VALUATION CHEAT SHEET by

Bojan
Radojicic

Choose Perform Consider

PROCESS
Define the Adjsut Determine Appply Sensitivity
Gather info valuation financial additional
prupose financials discount rate mehtodology analysis
method analysis factors

PURPOSE
Discount rate
Selling business 3 VALUATION APPROACHES
Buying business
The discount rate is the minimum
Fundraising
rate of return acceptable to the
Litigations
Financial reporting requirements Income Market Cost investor.
Capital gain tax base calculation
Internal decision making approach approach approach The absolute value of the
discount rate depends on the
Divorce reasons
definition of the discount rate.
Partnerships restructuring
Namely, for cash flow after debt
This approach servicing, a simple discount rate is
This approach is based assumes that the This approach is based
on the principle that used, while for cash flow before
on the idea that the value of a company is
the value of a debt servicing, a weighted
value of a company is closely related to the
DCF Essentials directly related to its prices of comparable company is equal to average cost of capital (WACC) is
used.
ability to generate companies in the the sum of its assets
income. market. (equipment, cash,
receivables), less the
1. Sales & Growth This approach is sum of its liabilities WACC
The market approach
2. Expenses useful for valuing considers the actual (payables, loans).
companies that have a market transactions
3. CAPEX predictable income and market data of The asset-based Risk-free rate

stream and a long- comparable approach is useful for Equity risk premium

4. Financing term history of companies, such as valuing companies Relevered industry beta
Sub-total
earnings. that have significant
5. Working capital their stock prices,
sales, earnings, tangible assets, such
Specific risk premium
Cost of equity

6. Terminal value dividends, and other as real estate

companies
Industry - database
Cost of debt
financial metrics.
7. Discount rate Corporate tax rate
Cost of Debt after tax

8. Long term
(ND / EV)
WACC
Local inflation

growth rate METHODOLOGY

WACC result

1. Discounted cash flow method 1. Valuation by multiple method 1. Net book value method

2. Capitalization of earnings method 2. Economic Value Added (EVA) method 2. Replacement cost method

3. Excess Earnings Method 3. Market price method 3. Reproduction cost method

4. Adjusted Present Value (APV) Method 4. Comparable companies method

5. Relief from royalty method 5. Comparable transaction method

Cash flows calculation before

and after debt service 6 Types of Valuation Multiples

1. Price-to-Earnings (P/E) Ratio

2. Price-to-Sales (P/S) Ratio
3. Price-to-Book (P/B) Ratio
4. Enterprise Value-to-EBITDA Ratio
5. Price-to-Cash Flow (P/CF) Ratio
6. Dividend Yield

What can be subject of valuation?

Database
Database Customer
Customer list
list Busineness
Businesses Intengibles
Intangibles Real
Real Estate
Estate Brand
Brand Technology Software

CREDITS TO Bojan Radojicic | FOLLOW ON LINKEDIN POWERED BY: WTS TAX AN FINANCE AND