Valuation Topics

Topics related to standalone valuation including fundamental valuation, relative valuation, sum-of-parts and other techniques


Last 10 posts

Free Cash Flow to Equity
Would increase in debt (refinancing) in a year increase free cash flow to equity in that year?
Go to post added 2 weeks ago
Seasonal Working Capital
How should a working capital target be chosen for a business that has seasonal net working capital (for example, every year a company must build up inventory and its suppliers do not take credit, or bonuses for employees are paid at the end of each fiscal year). From what I have seen, many practitio... Read More
Go to post added 5 months ago
FCFF - Unlevered Free Cash Flow
Hi, I took a class last time regarding corporate valuation and there was a discussion on calculating unlevered free cash flow, where we deduct capex (and we do not add borrowing for that year). What should we do if the company borrowed a huge amount of cash for capex that year? Should we really have... Read More
Go to post added 8 months ago
FCFF (Unlevered Free Cash Flow)
Hi, when calculating unlevered free Cash Flow, we are deducting capex from the cash flow of the company, but net borrowing is not added. What if the company borrowed money to finance the capex? so for valuation purposes, for that year, FCFF will be negative. Is there a way to correct for it? Thanks... Read More
Go to post added 8 months ago
Exit Transaction Fees & IRR/MOIC
When doing an LBO model, if you assume a certain amount of transaction fees the sponsor will have to pay at exit, should you account for these in the MOIC/IRR that you calculate in your LBO analysis?

Thanks for the help!
Go to post added 8 months ago
Beta Benchmark - Canada vs US
I've seen some beta benchmark questions here, but just to be explicit: if there is a mix of US and Canadian companies, do I benchmark the Canadian off of SPTSX or SPX? Thank you!
Go to post added 8 months ago
IPO Valuation
I am trying to value a company for an IPO (proceeds strictly used for expansion, not for the existing shareholders to exit), using DCF (on the FCFF). I have done financial forecast on the company, taking into account the improved performance after it receives new capital from the IPO. After I deriv... Read More
Go to post added 9 months ago
TEV and ¨significant¨Cap/Op Leases
Love the videos! Could you provide some additional clarity to the airline/truck/rail exception for calculation of TEV in the Op/Cap Lease context? I can think of many industries/companies, outside of the three exceptions given, that pay significant amounts (depending on your definition/thresholds) f... Read More
Go to post added 11 months ago
Ibbotson Equity Risk Premium
Understood in the class that Ibbotson's sheet on Equity Risk Premium (ERP) will be made available in the Forum, may I know how can I find it please? Thanks.
If whole sheet cannot be shared, may I know the latest ERP (2017) for Philippines please?
Go to post added 1 year ago
BS line item treatment for determining TEV
If a company lists restricted cash not for working capital purposes, but instead for covenants adherence, would you be allowed to subtract it in the TEV like normal cash? Also, what is the difference between Investment in Unconsolidated Affairs (asset side) versus minority interest (on the liability... Read More
Go to post added 1 year ago