valuation

Tag: valuation

Planning Your Exit Strategy

When you start a company, you should generally know how you are going to exit the company. It could be a merger or acquisition, leave it to family, an initial public offering (IPO), a management buyout, etc.. Whatever the case, planning your exit strategy is almost as important as running your company because it’s the

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Book Value of Equity Per Share (BVPS)

See also: Price to Book Value Analysis Price to Sales Ratio Analysis Book Value of Equity Per Share (BVPS) Definition Book Value of Equity per Share (BVPS) is a way to calculate the ratio of a company’s Stakeholder equity (as stated in the balance sheet) to the number of shares outstanding. Investors commonly use BVPS

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Free Cash Flow Definition

See also: Discounted Cash Flow Analysis Valuation Methods Free Cash Flow Analysis Free Cash Flow Definition The business is like a human body, the body needs blood, the business needs cash. Investor look at Free Cash Flow to make their decision for investment. Interestingly, it’s not a number you can come up easily. First, let’s look

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Why Valuation Matters

The other day, a client asked why valuation matters. It seems like a lengthy process that is complex and differs in each case. You see, I didn’t respond in an elaborate explanation of the different methods of valuation. Instead, I start off by saying that life is very unpredictable. Have you ever experienced a life-altering

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What is your business worth?

So, you’re considering selling your business… Whether it’s to pursue new opportunities or to get out while you can, you need to start thinking about your business from a valuation standpoint. Even if you don’t intend to sell your business in the near future, building a business to be sellable is a sound strategy. So,

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Business Valuation Purposes

See Also: EBITDA Valuation Valuation Methods Multiple of Earnings Business valuation is the process of determining the economic value of a business or company. It assesses a variety of factors to determine the fair market value in a sale, but there is no one way to verify the worth of a company. Business valuation can

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Multiple of Earnings

See Also: Normalized Earnings Adjusted EBITDA EBITDA Definition Valuation Methods Business Valuation Purposes EBITDA Valuation Multiple of Earnings Multiple of earnings is one way to value a business. It involves multiplying a company’s profits by a certain number to end up with a value. “Multiple of earnings” multiplies the “earnings” (or income or profit) of a year,

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What is a Term Sheet?

See Also: Other Peoples Money Angel Investor Venture Capital 5 Cs of Credit Working Capital What is a Term Sheet? What is a term sheet? It contains the terms of an investment made by a venture capital firm. It is a summary of the legal and financial terms of a proposed deal. Basically it is a

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Valuation Methods

See Also: Financial Ratios Required Rate of Return Internal Rate of Return Method EBITDA Valuation What is a Term Sheet? Adjusted EBITDA Multiple of Earnings Business Valuation Purposes Valuation Methods There are a variety of approaches to valuing a firm and its equity. Two of the most popular approaches are discounted cash flow (DCF) methods

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Present Value (PV)

See Also: Future Value Adjusted Present Value (APV) Net Present Value Method Investment Analysis Discount Rate Present Value (PV) Definition The present value is simply the value of future dollars or currency in present day terms. The present value is simply answering the question how much a dollar in the future is worth today. Present

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Adjusted Present Value (APV) Method of Valuation

See Also: Valuation Methods Net Present Value Method Internal Rate of Return Method NPV vs IRR Capitalization Adjusted Present Value (APV) Method of Valuation is the net present value of a project if financed solely by equity (present value of un-leveraged cash flows) plus the present value of all the benefits of financing. Use this

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NPV vs IRR

See also: Net Present Value Method NPV Versus Payback Method Internal Rate of Return Method Capital Budgeting Methods Discount Rate Weighted Average Cost of Capital Discounted Cash Flow versus Internal Rate of Return (dcf vs irr) NPV vs IRR Key differences between the most popular methods, NPV vs IRR (the Net Present Value Method and Internal Rate

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