Mastering Financial Modelling in Microsoft Excel 3rd edn, 3rd Edition

19

Company valuation

Introduction

Accounts

Adjusted accounting value

Dividends

Stock market or market method

Free cash flows

Summary

INTRODUCTION

Earlier chapters have included models on analysing and forecasting company performance, the cost of capital and investment analysis. This chapter looks specifically at valuing companies and builds on some of the techniques in past chapters. The purpose here is to review different techniques around a model called MFM3_19_Valuation which builds up to a comparison report of the different methods.

Valuing companies is not an exact science and different individuals will have a mixture of ideas about the value of assets or growth prospects. In simple terms, companies are worth whatever investors or other ...