders or debtholders, in the event that the company must be
liquidated.
30. Key Documents to be submitted
NOTE:
Investors or VCs like to see co-founders who have solid skin in the
game in terms of their financial stakes. They may be wary if early-
stage founders are proposing to give away a significant percentage of
the equity (typically over 20%) in a financing round.
V. Product road map and competitive positioning
In order to demonstrate your product’s value and market
differentiation, include data such as:
• A product/service demo link
• Information on your intellectual property (e.g. patents and
trademarks)
• Analyst reports that validate your product/services
31. Key Documents to be submitted
VI. Available Skillsets/Staff
Founders and co-founders are generally expected to be singularly
focused/involved on their startup/business. If that is not the case, you
need to be able to provide investors with a good reason why you are
not, as well as a plan for the transition to full time involvement to show
their commitment to the business. Include details about:
• Founders and their individual (and joint) working track records
• Bios of advisors and other key executives
• Transition plan to full involvement
What NOT to share in your deal room
Make sure you do not share code or any proprietary information (such as high-
value sales prospects) or trade secrets in your data room.
34. Deal Room ethics
o Ethics can be defined as moral principles that govern a person's or
business’s behaviour or the conduct of their activities.
o Deal rooms, like any other trading platforms, are guided by sets of
ethics that guide the conducts stakeholders.
Importance of Ethical Behaviour:
• Consistent ethical behaviour (company, directors) comes
an increasingly positive public image.
• Considerations to potential investors and
shareholders/stakeholders.
• Retention of positive image (necessary to investors &
Stakeholders)
• An ethical behaviour can result into to reputation and financial risks
35. Ethical Behavior Elements
When participating/engaging in a deal room, you are required to
observe/exhibit at least the following basic ethical behaviours:
1. Integrity: When engaging in the deal room, one must demonstrate honesty,
trustworthiness, and reliability and hold themselves to a higher standard.
2. Accountability and Responsibility: You are accountable for your action,
including everything you submit to the platform. Commitment to following and
adhering to ethical practices and rules as defined by the platform (dealroom)
is paramount.
3. Transparency: Without divulging trade secrets, you must ensure that
information submitted e.g. financials, prices, various company policies, and
promotions are available to those interested in the business's success (incl.
investors/stakeholders) and represent a true picture/reality.
4. Respect for others: You must foster ethical behaviour and environments in
the Deal Room, including, privacy, equality, opportunity, dignity, compassion,
and empathy.
36. Ethical Behavior Elements…..
5. Respect for laws and compliance: You must ensure that your
business adheres and comply to both regulations as set by the deal
room and all local and national business compliance/ laws.
6. Environmental concern: In a world where resources are limited,
ecosystems have been damaged by past practices, and the climate is
changing, it is of utmost importance to be aware of and concerned
about the environmental impacts a business may cause and provide
mitigation to address them
37. Take Aways
› Unethical business practices and ethical misconduct can lead to
serious consequences which can cause the company time and
money in trying to repair their business reputation and any legal
issues that may arise depending on the severity of the situation.
› Can lead to be restricted from the dealing room and loss of
investors
› To protect your company from an ethical misconduct, you need to
incorporate a management plan, policies and corporate culture in
order to stay on top of any unethical practices within the corporate
environment.