Finance Foundations: Business Valuation

Learn how to value a business using different valuation methods, such as multiples, earnings ratios, and discounted cash-flow analysis.

Introduction

• Understanding and using business valuations

1. Calculating Business Valuations

• Why business valuation matters
• Basic appraisal concepts
• Market approach to business valuation
• Cost approach to business valuation
• Income approach and the time value of money

2. Price Multiples

• Microsoft IPO and the valuation process
• Valuation of a home
• Earning multiples
• Equity multiples
• Sales multiples
• WhatsApp acquisition and using other multiples
• Use price-to-sales ratio to value foreign companies

3. Discounted Cash Flow Analysis

• Use discounted cash flow on a car purchase
• Cash flows, timing, and risk
• Risk and interest rates
• Cash flow forecasts
• Use discounted cash flow analysis to determine a company's value

4. Case Study: Valuing McDonald's

• McDonald's history and facts
• McDonald's numbers
• Dividend-based valuation
• Earnings and equity multiples
• Discounted cash flow valuation
• Compare the valuation models

Conclusion

• Final advice on using business valuation techniques