Introduction

There are as many models for valuing stocks and businesses as there are analysts doing valuations. While we often talk about the differences across valuation models, we seldom talk about what they share in common. In this workshop, we hope to emphasize the shared foundations of valuation approaches and how to bridge differences among them.

The first part of the workshop will cover the discounted cash flow valuation, and the estimation issues that come up when estimating discount rates, cash flows and expected growth. In addition, it will look at value enhancement through the prism of discounted cash flow models. The second part of the workshop will focus on what we term the loose ends in valuation and follow up by looking at “difficult-to-value” companies across the spectrum (life cycle, sectors). The third part of the workshop will examine relative valuation, i.e., the valuation of assets/businesses by looking at how similar assets/businesses are priced by the market.

Objective:

The objective of the workshop is to provide the fundamentals of each approach to valuation, together with limitations and caveats on the use of each, as well as extended examples of the application of each.

At the end of the workshop, participants should be able to –

  • Value any kind of firm in any market, using discounted cash flow models (small and large, private and public)
  • Value a firm using multiples and comparable firms
  • Analyze and critique the use of multiples in valuation
  • Value “problem” firms, such as financially troubled firms and start-up firms
  • Estimate the effect on value of restructuring a firm

Who should attend?

The mix of basic valuation techniques and applications provided in this workshop will appeal to a widely diverse audience. In particular, it will be useful for:

  • Equity research analysts, who are interested in examining alternatives to the multiples that they use or the linkage to discounted cash flow models
  • Corporate financial officers, who want to understand the details of valuation, either because they are planning acquisitions or are interested in value enhancement strategies for their firms
  • Analysts involved in mergers and acquisitions, who would like to acquire a wider repertoire of valuation skills
  • Portfolio Managers who are interested in the effects of corporate restructuring on firm value, and the implications for portfolio management
  • Anyone interested in valuation