The Master in Corporate Finance is a 100 % finance-focused program in English, designed to provide the most sophisticated techniques and tools of Financial Management
A Business Valuation Article: Relative Valuation uses the valuation ratios of Comparable publicly traded companies and applies that ratios to the comapny being valued subject to necessary adjustments.
Key Issues in Relative Valuations- a) Peer Selection, b) Current Multiples or Forward Multiples, c) Adjustments to the Value...
Company Valuation PowerPoint Presentation Slides SlideTeam
Get ready-made Company Valuation PowerPoint Presentation Slides to analyse all the profit and net value your business has made. Conduct a thorough evaluation of a company’s management, capital structure, future earning prospects, and more with the help of professionally designed company valuation PPT presentation templates. Determine the current worth of a business and assess all aspects of a business. This deck comprises of several company valuation PowerPoint templates like valuation methodology, valuation steps, company valuation methodologies, determining free cash flow, valuation results, business due-diligence process, strategic due-diligence methodology, and more. Incorporate business valuation PowerPoint slideshow to estimate the selling price of the business. Use business valuation methods PowerPoint techniques for valuing a business asset such as cost approach, cost to build, replacement cost, market approach, discounted cash flow, forecast future cash flow, etc. Grab access to the company valuation complete PowerPoint deck for a business analysis. Employ a few jocular expressions with our Company Valuation Powerpoint Presentation Slides. It helps insert a bit of humor.
Moneycation march 2015 newsletter; volume #3, issue #7A.W. Berry
Investment analysis is an art and a science. It is an art in the sense that agility and dynamic fluid thinking are useful when making decisions using empirically derived data. Fundamental analysis is one such method that is not pure science, but uses mathematical techniques to ascertain key financial information such as solvency, risk, liquidity, profit margin, expected rate of return and so on.
A Business Valuation Article: Relative Valuation uses the valuation ratios of Comparable publicly traded companies and applies that ratios to the comapny being valued subject to necessary adjustments.
Key Issues in Relative Valuations- a) Peer Selection, b) Current Multiples or Forward Multiples, c) Adjustments to the Value...
Company Valuation PowerPoint Presentation Slides SlideTeam
Get ready-made Company Valuation PowerPoint Presentation Slides to analyse all the profit and net value your business has made. Conduct a thorough evaluation of a company’s management, capital structure, future earning prospects, and more with the help of professionally designed company valuation PPT presentation templates. Determine the current worth of a business and assess all aspects of a business. This deck comprises of several company valuation PowerPoint templates like valuation methodology, valuation steps, company valuation methodologies, determining free cash flow, valuation results, business due-diligence process, strategic due-diligence methodology, and more. Incorporate business valuation PowerPoint slideshow to estimate the selling price of the business. Use business valuation methods PowerPoint techniques for valuing a business asset such as cost approach, cost to build, replacement cost, market approach, discounted cash flow, forecast future cash flow, etc. Grab access to the company valuation complete PowerPoint deck for a business analysis. Employ a few jocular expressions with our Company Valuation Powerpoint Presentation Slides. It helps insert a bit of humor.
Moneycation march 2015 newsletter; volume #3, issue #7A.W. Berry
Investment analysis is an art and a science. It is an art in the sense that agility and dynamic fluid thinking are useful when making decisions using empirically derived data. Fundamental analysis is one such method that is not pure science, but uses mathematical techniques to ascertain key financial information such as solvency, risk, liquidity, profit margin, expected rate of return and so on.
Valuation of Private vs. Public Companies. Private company valuations are discounted based on several risk factors associated with private sector investing, which results in a marked difference between the valuation of a privately held company, subsidiary or a division and a publicly traded corporation.
Fundamental Analysis by Vivek SrivastavaAxis Direct
Fundamental Analysis is a study of factors (company specific and external environment) that affect the value of stock. This program will help you to understand the impact of factors on the valuation of the stock, analysis of the environment and interpretation of financial statement.
For more information visit : https://simplehai.axisdirect.in/learn/eclasses
Valuation of Private vs. Public Companies. Private company valuations are discounted based on several risk factors associated with private sector investing, which results in a marked difference between the valuation of a privately held company, subsidiary or a division and a publicly traded corporation.
Fundamental Analysis by Vivek SrivastavaAxis Direct
Fundamental Analysis is a study of factors (company specific and external environment) that affect the value of stock. This program will help you to understand the impact of factors on the valuation of the stock, analysis of the environment and interpretation of financial statement.
For more information visit : https://simplehai.axisdirect.in/learn/eclasses
COMPANY ANALYSIS-HINDUSTAN UNILEVER LTDSaiLakshmi115
Introduction to company analysis# About the company in short # vision # mission # Standard of conduct # culture and value # business model of HUL # swot analysis of HUL # management and its structure # corporate culture and governance # Quantitative analysis of the company- HUL: Earnings, Leverages, competitive edge, production efficiency, financial analysis, cash flow, Ratio analysis # conclusion
Financial ratios and their use in understanding Financial StatementsPranav Dedhia
An introduction and in-depth understanding on the importance of Financial ratios in understanding financial statements of business entities along with relevant examples
MCF è un master specialistico internazionale rivolto ai futuri manager del settore finanziario, progettato per fornire tecniche e strumenti avanzati di gestione finanziaria
MCF is a Specialized Master in English aimed at future managers of the financial sector. It is designed to provide financial management techniques and tools.
Principi di Procurement & Supply Management
by Giuseppe Stabilini, SDA Professor of Operations and Technology Management
Coordinatore dell’Executive Program in Procurement & Supply Management
By Giuseppe Stabilini, SDA Professor of Operations and Technology Management
Coordinatore dell’Executive Program in Procurement & Supply Management. Scopri di più sul programma: www.sdabocconi.it/procurement
Dott.ssa Irene Bracelli Dipartimento Amministrazione Penitenziaria - Responsabile Sviluppi Informativi (Sezione del Personale) Ministero della Giustizia Tutor: Prof.ssa Greta Nasi
Analisi del posizionamento strategico del Dipartimento della Protezione Civile della Presidenza del Consiglio dei Ministri nel quadro del Servizio Nazionale istituito dalla L. 24 febbraio 1992, n. 225
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
The WhatsPump Pseudonym Problem and the Hilarious Downfall of Artificial Enga...
MCF - Master in Corporate Finance - SDA Bocconi
1. MASTER IN CORPORATE FINANCE
MULTIPLES: THEORY AND PRACTICE
Alberto Dell’Acqua, Ph.D.
2. 1 Intro & valuation road map
2 Identifying/selecting comparables
3 Types of multiples
4 Multiples in practice: input the correct data
5 Interpreting results
6 Conclusions
SUMMARY
3. Comparable
Companies’
Multiples
Market
Information
Current Market Valuation Company Valuation
DCF
Analysis
In-Depth Analysis
Comparable
Transactions’
Multiples
Comparable Companies’ Trading Multiples and Comparable Transactions’ Multiples
represent the “market perspective” and the most commonly used valuation instrument
1. INTRO TO “COMPS” VALUATION
Overview of Valuation Process
Source: Merrill Lynch (M&A)
4. COMPARABLE
COMPANIES’
TRADING
MULTIPLES
Comparable Companies vs. Comparable Transactions
AGGREGATE VALUE REFERENCE DATE
COMPARABLE
TRANSACTIONS’
MULTIPLES
Market value of a standalone
company
Consideration paid by an acquiror
for a company acquisition
Value includes takeover premium
(“premium for control”)
Value of a company’s shares
today
Multiples are expressed relative
to current or expected
performance
Value paid in transactions
occurred in the past
Multiples are expressed relative
to historical financials of target
company
1. INTRO TO “COMPS” VALUATION
5. EQUITY MULTIPLES
ENTERPRISE
MULTIPLES
WHO
USES
IT
WHAT IT GIVES
YOU
Financial
Analyst
Key
Pros
DCF LEVERAGED VALUE
Retail
Investors
Financial
Analyst
Private
Equity
Common Equity
Value only
Firm value which
can be converted
to equity value
Fundamental value
of a company
including value of
control
How much debt
a company can
bear
Easy to calculate
and to understand
Avoids worst
accounting
distorsions
Not distorted by
market events
or accounting
policies
To estimate how
much a financial
buyer can pay
1.VALUATION ROAD MAP
6. EXCESS CASH
OPERATIONAL
ASSETS
OPERATIONAL
LIABILITIES
Blue = Assets and liabilities determined by a company’s financial strategy
DEBT
EQUITY
Grey = Assets and liabilities driven by everyday strategic operational and
investing decisions
The Balance Sheet will help you understand the relationship
between Equity Value and Enterprise Value or Firm Value
Fixed Claims
Residual Claims
Excess cash means….
remaining cash
after operational
needs are met
1. THE FOUNDATION
7. Alpha’s Enterprise Value: an example
- The market capitalisation of Alpha is 1.500.000
- The total value of short and long term debt on Alpha’s balance sheet
is 7.500
- The value of cash on Alpha’s balance sheet is 106.000
- The value of short-term investments on Alpha’s balance sheet is 50.000.
We treat short-term investments as cash equivalents.
Calculating Enterprise Value:
Equity value 1.500.000
+ Debt 7.500
- Cash 106.000
- Short-term investment 50.000
= Enterprise Value 1.351.500
1. THE FOUNDATION
8. Enterprise value to equity value – and back
- Enterprise Value represents the market value of the company’s net
operational assets plus the value of its future growth opportunities and
intangible assets not on the balance sheet.
- Equity value represents the market value of the shareholders’ investment
in the business.
- The following equations provide simple conversions between Equity and
Enterprise Value:
Market Capitalisation = Share price * shares outstanding
Enterprise Value = Market capitalisation + net debt
Enterprise Value = Market capitalisation + debt - cash
Equity Value = Enterprise value + cash - debt
1. THE FOUNDATION
9. Principle: multiples valuation starts with identifying appropriate comparable
companies.
Take the perspective of an investor in equities (shares) when you are identifying comparables. Equity
investors focus on companies’ future profitability, so choose companies with comparable drivers of
future profitability.
Steps: STEP ISSUE
1. Identifying/selecting
comparables
Verifying the meaning and
the coherence of the
multiples
“Cleaning” the sample
2. Choosing the proper grid
of multiples for the
evaluation
Searching for relevant
relationships among
multiples, business models
and value drivers
Use the same approach in
comparing multiples of
different companies
(restatement methods,
accounting standards)
3. Analysis of results Choosing the proper grid of
multiples for the evaluation
2. BASIC COMPARABLES
10. Select the right comparable companies’ universe
Input the correct data
Interpret results
Apply results
Doing the “Comps” through four stages:
Doing the comps in practice
2. BASIC COMPARABLES
11. Principle: in general, in order to identify the appropriate combination of
companies you should analyse the following factors:
KEY DRIVERS
• Business
• Business mix (conglom. vs pure player)
• Perspective of growth
• Size of business
• Business profitability
• Geographic presence
• Stock liquidity
• Level of investment
• Financial strength
• …
PARAMETERS
• Activity
• Revenues split, EBITDA
• Growth rate of sales and profits, market
share, quality, economics
• Sales
• Margins (EBITDA/EBIT margin, ecc..)
• Geographic sales mix
• Free float
• Capital expenditures (capex)
• Debt ratios (D/E, Net Debt/EBITDA,…)
• …
Where you can get these numbers:
Analyst researh, research company database (Bloomberg, Facset,..), annual reports,
specialized industry publications, broker reports.
2. COMPARABLES CHECKLIST
12. You can choose either an enterprise or an equity value multiple. Enterprise
multiples use earnings above the interest line; equity multiples use earnings
below the interest line.
3. TYPES OF MULTIPLES
ENTERPRISE
VALUE
DEBT• Ent Value/Sales
• Ent. Value /EBITDA
• Ent. Value / EBIT
• Ent. Value /CF
• P/E
• P/Cash
Earnings
• P/BV
EQUITY
VALUE
14.
gk
gDIV
P
e
10
0
1
0
0
1
1
t
t
t
)k(
gDIV
P
e
gk
gpayout
E
P
e
1
0
0
gk
payout
E
P
e
1
0
DIV0 =E0payout
E0 (1+g) = E1
g = (1-payout)ROE
PE with growth: determinants and equations
3. TYPES OF MULTIPLES
17. PROSMULTIPLES CONS
EV/CF
• It is not affected by accounting
policies
• It takes into account only
monetary costs
• FCF are more complex to
calculate
• The volatility of cash flows could
affect the effectivness of the
valuation.
EV/Sales
• It is used when sales are the
main key driver
• Negative margins, cash flow
• It implies the same level of
profitability
• It could be considered as a
proxy of the operating cash flow
(before capex)
• It is not affected by accounting
policies
• It doesn’t take into account the
invested capital (depreciation)
EV/EBITDA
• It takes into account the
invested capital
• It is a measure of the operating
profitability of the firm
• It is affected by accounting
policicies (ie depreciation)
EV/EBIT
Enterprise Value
3. TYPES OF MULTIPLES
18. P/E
P/Cash
Earnings
(1)
P/BV
• Semplicity
• Differences in accounting
policicies
• Differences in tax management
• Differences in financial
structure choice
• It is not affected by accounting
policies
• Not popular
• Differences in taxation
• Differences in accounting
principles (except depreciation
policy) and in financial structure
choices
• Importance of tangible assets in
the valuation
• Differences in accounting
principles could lead to a
misleading interpretation in
comparing companies.
(1) Net profit + Depreciation + Amoritsation
Equity Value
PROSMULTIPLES CONS
3. TYPES OF MULTIPLES
19. PRICE
– Source data (Facset, Bloomberg, Datastream)
– Market stock price
– Period of flows to use to estimate multiples :
o Current multiples:
– are obtained by comparing stock
prices and the last available balance
sheet
o Trailing multiples:
– are obtained by comparing stock
prices and the results of the last
twelve months before the date chosen
to calculate the index. Results on the
previous twelve months are taken by
the four quarterly report or the last by-
yearly report, provided by the
companies
o Leading multiples:
– are obtained by comparing stock
prices and the expected results of the
following year or those of the next
ones. Estimations are usually taken by
the consensus forecast, published by
financial analysts associations. In
Europe the most reliable are IBES and
DataStream
T0
0
E
P
L12M
0
E
P
T1
0
E
P
Current
multiple
Trailing
multiple
Leading
multiple
Where:
EL12M = earnings per share referring to the last 12
months
ET1 = earnings per share expected for the next year
E T0 =earnings per share generated in the last year.
Current, Trailing and Leading Multiples
3. TYPES OF MULTIPLES
20. BALANCE SHEET VALUES
Equity Market Value
Debt
Financial Debt
ST/LT Borrowings
Bond/Convertible bond
Others (Preferred shares, Operative leasing, Pension
funds, ..)
Book value (last balance sheet/available interim)
Book value (last balance sheet/available interim)
Market value if available
Book value/Market value if available
Liquid assets
Cash
Stocks
Sum of money as security
Book value
Market value if available
Book value
Minorities Market value or Book value (last balance sheet/available
interim)
Equity investments Market value or Book value (last balance sheet/available
interim)
4. MULTIPLES IN PRACTICE
the numerator
21. Shares
1. First Method: number of outstanding shares (without considering treasury stock)
2. Second Method: number of outstanding shares (including treasury stock). The
market value of treasury shares is added to the liquid assets of the company.
The first method is the most used.
EQUITY VALUE = Price x N. shares
Data Method 1 Method 2
Price (euro) 10 10 10
n. share issued (mln) 10 10 10
n. treasury shares (mln) 2 2 0
n. shares (mln of euro) 8 10
Equity value (mln of euro) 80 100
Debt (mln of euro) 50 50 50
Cash (mln of euro) -10 -10 -30
Net Debt (mln of euro) 40 20
Enterprise value (mln of euro) 120 120
4. MULTIPLES IN PRACTICE
dealing with treasury stocks
22. The Market value of debt:
- Typically, book value of debt is a good proxy for market value
For highly distressed companies and hybrid debt, use market value
- Figure for cash balances and short-term liquid investments excludes cash balances
needed to run the business
- Use most recent balance sheet, adjust for any material changes (acquisitions, disposals,
capital increase)
- Always check whether anything material happened since the last balance sheet
- Always check the consistency between your balance sheet data and your operating
data
Example:
Latest balance sheet is published in March 05, for FY ending Dec 04
In April 05, the company issue a US$100m bond
You do the comps today and your forecasts include the interests paid on this bond (say
US$5m a year) and future yield on new investments
4. MULTIPLES IN PRACTICE
dealing with financial debt
23. COMPARABLES- MINORITIES
MARKET VALUE BOOK VALUE
Change = - 1,1x
EXAMPLE: TELECOM ITALIA 16/11/2004
Market cap (in €mm) 42.766,7
Net debt/(cash) 31.421,0
Minorities 4.249,0
Altro (2.198,0)
Firm value (in €mm) 76.238,7
2004A 2005E 2006E
EBITDA (€ mm) 14.532,0 15.131,3 15.589,3
EV/EBITDA 5,2x 5,0x 4,9x
Market cap (in €mm) 42.766,7
Net debt/(cash) 31.421,0
Minorities 20.116,6
Others (2.198,0)
Firm value (in €mm) 92.106,3
2004A 2005E 2006E
EBITDA (€ mm) 14.532,0 15.131,3 15.589,3
EV/EBITDA 6,3x 6,1x 5,9x
MINORITIES
Participation To do: adjust: Equity Income
Listed Participation % hold % no holdMarket Cap Value in
TIM 56% 44% 43.604 19.128
TI Media 62% 38% 1.056 396
Ente Chile 55% 45% 1.310 593
xxx
Sub-total 20.117
Discount 0%
Sub-total (a) 20.117
4. MULTIPLES IN PRACTICE
dealing with minorities
Minority interests should be added to net debt and calculated at market value
24. COMPARABLES METHOD
EQUITY VALUE
NET FINANCIAL
POSITION
MINORITIES
ADJ. NFP
EXAMPLE: TELECOM ITALIA 16/11/2004
Market data Share B Share A
Stock price (Last) as of : I:TIT 2,18 2,95
12 months high 2,18 2,98
12 months low 1,62 2,34
Number of shares Issued (mm) 5.795,9 10.315,3
Treasury Shares (101,2)
Shares issue from Options (Treasury Method) na
Fully diluted number of shares (mm) 5.795,9 10.214,1
Market cap (in €mm) 42.766,7
Net debt + minorities + other 49.339,6
Firm value (in €mm) 92.106,3
Capitalised Leases na
Adjusted Firm value (in €mm) 92.106
Balance sheet elements as at 31/09/2004
Financial debt (incl. Financial Lease) 31.421,0
Cash
Net debt/(cash) 31.421,0
Minorities 20.116,6
Net debt/(cash) + Minorities 51.537,6
Underfunded Pension Plan na
Equity Method - Participations (2.198,0)
Preferred na
Net Debt + Minorities+ Other 49.339,6
Capitalised Leases na
Shareholders equity group share 14.730,0
Net debt / Market Value 73,5%
4. MULTIPLES IN PRACTICE
an example
25. – The economic-financial variables of the companies in the sample must be
consistent with the economic-financial data of the company that you intend to
evaluate.
– Reconciliation of the historical/forecasted data:
• Restatement of the
Income Statement
with an adequate
level of detail…
• Time horizon
coherence
• Normalization
• Consistency between
numerator and denominator
• Different accounting standards
• Homogeneous time horizon
• Adjust. for exceptional events
(extraordinary items,
restructuring costs, goodwill,
accounting changes…)
4. MULTIPLES IN PRACTICE
consistency of the valuation
26. As Reported
EBIT 100
Restructuring
Charge
(50)
Pre tax Profit 50
Tax (33%) (17)
Net Income 33
Restated
EBIT 100
Pre tax Profit 100
Tax (33%) (33)
Net Income 67
4. MULTIPLES IN PRACTICE
exceptional non-recurring items - example
All exceptional items should be restated in order to normalize the result the
valuation will be based on.
27. General rule:
Use max, min, median and mean
formulas - exclude outliers
Projections based on research reports from investment banks
Share prices as of November 25, 2005
All multiples are calendarised to 31st Dec
Market Enterprise Enterprise Value as a Multiple of: EPS
Company Value Value Sales EBITDA Cash P/E 5-YR PEG
Name (EURm) (EURm) LTM 2005E 2006E LTM 2005E 2006E 2005E 2006E CAGR 2005E 2006E
Luxury/Fashion
Geox 2,374 2,357 5.27x 5.18x 4.09x 19.2x 19.2x 14.0x 32.8x 25.4x 18.0% 1.82x 1.41x
Bulgari 2,599 2,725 3.10 2.98 2.71 15.2 14.4 13.0 21.8 19.0 13.6 1.61 1.40
Richemont 18,858 18,480 2.80 2.73 2.48 14.8 14.7 12.6 23.2 18.9 9.5 2.44 1.98
LVMH 34,686 41,536 3.15 3.04 2.84 13.5 13.4 12.0 24.1 20.8 9.7 2.48 2.14
Tod's 1,614 1,562 3.19 3.14 2.76 14.5 13.9 11.7 29.5 23.8 12.7 2.33 1.88
Hermès 7,255 6,745 4.96 4.65 4.19 16.4 15.0 13.5 28.5 25.1 12.0 2.37 2.09
Tiffany & Co 5,441 5,676 2.89 2.76 2.53 13.7 13.5 12.0 26.2 23.6 13.0 2.02 1.82
Swatch Group 7,262 6,504 2.46 2.36 2.18 11.4 10.5 9.6 28.3 26.2 11.1 2.55 2.36
Burberry 3,026 2,778 2.63 2.60 2.47 9.9 10.3 9.5 19.5 16.8 11.0 1.78 1.53
Max 5.27x 5.18x 4.19x 19.2x 19.2x 14.0x 32.8x 26.2x 18.0% 2.55x 2.36x
Mean 3.38 3.27 2.92 14.3 13.9 12.0 26.0 22.2 12.3 2.15 1.85x
Median 3.10 2.98 2.71 14.5 13.9 12.0 26.2 23.6 12.0 2.33 1.88
Min 2.46 2.36 2.18 9.9 10.3 9.5 19.5 16.8 9.5 1.61 1.40
5. INTERPRETING RESULTS
key statistics
Source: Merrill Lynch
28. - Analyse company’s P/E in relation to earnings growth prospect
PE/G
P/E
LT Growth Rate=
- The higher the PEG is, the more you pay for growth
Company A: P/E = 25 growth 17% PEG: 1.47
Company B: P/E = 16 growth 10% PEG: 1.60
5. INTERPRETING RESULTS
adjusting for growth
The PEG tells you if your company is overvalued or (in other terms) if the market is
extremely confident in the expected growth rates implied in the current valuation.
29. The evidence reported in the Value Map analysis suggests undervaluation for
Swatch, Richemont and LVMH.
Source: FactSet and Reuters. Prices as of 21 September 2004
5. INTERPRETING RESULTS
comparison with peers in the luxury industry
VALUE MAP
The same analysis
can be developed
on the other
variables:
-EV/Sales vs
EBITDA margin
- EV/EBITDA vs
CAGR
- …
30. 1. Negative Earnings
- Loss-making
- Risk of bankruptcy
2. Absence of Historical Information
- Recent business transformation
- Recent IPO and privatization
3. Absence of comparable companies
Use DCF
Use DCF
Use DCF
Useful Hints
5. INTERPRETING RESULTS
Potential pitfalls of multiples valuation
31. Rationale
- Determine value of transaction
- Determine multiples compared to target’s financial performance and pre-
announcement market value
- Determine control premium of specific industries
Comparability
- Companies involved in transactions should have similar operating and financial
characteristics and be of similar size
- Recent transactions more accurate than transactions completed in the past
and mind that:
- Transactions are rarely directly comparable
- Transactions may include different synergy rationale
- Public data can be misleading or unavailable
- Acquisition multiples can vary widely
- No current P/E or multiple benchmark
5. INTERPRETING RESULTS
Comparable Transactions’ Multiples
32. – No specific rules to identify the right multiples It is up to the good
judgment of the analyst.
– Enterprise Value Multiples (in particular EV/EBITDA) are the most used
because not affected by capital structure and accounting policies.
– Time horizon choice
• Last year, current year, current year +1
• Historical average
– Main statistics:
• Average multiple
• Median multiple
• Not consider the highest and the lowest value (extreme values)
6. CONCLUSION
summing-up