Valuation Methods

Name: Valuation Methods
Author: Toiya Witherspoon

These lessons explore the different valuation methods and discuss how to apply them when performing a business valuation. First, they cover asset-based, stock…

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Course: On-Demand

Let's go over how to apply certain valuation methods and how these methods can resolve specific issues. The valuation methods covered include asset-based, stock price-based, and discounted cash flow. Valuation methods are chosen based on what an organization needs. Let's say someone wanted to buy your business. How can you negotiate the sale of your business if you don't know how to determine what it's worth? If owners or executives need help in determining their company's value, they can form an internal team or hire a business valuation firm to help. The person responsible needs to be well-versed in the different valuation methods and know enough about the business to make an accurate recommendation. That's because there's more than one right formula for valuing a business and what's best for a given company depends on several factors. The first one is the history of your business. If your business is relatively new, then your method might differ from a company that's been in business for over a decade. Another key factor is the size of your business. Whether you have a small business or are part of a large corporation, the most common valuation methods include comparable firms, asset-based, or earning and market value. It's important to research each method carefully to understand which one is most applicable to your business. Before embarking on the valuation process, your organization must be prepared, your financials need to be accurate and up to date. For example, if any renovations are currently in progress, your company should finalize them prior to evaluation as any such improvements can increase the value. Completing our projects and updating financials helps ensure that your organization receives the most comprehensive business valuation. The higher the end valuation, the better the offers you'll receive if you're selling. Or if you're looking to raise capital, the more attractive your business will be to financial institutions and investors. Not having detailed records and following the wrong methodology may lead you to accept an offer that undervalues your business or to miss a loan or investment opportunity.

Beginner Provider : Toiya Witherspoon 8 Lessons · 15m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

These lessons explore the different valuation methods and discuss how to apply them when performing a business valuation. First, they cover asset-based, stock price-based, and discounted cash flow. They also discuss comparable firms and the weighted average cost of capital or WACC.

What You'll Learn

Contrast multiple business valuation methods and compare when to apply each
Apply cash-flow and asset-flow valuation methods to a business valuation
Perform a discounted cash flow (DCF) valuation
Value a business using comparable firms (comps) and stock price-based methods
Calculate the weighted average cost of capital (WACC)
Distinguish earning value from market value using asset-based and other valuation approaches

Key Takeaways

The course explores different valuation methods and how to apply them when performing a business valuation.
It covers asset-based, stock price-based, and discounted cash flow valuation approaches.
It discusses comparable firms (comps) and the weighted average cost of capital (WACC).
Lessons also address earning value versus market value and other valuation methods.

Frequently Asked Questions

What valuation methods does this course cover?

It covers asset-based, stock price-based, and discounted cash flow (DCF) methods, along with comparable firms (comps) and the weighted average cost of capital (WACC).

What will I be able to do after taking this course?

You will be able to contrast multiple valuation methods and identify how to use cash and asset-flow valuation methods.

Does the course explain the weighted average cost of capital?

Yes. It includes a dedicated lesson on the weighted average cost of capital (WACC).

What lessons are included in this course?

Lessons include Using Valuation Methods, Comparable Firms (Comps), Asset-Based, Stock Price-Based, Earning Value and Market Value, Discounted Cash Flow (DCF), Weighted Average Cost of Capital (WACC), and Other Valuation Methods.