Index

• Investment Banking M&A Research

• Equity Research
• Valuations
• Projections Required
• Valuation Techniques & Models
• DCF Valuations
• DDM
• FCFF
• FCFE
• Relative Valuation
• Price Multiples
• Enterprise Value
• EV Multiples
• Conclude

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Investment Banking M&A Research

• Valuation and modeling
• Benchmarking
• Capital markets analysis
• Capital structure analysis
• Comparable company analysis
• Financial modeling including full DCF modeling

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Equity Research
• Comparable company analysis
• Competitive advantage analysis
• Discounted Cash Flow (DCF) models
• Earnings forecasts
• Financial statement sensitivity modeling
• Model building and maintenance
• Segment analysis
• Weighted Average Cost of Capital (WACC)
analysis

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Valuations
1. Finding out the value of a company (EV)
• Mergers & Acquisition
2. Finding out the value of Equity (Stock)
• Recommendation to Buy/Hold/Sell
3. Finding out the value of Debt ( Bond)
• Profitability of investment

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Projections Required
• Growth Rates for Revenue of the company
• Expenses
• WACC
• Beta
• Other Components of BS & IS

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Valuation Technique & Models

1. DCF
• DDM
• FCFF
• FCFE
2. Relative
• Price Multiples
• Enterprise Value Multiples
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DCF Valuation
• Dividend Discount Model
• Free Cash Flow to Firm (FCFF)
• Free Cash Flow to Equity (FCFE)

• It is a technique which requires projecting

dividends (DDM), free cash flows available to
equity shareholders (FCFE) & free cash flows
available to the entire firm (FCFF) & discounting
it using respective discount factors.
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Dividend Discount Model

Div1/(1+Ko)1+Div2/(1+Ko)2+Div3/
(1+Ko)3+Div4/(1+Ko)4+….Divn/(1+Ko)n

• Projecting future dividend and discounting

it using WACC
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FCFF
EBIT(1-T)
Add: Depreciation
Less: Capex
Less: Change in Non Cash WC

Discounting Factor: Ko(WACC)

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FCFE
Net Profit
Add: Depreciation
Less: Change in NCWC
Less: Capex
Less: Net Debt

Discounting Factor: Ke (Cost of Equity)

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Relative Valuation
• Price Multiples
• Enterprise Multiples

• It is a technique in which peer

set is formed and based on it the
respective multiples are
compared to determine the value
(overvalue & undervalue ).
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Price Multiples
• PE Multiple
• PEG Multiple
• PES Multiple
• PBV Multiple
• POCF Multiple
• PS Multiple

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Enterprise Value
EV=
Market Capitalization
Add: Debt (all interest bearing)
Less: Cash

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Enterprise Multiples
• EV/Sales
• EV/EBITDA
• EV/EBIT
• EV/EBITDAR
• EV/EBITDARM

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Thank You
The house is open for Q & A and Discussions

“Commitment & Focus determines Success, but

to have these both the Faith & Blessings of
Almighty is required.
So have faith & be patient ”

Presented by:
Inder Preet Singh
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