RB内部估值模型教程PPT307页

1、document number1contentexecutive summary 执行摘要执行摘要a.introduction to valuation b.discount cash flow (dcf)b1. cash flow b2. discount rate and wacc（ weighted average cost of capital的缩写。wacc代表公司整体平均资金成本，可用来衡量一个项目是否值得投资；项目的回报必须不低于wacc）b3. terminal value 终值b4. common dcf q&ac.comparablec1. comparable m

2、ethodologyc2. listed peer comparablec3. transaction comparablee.real optionf.other valuation topicsf1. investment process and managementf2. data gatheringf3. define a relevant valuation rangef4. sensitivity analysisf5. industry specific valuation insightg.appendixdocument number2executive summarydoc

3、ument number3a.introduction to valuationdocument number4valuation tools will typically revolve around two types of methodologies : future cash flows and historical market pricesfinancial statements and analysts researchmacroeconomic and stock market datacompany valuedcf methoddiscounteddividendmetho

4、dcomparable companies methodasset-based methodsdifferentvaluation methodsmanagement judgmentreal option methodcomparable transactions methoddocument number5making a good valuation requires a good understanding of the targetthere is no black-box to make a valuation 没有暗箱没有暗箱操作做出报价操作做出报价valuation is in

5、formation classic methodology are mostly used advanced computer systems are emerging input data must be carefully documented (traceability) valuation starts with a one page swot analysis of the targetvaluation is a matter of common sense formulas shall not replace your best judgment keep asking key

6、questions about target be as rigorous as possible at every step of the processsource: roland bergerdocument number6getting started with valuationwhat is the purpose of valuating assets?what does a value mean?what are the most typical problems associated with a value? transaction (buy side sell side)

7、 representation (balance sheet portfolio) risk assessment (loans) a good start value is not a price for who? for how long? based on which assumptions?source: roland berger123document number7making a good valuation requires a good understanding of the targetthere is no black-box to make a valuationva

8、luation is information classic methodology are mostly used advanced computer systems are emerging input data must be carefully documented (traceability) valuation starts with a one page swot analysis of the targetvaluation is a matter of common sense formulas shall not replace your best judgment kee

9、p asking key questions about target be as rigorous as possible at every step of the processsource: roland bergerdocument number8preliminary advice for a good valuation work know your target, remember that ultimately the management will make the difference avoid working under situation of stress, tak

10、e some time to reflect on the numbers ask for help and ideas if you meet unexpected problems use the power of the team share your valuation conclusions with a peer have your valuation work checked by a valuation committee before coming back to the client12345source: roland bergerdocument number9givi

11、ng the right numbera company value is always a rangethe result of a valuation should be very clear on one pageremember that valuation is most helpful for negotiating purposes derived from different methodologies not too wide to be credible make very clear valuation report or resume the valuation pro

12、cess identify on a separated memo the potential issue minority investment (writing one check) majority investment (writing multiple checks)source: roland bergerdocument number10working in an uncertain environment with confidence choosing a growth rate for revenues is difficult expenditures are not a

13、lways well detailed some expenditures can be also considered as assets sensitivity to the variation of : commodities, interest rate, taxes work on industry forecast to find an average rate by businessestry to read more carefully financial reports and those of competitorstry to be conservative, and p

14、refer increasing the growth potentialrun a sensitivity analysis after modeling a “base case”selected valuation limitationssolutionssource: roland bergerdocument number11build a knowledge basesource: roland bergerfinancial information is valuablekeep a library of valuation casesshare this information

15、 inside the team build a transaction data base maintain it properly and feed it model business case difficulties and key issues enrich the learning experience of each team member make each team member a contributordocument number12calculating a fair value is always a challenge models are not always

16、“stable” terminal value and volatility have a huge impact on final results the flow of corporate news does not stop!difficult situationideal situation50010001500comparablesdcfreal options50010001500dcfreal optionscomparablessource: roland bergerdocument number13the valuation equilibrium will also be

17、 affected by dynamic exogenous factors changes in macro economic conditions will influence the valuation, in particular interest rates gdp growth rate tax rate and government policyspecific technical market factors liquidity transaction cost corporate issues shareholders pact agency signals and mana

18、gement entrenchment issuesdocument number14ultimately, valuation sensitivity will depend on the management capacity to lead value creation initiativesthe shareholder value of an investment is the difference between an acquisition premium paid in advance and the management creation initiatives taken

19、after the dealbefore making an investment, it is vital to assess the risks and opportunities involved in depth and, if you decide to go ahead, encourage the management of the target to move quickly and effectivelyinvestmentvaluevalue ofintended targetprice ofintended targetstand-alone valuepotential

20、 value creation initiativesmarket price prior to investmentacquisition premiummore or less identical for listed companiesit is this ratio which decides whether an investment is really successfuldocument number15as there is no “single value“ for a company, different approaches must be used to find th

21、e right valuation rangedifferent perspectives of valuationcompany valuecomparable companies methods - “the capital markets view”comparable listed companies comparable transactionsselected ratios: p/e; p/s; revenues/ebit, etc.real options modeldynamic value components of investments and acquisitionsb

22、ased on black/scholes modelused for weighting risky projectsasset based method “the divestment view”valuing assets outside their operating use (not as going concern)replacement values versus book valuesvalue indications: comparable assets; independent appraisesdcf method -“the strategic view”discoun

23、ted cash flow of future periodsestimation of synergies alternative approaches: discounted dividends, discounted incomes, etc.document number16a combination of different approaches must be used to calculate a valuation rangecomparable companies methoddcf methodcomparable transactions methodasset base

24、d methodidentification of comparable listed companies free cash flow planning identification of comparable transactionsstand alone valuation ofindividual assets outside theoperating environmentselection of multiples calculation of wacc, terminal value selection of multiples selection of comparable a

25、ssetsor transactions or appraisersapplication of multiple-ranges to target company sensitivity analysis application of multiple-ranges to target transaction alternative valuations givendifferent sales channelsvaluation-range for target company valuation-range for target company valuation-range for t

26、arget transactionvaluation range for single assetsor portfolio of assetsvaluation rangechange to real optionsdocument number17b.discount cash flow (dcf)b1. cash flowb2. discount rate and waccb3. terminal valueb4. common dcf q&adocument number18the dcf method is the most commonly used valuation m

27、ethod especially in m&a transactionsselected aspects of the dcf methodassumptionsjudgmentpotential areas of conflict value drivers (interest and growth rates, currencies.) risk-potential of the business good will premium capital expenditures company value strategic value of the target company (s

28、ynergy potential, capital expenditures etc.) upper limit for bidding price impact of an acquisition on financial structure of acquirer stand -alone value of the company anticipation of strategic interest of potential acquirers lower limit for selling pricestrategic buyerstrategic sellerdocument numb

29、er19the dcf method is based on three key value driversfree cash flow (to firm)weighted average costs of capital (wacc)terminal valuecompany value (cv)cv = + tvnfcfi(1 + wacc)ii=1document number20value drivers in discounted cash flow method (1)calculation of waccwaccre i (company) (1-t) (1- )=+re = c

30、ost of equity = i (market) + (m-i (market)i (market)= market risk free ratei (company) = interest rate of company (cost of debt)t = corporate tax rate = beta (indicator of systematic risk) m-i (market)= market risk premium (m-i (market) )= equity risk premium1- , = target capital structurewith = and

31、 (1-) =market value of equitycompany valuemarket value of debtcompany valuetax advantage of debt financingdocument number21value drivers in discounted cash flow method (2)discounted cash flow valuationderivation of free cash flowsearnings before interest and taxes (ebit) taxes+ depreciation change o

32、f provisions change of net working capital= operating cash flow+ divestments investments= free cash flow (to firm)enterprise value =discounted free cash flow market value of interest-bearing debt+ profit from the disposal of non-operating assetsfree cashflows0123nn+1discount of weighted average cost

33、 of capital (wacc)reference pointfcf1fcf2fcf3.terminalvaluedocument number22value drivers in discounted cash flow method (3)calculation of terminal valueterminal valuefree cash flow of last planning yearestimation of long term growth rate (g)discounted tvtvfcft+11(wacc-g)1(1+wacc)t=be carefulthe ter

34、minal value usually contributes between 50% and 70% to the overall company valuedocument number23potential pitfalls of the dcf method free cash flow forecasting is critical for the valuation the identification of comparable companies to select the right -factor is essential the market risk premium i

35、s subject to individual judgment the terminal value usually contributes 50%-70% to the overall company value. as the terminal value is very sensitive to the underlying parameters (e.g. perpetual growth rate), a broad range of values can be derived with only slight changes of assumptions the determin

36、ation of the appropriate tax rate is critical examples of other critical points:- pension liabilities according to balance sheet (mostly germany, austria)- minority stakes when calculating enterprise value versus equity valuedocument number24value of the firm value of the firm- value of firms debt+

37、value of firms cash= value of firms equitydiscount free cash flows at the weighted average cost of capital. the result is the present value of both debt and equity, or the value of the firmdocument number25discounted cash flow analysis provides an estimate of intrinsic valueanalytical processdevelop

38、 business analysisevaluate risk and target capital structureother adjustmentsresultsprojected annual free cash flowsestimated terminal valueappropriate weighted average cost of capitalrisk adjusted present value of free cash flows and terminal valuetotal firm valuenet present value of non-operating

39、and off-balance sheet assetsvalue of commonless debt (net of cash) and preferred stockdocument number26dcf requires in-depth business analysisindustry outlookcompetitive positionreinvestment needsexpansion opportunitiesanticipated industry growthmajor opportunities/riskspricing flexibilitypossible m

40、arket share changescost structureworking capital required capital expendituresdiscretionary investmentsnew products/stores/formatdevelopment costseconomies of scaledocument number27the dcf method is based on three key value drivers+ tvfv = ni=1fcfi(1 + wacc)ifirm value (fv)1free cash flow to firm (f

41、cf)weighted average costs of capital (wacc)terminal value (tv)23the dcf model estimates a firms value by discounting the firms expected cash flows at a rate which reflects the riskiness of the flows. document number28b.discount cash flow (dcf)b1. cash flowb2. discount rate and waccb3. terminal value

42、b4. common dcf q&adocument number29determination of cash flowsearnings before interest and taxes (ebit)taxes1)+depreciationchange of provisionschange of net working investment=operating cash flow+desinvestmentsinvestments=free cash flow (to firm)1) calculated figure (not the actual taxes) for a

43、fully equity financed companydocument number30working cash balances+ accounts receivable+ inventory+ other current assets- accounts payable- accrued liabilities- other current liabilities= net working investmentchanging net working investmentnet working investment (nwi) nwi is the net balance of the

44、 accounts in the current portion of a companys balance sheet that move with normal business activity (i.e., move with sales) and operating decisions, but not with financing decisions. nwi represents the investment in current assets and liabilities required to support sales. nwi differs from “working

45、 capital” which includes other accounts that do not necessarily move with sales, such as cash and short-term debt. source: roland berger analysisdocument number31nwi is useful because it helps us to understand the business of target company focus on the operating aspects of the business independent

46、of discretionary financial decisions (e.g., changes in cash and short-term debt) better understand how an industry works by analyzing its nwi identify changes in the management of the business as well as changes in the business environment understand how a particular company works by comparing its n

47、wi to your expectations and its competitors nwi understand how a companys performance is affected by business and industry cycles and seasonality understand how management decisions (such as trade policies, accounting practices, buying and selling a business, etc.) can affect a companys nwi forecast

48、 a companys investment requirements to support future sales, which affect a companys debt capacity and valuationsource: roland berger analysisdocument number32however, there are some industries where nwi dose not applyutilitiesbanks and insurance companiessecurities firms the industry uses some unus

49、ual accounting practices due to government regulation and industry specific financial reporting standards. banks and insurance companies do not invest in receivables and inventory as we think of them for non-financial services companies. it is difficult to distinguish current from long term assets a

50、nd liabilities, given that assets are marked-to-market daily and are quite liquid. source: roland berger analysisdocument number33some business are sensitive to various cycles and by understanding these will have accurate forecast of nwicycles impact nwiseasonality seasonal companies sell a relative

51、ly high proportion of their annual sales in one season. department stores, for example, do most of their years business during the december holiday season. simply looking at the annual financial statements will not disclose this. seasonality can be better determined by looking at quarterly reports.b

52、usiness cycle some companies sales are sensitive to general economic conditions (i.e. gnp) and their sales rise and decline during economic expansions and contractions. it takes time for manufacturers to react to economic downturns, resulting in higher inventories. customers also tend to pay their b

53、ills more slowly, increasing receivables. these factors increase nwi/sales. remember to analysis how the company performed during past business cycles.industry cycle some industries have cycles that are peculiar to it and are unrelated to the economy as a whole. an example of this is the 36-month po

54、ultry cycle. the cycle occurs as follows: as poultry farmers raise chickens, supply begins to outweigh demand, causing farmers to cut back their chicken production. this leads to under-supply so farmers increase chicken production, again resulting in supply exceeding demand, and the cycle continues.

55、 source: roland berger analysisdocument number34changes in nwi need to be evaluatedsource: roland berger analysislooking at the behavior of the individual components of nwi and their relationship to sales andusing financial ratios:receivables days = (average accounts receivable/sales)365this shows h

56、ow long it takes to convert accounts receivable into cash. a receivables days ratio that is significantly longer than the industry standard or the normal credit terms of the company or one that is growing may indicate credit management problems. a ratio lower than the industry standard may indicate

57、restrictive credit management.inventory days = (average inventory/cogs)365this shows how fast the inventory is converted from raw material into sales. if this ratio is rising, too much cash may be tied up in inventory relative to the level of sales.payables days = (average accounts payable/cogs)365t

58、his shows how fast payables are paid by the company. when this ratio is rising, it may indicate more favorable credit terms or late payment of bills. when falling, it may indicate tightened credit terms from suppliers. nwi evaluation methodsdocument number35b.discount cash flow (dcf)b1. cash flowb2.

59、 discount rate and waccb3. terminal valueb4. common dcf q&adocument number36valuations are highly sensitive to the discount ratebased on a recent valuation millionsa 1% change in the discount rate can change value by 15-20%waccdocument number37investors use various methods for calculating discou

60、nt rates hurdle rates nominal real “historical” wacc “forward-looking“ waccdocument number38many companies use their own hurdle rates simple and easy to understand useful for investment proposals and business plans useful “sanity check” or conservative rate of return a single real rate for a company with overseas div