What are the main valuation methods? When valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent transactions. These are the most common methods used in in investment banking, equity research, private equity, corporate development, MBOs and most areas of finance. Method 1: DCF Analysis In...
What is comparable company analysis? Comparable company analysis (or “comps” for short) is a valuation methodology that looks at ratios of similar public companies and uses them to derive the value of another business. Comps is a relative form of valuation, unlike a discounted cash flow (DCF) analysis, which is an intrinsic form of valuation....
Overview of the M&A process The mergers and acquisitions (M&A) process has many steps and can often take anywhere from 6 months to several years to complete. In this guide, we’ll outline the acquisition process from start to finish, describe the various types of acquirers (strategic vs. financial buys), discuss the importance of synergies (hard...
What’s included an a due diligence report? This article is an example due diligence (DD) report to be completed with a merger or acquisitions. The report is often sent as an internal memo to members of the executive team who are evaluating the transaction. Corporate Records State of incorporation and in good standing with the...
What is an investment banking pitchbook? An investment banking pitch book is a PowerPoint presentation designed to win new business. The “pitch” is typically an explanation of why the bank in question is best suited to lead the transaction, and why they should be engaged by the client. There are various types of pitches, and...
What is Enterprise Value? Enterprise Value (EV) is a measure of a company’s total value. It looks at the entire market value rather than just the equity value, so all ownership interests and assets claims from both debt and equity are included. EV can be thought of as the effective cost of buying a company...