What is the London International Financial Futures and Options Exchange (LIFFE)? The London International Financial Futures and Options Exchange (LIFFE) is a futures exchange located in London. Sir Brian Williamson established LIFFE on September 30, 1982 to take advantage of the UK’s removal of currency controls in 1979. Originally located in the historic Royal Exchange…
What are Fibonacci Numbers? Fibonacci Numbers are the numbers found in an integer sequence referred to as the Fibonacci sequence. The sequence is a series of numbers characterized by the fact that every number is the sum of the two numbers preceding it. The initial two numbers in the sequence are either 1 and 1, or…
What is the Nikkei Index? The Nikkei Index, also commonly referred to as the Nikkei 225, is the most recognized Japanese stock market index. It comprises Japan’s top 225 companies that are listed on the Tokyo Stock Exchange. The Nikkei Index is considered an important measure of the Japanese stock market and the performance of the…
What is Intrinsic Value? The intrinsic value of a business (or any investment security) is the present value of all expected future cash flows, discounted at the appropriate discount rate. Unlike relative forms of valuation that look at comparable companies, intrinsic valuation looks only at the inherent value of a business on its own. Another…
What is Net Present Value (NPV)? Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. NPV analysis is a form of intrinsic valuation and is used extensively across finance and accounting for determining the value of a business,…
What is the US to CAD Currency Cross? The USD/CAD currency pair represents the quoted rate for exchanging US to CAD, or, how many Canadian dollars one receives for every US dollar. For example, a USD/CAD rate of 1.25 means 1 US dollar is equivalent to 1.25 Canadian dollars – or conversely stated, that it…
Comparables Analysis One of the three major valuation methodologies employed by investment bankers is trading comparables analysis. In the world of corporate finance, there are two forms of valuation that are utilized in comparables analysis – relative valuation and fundamental valuation. Each method comes with its own advantages and disadvantages. With comparables analysis, we are assessing…
Valuation Analysis Template The valuation component is generally the most important piece of information for a company that is seeking to pursue an M&A transaction. Both parties in a potential deal perform a thorough valuation analysis to maximize their gains from the transaction. On the acquirer’s side, investment bankers will seek to sell their recommendations by…
Precedent Transactions Analysis Section Precedent Transactions Analysis is based on the premise that a company’s valuation can be assessed using the prices paid by acquirers of companies that are similar to the client company. The method is similar to the comparable company’s valuation method in that both are relative valuation methods whereby the target valuation…
