fmva™ certification · 2020. 8. 23. · company analysis 04. precedent transactions 05....
TRANSCRIPT
FMVA™ Certification
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Business Valuation Modeling
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Table of Contents
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01.
Introduction to Valuation
02.
Equity Value vs Enterprise Value
03.
Comparable Company Analysis
04.
Precedent Transactions
05.
Discounted Cash Flow (DCF)
06.
Factors that Impact Valuation
07.
Interpretation & Presentations of Results
08.
Conclusion
Learning Objectives
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Learning objectives
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Understand the difference between equity and enterprise value and when to use each of them
Understand why comparable company analysis is performed, the pros & cons of it, and how to calculate the various ratios
Understand why precedent transaction analysis is performed, the pros & cons of it, and how to calculate the various ratios
Understand what discounted cash flow analysis is, how to calculate free cash flow, WACC and NPV
Understand various factors impacting valuation that cannot be discretely modeled
Understand how to effectively present the results of valuation analysis
CFI’s approach
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We design all our courses with the following objectives:
01.Teach you how finance professionals actually perform valuation
02.Give you a solid understanding of key concepts, methods, approaches
03.Guide you to perform world class financial analysis
04. Advance your career
Introduction to Business Valuation Concepts
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01.
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Sell a business Raise money IPO Impairment testing
Estate planning Bankruptcy
Acquire a business
Make investment recommendations
(buy/sell/hold)
Internal business decisions making
Valuing Employee
Options and Compensation
Litigation
Why perform valuation?
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Valuation is based on expected future performance not past performance and involves:
Valuation is an art and a science
An analysis of the financial history and prospects of the business, project or asset
Forecast the future operations of the business, project or asset
Analysis of the industry
Analysis of the economic environment
Applying acceptable valuation methods
There are various valuation methodologies which may arrive at differing values for a business, project or asset.
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Valuation is an art and a science
Science
01. Historical financials02. Ratios03. Assets04. Track record05. Statistical analysis
Art
01. Management team02. Culture and Strategy03. Forecasting04. “Moat”05. Competition06. Macroeconomic factors07. Cost of capital08. Game theory
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Overview of financial valuation techniques
Valuing a business or asset
Cost approach
Cost to build
Replacement cost
Market approach(relative value)
Public company comparables
Precedent transactions
Discounted cash flow (intrinsic value)
approach
Forecast future cash flows
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Overview of financial valuation techniques
$22.40
$24.81
$28.00
$36.00
$22.00
$49.21
$38.08$36.00
$44.00
$30.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
Comps Precedents DCF - base case DCF - blue sky 52 wk hi/lo
Valuation Summary - Equity Value per Share ($)Valuation Summary – Equity Value per Share ($)
Relative value techniques Intrinsic value techniques
Equity Value vs Enterprise Value
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02.
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Enterprise value vs. equity value
Assets
Market value of net debt
Market value of equity
Enterprise value
Debt investors
Shareholders
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House example
House
Debt $100k
Equity$400k
1
House
Debt $400k
Equity$100k
2
House
Debt $250k
Equity$250k
3
Question:
In each case what is the house worth?
Answer:
$500,000. The funding mix for the house is independent of the value of the house - this is what enterprise value reflects for companies.
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Terminology
Other names for Enterprise Value include…
Firm Value
Total Enterprise Value (TEV)
EV
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Terminology
Other names for Equity Value include…
Market Capitalization
Market Cap
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Net debt defined
Net debt defined ($M)
Short-term interest-bearing debt
Long-term interest-bearing debt
Gross debt
5,000
35,000
40,000
Less: cash and cash equivalents
Net debt
10,000
30,000
It’s assumed the cash can be netted against any debt owed.
Cash is not an operating asset that generates cash flow.
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Negative net debt (net cash)
Net debt defined ($M)
Short-term interest-bearing debt
Long-term interest-bearing debt
Gross debt
5,000
0
5,000
Less: cash and cash equivalents
Net debt
20,000
(15,000)
Net cash 15,000
Equity Value & Enterprise Value Multiples
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03.
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Valuation using Equity and EV multiples
Calculate and analyze valuation multiples
Appreciate the drivers of equity and enterprise value multiples
Value a company using
•Equity multiples•Enterprise value multiples
Enable you to:
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Relative valuation - multiples
The value of an asset is
derived from the pricing of
comparable assets
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Enterprise value vs. equity value
Assets
Market value of net debt
Market value of equity
100% of cash flow
25% of cash flow (paid first)
75% of cash flow (paid second)
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Enterprise value vs. equity value
Assets
Market value of net debt
Market value of equity
XYZ Inc. income statement
Sales
Operating expenses
EBITDA
Depreciation
EBIT
Interest
Earnings before tax
Tax
Net earnings
No of shares
Share price
1,000
(350)
650
(400)
250
(100)
150
(50)
100
100 million
20.00
Income Statement millions
Venders & Employees
Non-cash
Debt holders
Government
Shareholders
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Enterprise value vs. equity value
If the denominator is before
interest expense,
it’s an enterprise value ratio
EV/Revenue, EV/EBITDA, EV/EBIT
If the denominator is after
interest expense,
it’s an equity value ratio
P/E, P/B, P/CF
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XYZ Inc. financial statement extracts
XYZ Inc. balance sheet
Liabilities
Cash
Other current assets
PP&E
Total
0
250
800
1,050
Assets millions
Short-term debt
Other current liabilities
Long-term debt
Common stock
Retained earnings
Total equity
Total
50
100
250
250
400
650
1,050
XYZ Inc. income statement
Sales
Operating expenses
EBITDA
Depreciation
EBIT
Interest
Earnings before tax
Tax
Earnings after tax
Number of shares
Share price
1,000
(350)
650
(400)
250
(100)
150
(50)
100
100 million
20.00
Income Statement millions
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Calculating EV multiples
Question:
What is the enterprise value of XYZ Inc.?
Answer:
100m shares x 20.00 per share = 2,000m plus 300m in net debt = 2,300m
Question:
What are the implied EV to sales, EV to EBITDA, EV to EBIT, EV to capital employed and EV to free cash flow multiples?
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EV to sales multiple
Enterprise value to sales multiple
EVSales
Enterprise valueSales
2,300m1000m
2.3 times
EVSales
EVEBIT or EBITDA
EBIT or EBITDASales
2,300m650m
65% 2.3 times
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EV to EBITDA and EBIT multiples
EVEBIT
Enterprise valueEBIT
2,300m250m
9.2 times
Enterprise value to EBITDA & EBIT multiples
EVEBITDA
Enterprise valueEBITDA
2,300m650m
3.5 times
They are used more often than other EV multiples such as EV to sales or EV to Free Cash Flow
EV to EBIT and EV to EBITDA are prolifically used in valuation
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EV to capital employed multiple
Enterprise value to capital employed multiple
EV to capital employed is driven by return on capital employed
EVCE
Enterprise valueBV of debt + equity
2,300m950m
2.4 times
EVCE
EVEBIT or EBITDA
EBIT or EBITDACE
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Free cash flows to the firm
XYZ Inc. free cash flows to the firm
FCFF
EBIT (1 - t) + D&A - Change in WC - Capex
167 + 400 – 300 - 150
117
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EV to free cash flow multiple
Enterprise value to free cash flow multiple
EV/FCFFEnterprise value
Free cash flow to firm2,300m117m
19.7 times
Reconciling free cash flow to equity and to the firm:
Free cash flow to equity 50m
Add back interest 100m
Deduct tax shield on interest (33m)
Free cash flow to the firm 117m
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XYZ Inc. financial statement extracts
XYZ Inc. balance sheet
Liabilities
Cash
Other current assets
PP&E
Total
0
250
800
1,050
Assets millions
Short-term debt
Other current liabilities
Long-term debt
Common stock
Retained earnings
Total equity
Total
50
100
250
250
400
650
1,050
XYZ Inc. income statement
Sales
Operating expenses
EBITDA
Depreciation
EBIT
Interest
Earnings before tax
Tax
Earnings after tax
Number of shares
Share price
1,000
(350)
650
(400)
250
(100)
150
(50)
100
100 million
20.00
Income Statement millions
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Calculating equity multiples
Question:
What is the market capitalization of XYZ Inc.?
Answer:
100m shares x 20.00 per share = 2,000m
Question:
What are the implied price to earnings, price to book and price to cash flow multiples?
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Price to earnings multiple
Price to earnings multiples are driven by:
P/Emultiple
Market capitalizationNet earnings
2,000m100m
20 times
Growth prospects Shareholder risk Cash flow generation
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Price to earnings multiple
Normalized earnings multiples should reflect the on-going performance of the company.
Adjust for:
Non-recurring or exceptional items
Over- or under-depreciation
Profits/loss on sale of property
Significant provisions or asset write downs
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Price to earnings multiple
Cannot cope with negative earnings
Earnings can be manipulated
Problems with cyclical firms
• Trough of cycle - high P/E• Peak of cycle - low P/E
Problems with price to earnings:
Earnings can be volatile
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Price to book multiple
The book value of equity is the total common shareholders’ equity excluding preference shares and minority interest.
Price to book multiples are driven by:
Return on equity (earnings / book value of equity)
PE drivers:• Growth prospects• Shareholder risk• Cash flow generation
P/Bmultiple
Market capitalizationBook value of equity
2,000m650m
3.1 times
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Free cash flow to equity
Free cash flows are used to determine how much cash a company has left after satisfying its sustainable obligations.
FCFECash flows from operations –
capital expenditures
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XYZ Inc. example – free cash flow to equity
EBIT
Depreciation
EBITDA
Working capital
Operating cash flow
250
400
650
(150)
500
XYZ Inc. free cash flow to equity (millions)
Interest
Taxes
Cash flow pre-investment
(100)
(50)
350
Capital expenditure
Free cash flow to equity
(300)
50
• Accounts Receivable• Inventory• Accounts Payable
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Price to free cash flow multiple
Price to free cash flow multiples are driven by:
Cash conversion (earnings / free cash flows)
PE drivers:• Growth prospects• Shareholder risk• Cash flow generation
P/FCFmultiple
Market capitalizationFree cash flow
2,000m50m
40 times
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The firm life cycle and choosing multiples
Inception
Sales
Cash flow
Profit
Early signgrowth
Rapidgrowth
Slowinggrowth
Earlymaturity
Latematurity
Decline
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When is a multiple appropriate?
Multiple Characteristics Life cycle stage
EV to sales
• No cash or profit
• Pattern of sales clear
• Ignores operating economics
• Ignores capital structure
• Early sign growth
• Rapid growth
EV to EBITDA
• Operating cash flow positive
• Incorporates profitability
• Ignores capital structure
• Ignores tax differences
• Rapid growth
• Slowing growth
EV to EBIT• Operating profit
• Ignores capital structure
• Ignores tax differences
• Slowing growth
• Maturity
Price to earnings• Stable operating economics
• Stable capital structure
• Profit and cash flow similar
• Early maturity
• Late maturity
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Summary
The most commonly used equity values multiples are Price to Earnings, Price to Book and Price to Cash Flow
The most commonly used enterprise value multiples are EV to EBIT, EV to EBITDA, EV to sales, EV to capital employed and EV to free cash flow
The relevance of different valuation multiples changes over time as business models evolve
The key messages from this session are:
Free cash flows to the firm are cash flows generated by the business and exclude financing costs such as interest
Comparable Company Analysis
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04.
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Overview of financial valuation techniques
Valuing a business or asset
Cost approach
Cost to build
Replacement cost
Market approach(relative value)
Public company comparables
Precedent transactions
Discounted cash flow (intrinsic value)
approach
Forecast future cash flows
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Why comparable analysis
Pros:
01. If investors are willing to pay X for our competitors… they must be willing to pay Y for us
02. Observable value for a company (what investors are actually paying for the business right now!)
03. Readily available
04. Current
05. Large number of potential companies to compare to
Cons:
01. No perfect comparable
02. Hard to adjust for growth, management team, or other factors
03. Easy to fall into “value trap” or “overvalued fallacy” (due to above)
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What metrics are used?
Industry specific
General examples:
01. EV/Sales
02. EV/EBITDA
03. EV/EBIT
Lifecycle specific
04. P/E
05. P/B
06. P/CF
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Example
Market Data Financial Data (FY+1) Valuation (FY+1)
Price Shares Market Cap Net Debt EV Sales EBITDA Earnings EV/Sales EV/EBITDA P/E
Company name ($/share) (M) ($M) ($M) ($M) ($M) ($M) X X X
Micro Partners $9.45 100 $945 $125 $1,070 $268 $76 $47 4.0x 14.1x 20.1x
Junior Enterprises $5.68 1,250 $7,100 $2,00 $9,100 $4,136 $778 $412 2.2x 11.7x 17.2x
Minature Company $18.11 50 $906 $25 $931 $443 $96 $56 2.1x 9.7x 16.3x
Average Limited $12.27 630 $7,730 $350 $8,080 $1,949 $528 $294 4.1x 15.3x 26.3x
Bohemeth Industries $9.03 1,500 $13,545 $0 $13,545 $6,622 $795 $423 2.0x 17.0x 32.0x
Average 2.9x 13.6x 22.4x
Median 2.2x 14.1x 20.1x
How to perform comparable company analysis
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Use Bloomberg / Capital IQ / Equity Research Reports / Google Finance / Yahoo finance / Hoovers to find comps
01.Go to EDGAR / SEDAR / Company website
02.Download 3-5 years of historical data
• Revenue, Gross profit, EBITDA, EBIT, net income
• Shares outstanding, share prices, cash, debt, minority interest
03.
Obtain forecast metrics from Equity Research / Bloomberg / Company Guidance / Google Finance
• Revenue, Gross profit, EBTIDA, EBIT, net income
04.Build a table and calculate Market Cap, EV, all ratios, growth rates, margins, etc.
05.Compare the adjusted average to the company you are trying to value
06.
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Multiples valuation requires an in-depth understanding of the company being valued and its peers. The relative valuation is only useful if the companies are a comparable peer group. We need to consider companies that have similar:
How - Selecting a comparable universe
Business activities Geographical location Size and growth profiles
Profitability profiles Accounting policies Similar capital structures
Precedent Transaction Analysis
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05.
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Overview of financial valuation techniques
Valuing a business or asset
Cost approach
Cost to build
Replacement cost
Market approach(relative value)
Public company comparables
Precedent transactions
Discounted cash flow (intrinsic value)
approach
Forecast future cash flows
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Why M&A precedent transactions?
Pros:
01. Shows the value investors paid for the entire company (not just one share)
02. Includes takeover premium / control premium
03. Includes synergy value
Cons:
01. Hard to find (few transactions)
02. Need access to a database like Bloomberg, Capital IQ
03. Become stale dated quickly (valuations from years ago are not relevant today)
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What metrics are used?
Industry specific
General examples:
01. EV/Sales
02. EV/EBITDA
03. EV/EBIT
Lifecycle specific
04. P/E
05. P/B
06. P/CF
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Example
Valuation
Date Target Transaction Value ($M) Buyers Ev/Sales EV/EBITDA EV/EBIT
01/24/2017 Current Ltd 2,350 Average Limited 1.9x 9.4x 11.2x
04/19/2016 Recent lnc 6,500 Bohemeth Group 1.4x 8.0x 12.6x
04/19/2014 Past Co 2,150 Other Group 1.3x 8.7x 12.1x
11/07/2014 Historical LLP 450 Junior Enterprises 2.3x 11.1x 13.6x
11/01/2012 Old Group 325 Minature Company 5.1x 18.8x 21.5x
11/07/2011 Dated Enterprises 150 Micro Partners 2.1x 9.3x 13.2x
Average 2.3x 10.9x 14.0x
Median 2.0x 9.4x 12.9x
How to perform precedent M&A transaction analysis
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Use Bloomberg / Capital IQ / Equity Research Reports / Google Finance to find past transactions
01.Find press release for each transaction
02.Obtain relevant data from press release (may be very limited)
• Price paid• Form of consideration (cash /
shares)• Takeover premium (implied or
explicit)• Synergies announced (if available)• Another other terms/conditions
interesting to note
03.
Build a table and calculate ratios paid at the time, where possible
04.Compare the adjusted averageto the company you are trying to value
05.
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We need to consider companies that have similar:
How - Selecting relevant transactions
Business activities Geographical location Type of transaction/buyer
Size and growth profiles Recent time period
Intrinsic Valuation –Discounted Cash Flow (DCF)
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06.
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Overview of financial valuation techniques
Valuing a business or asset
Cost approach
Cost to build
Replacement cost
Market approach(relative value)
Public company comparables
Precedent transactions
Discounted cash flow (intrinsic value)
approach
Forecast future cash flows
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DCF valuation techniques
Value a business using a two-stage DCF valuation model
Calculate free cash flows to the firm and to equity
Outline the main drivers of free cash flows
Identify what discount rate to use
A four-step approach
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01.Gather critical information about the company
02.Undertake a comprehensive company analysis
03.Determine the key assumptions that will drive your valuation
04. Build your valuation model from scratch
Step 1
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01.Gather critical information about the company
At a minimum you should:
Review the latest annual report in detail
01.Listen to the most recent quarterly earnings webcast / conference call
02.Review available sell side research
03.Review research on the industry
04.
The public information book
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Question:
What is in a public information book (PIB)?
News releases – last 6-12 months
01.SEC Filings – 10Q, 10K, non-financial (ownership changes, key events) last 3-5 years
• Familiarize yourself with the various SEC Filings (e.g. proxy, 8k, 13D)
02.Research – industry, comps and your client (especially your own bank’s research)
03.
Corporate / investor presentations – industry conferences, investor calls (e.g. quarterly conference calls)
04.Credit ratings – 2 to 3 rating agency reports
05.Conference call transcripts – pay particular attention to the Q&A by analysts
06.
Step 2
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02.Undertake a comprehensive company analysis
At a minimum you should undertake:
A thorough assessment and critique of a company’s stated strategy supported by evidence
01.An assessment of the management team and its ability to deliver against its stated strategy
02.A robust review of a company’s financial statements
03.
A detailed and quantified assessment of a company’s competitive advantages / disadvantages
04.An assessment of industry dynamics within the industry as well as general economic and demographic trends
05.
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Assessing future sustainable cash flows requires an analysis of the company, industry, and external environment.
Valuation starts with…
Company
ExternalEnvironment
Industry
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PEST analysis is a useful framework for analyzing the external environment.
Tools for analyzing the external environment
Political forecasting
Economic forecasting
Technological forecasting
Social forecasting
Identifyopportunities and
threatsAnticipate React
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Porter’s 5 forces is a powerful tool for assessing industry attractiveness. Michael Porter identified FIVE forces driving industry competition:
Tools for analyzing industry dynamics
Potential new entrants and barriers
to entry
Rivalry amongstfirms in industry
Suppliers and their bargaining power
Threat of substitutes
Buyers and their bargaining power
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Michael Porter identified the following strategies for gaining competitive advantage in an industry.
Tools for assessing competitive advantage
2. Differentiation
1. Cost
Leadership
3b. Differentiation
Focus
3a. Cost Focus
Co
mp
eti
tiv
e s
cop
e
Bro
ad
ta
rget
Na
rro
w t
arg
et
Competitive advantage
Lower cost Differentiation
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Tools for assessing the business lifecycle
Time (years)
Cash
Life cycleextension
Sales
$
Profit
Launch Growth Shake-Out
Maturity Decline
Problem child Rising star Cash cow Dog
Tools for assessing management
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Question:
When assessing a management team’s character, which particular aspects / traits should you consider?
Past performance – What does their track record look like?
01.Reputation – What do the press, customers, suppliers, and the competition say about management?
02.Planning – Is there a clear and consistent business strategy? What is management’s approach to growth?
03.
Experience/stability –Qualifications, business and financial acumen, time in business, etc.
04.Attitude towards risk –Have risks been identified? Are there mitigation strategies in place?
05.
Putting it all together - SWOT
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Strengths Weaknesses
Internal factors which already exist and have contributed to the current position and maycontinue to exist.
Opportunities Threats
External factors which are contingent events. Assess their importance based on the likelihood of them happening and their impact on the company. Also consider whether management
have the intention and ability to take advantage of the opportunity/avoid the threat.
Step 3
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03.Determine the key assumptions that will drive your valuation
From your analysis to date, determine the key assumptions that will drive your valuation. In particular, you must determine what will drive the following:
Revenues
01.Gross margins
02.EBIT(DA) margins
03.
Working capital
04.Capital expenditure
05.Capital structure (debt versus equity)
06.
Step 4
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04.Build your valuation model from scratch
Company value
Value of the future cash flows generated by the company discounted at the required rate of return demanded by the investors
Two stage DCF valuation model
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Value of the firm
Cash flows for forecastable period
Terminal value
1 2
The two-stage approach to DCF valuations is a common solution to the problem of how we forecast the cash flow of a company because of issues of uncertainty:
We do not know how long the company will exist and hence how many years to include in our cash flow forecast
Forecasting is estimation. The further we predict into the future, the more prone to error our estimates become.
Free cash flows to the firm
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Free cash flows to the firm are the cash flows available to all funding providers (debt holders, preferred stock holders, common stock holders, convertible holders, etc.)
EBIT
(1 – Tax Rate)
Depreciation and Amortization
Changes in Working Capital(Deduct net increase in working capital)
Capital Expenditure
Free Cash Flows to the Firm
Forecasting free cash flows
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Forecast Drivers
• Market size
• Sales mix
• Volume/price
• Materials price
• Staffing levels
• Wage rates
• Tax effective structures
• A/R, Inventory, A/P
• Terms• Plant life
• Maintenance
• Scale
Revenue
Operating margin
Taxes
Workingcapital
Capital expenditures
EBIT x (1 – T)(NOPAT)
Total capital
Free cash flow
Weighted Average Cost of Capital (WACC)
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07.
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Estimating the cost of capital
Assets
Equity
Debt
What is the cost of equity?
What is the cost of debt?
The discount rate used in DCF valuations is based on the cost of capital.
There are two main sources of capital funding – debt funding and equity funding.
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Calculating the WACC
Weighted average cost of capital
Cost of equity
Cost of debt
Equity risk premium
Beta
Risk free rate
Average yield on debt
Tax shield
Cost of debt (after-tax)
Cost of equity
Weighted average cost of
capital
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Factors affecting cost of equity
Beta
01. Market risk02. Interest rates03. Business/economic cycle04. Inflation 05. Political/legislation06. Socio-economic
Alpha
01. Firm-specific risk02. Management03. Profits 04. Operations 05. Projects06. Products
Question:
What factors affect share prices?
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CAPM risk / reward model
Re
turn
%
Risk (market)
Riskfree rate
Beta of the market = 1
Risk free rate is normally taken as the yield on a long-term government bond in the country where the project/company is based.
Risk premium between 3% and 9%
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Beta is the slope of the line of best fit
Beta can be understood as the slope (gradient) of the line of best fit.
x
x
xx
x
x
xx xx
x
x
x
x
x
x
xMarket (% change)
Share (% change)
Beta = slope of the line
-
-
+
+
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The weighted average cost of capital (WACC)
WACC Ke
EquityDebt + Equity
Kd
DebtDebt + Equity
Where
Ke = Cost of equity = RFR + (Beta x MRP)
Equity = Market value of equity
Debt = Market value of debt
Kd = After tax cost of debt
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CAPM cost of equity example
Internet Co CAPM calculation
You have been provided with the following information for Internet Co:
Risk free rate
5.0%Equity market premium
4.0%Beta
2.38
Calculate the equity return required by Internet Co. shareholders
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CAPM example solution
Internet Co. CAPM calculation
Return required by shareholder
Risk free + (β x Equity market premium)
5.0% + (2.38 x 4.0%)
5.0% + 9.52%
14.52%
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WACC example
Consider the following information for Brick and Mortar Co:
Cost of debt
10%Cost of equity
15%Tax rate
30%Market value of debt
10mMarket value of equity
40m
Question:
What is the WACC of Brick and Mortar Co?
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WACC example solution
WACC(80.0% x 15.0%) + (20.0% x 7.0%)
12.0% + 1.4%
13.4%
15.0% + 10.0% (1 – 30.0%)40
40 + 10
10
40 + 10
Analysis and Presentation
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08.
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Overview of financial valuation techniques
Valuing a business or asset
Cost approach
Cost to build
Replacement cost
Market approach(relative value)
Public company comparables
Precedent transactions
Discounted cash flow (intrinsic value)
approach
Forecast future cash flows
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Overview of financial valuation techniques
$22.40
$24.81
$28.00
$36.00
$22.00
$49.21
$38.08$36.00
$44.00
$30.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
Comps Precedents DCF - base case DCF - blue sky 52 wk hi/lo
Valuation Summary - Equity Value per Share ($)Valuation Summary – Equity Value per Share ($)
Relative value techniques Intrinsic value techniques
Conclusion
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09.
Recap of learning objectives
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Understand the difference between equity and enterprise value and when to use each of them
Understand why comparable company analysis is performed, the pros & cons of it, and how to calculate the various ratios
Understand why precedent transaction analysis is performed, the pros & cons of it, and how to calculate the various ratios
Understand what discounted cash flow analysis is, how to calculate free cash flow, WACC and NPV
Understand various factors impacting valuation that cannot be discretely modeled
Understand how to effectively present the results of valuation analysis