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Relative Valuation and Corporate Valuation with MS Excel
Rating: 4.3 out of 5(23 ratings)
7,129 students

Relative Valuation and Corporate Valuation with MS Excel

Master the art of Relative and Corporate Valuation with hands-on Excel models and real-world strategies
Created byEDUCBA Bridging the Gap
Last updated 10/2024
English

What you'll learn

  • Introduction to Relative Valuation – Understanding its importance and use in financial analysis.
  • Different Types of Valuation Ratios – Exploring Price-to-Earnings (PE), Price-to-Book (PBV), Price-to-Sales (PS), and PEG Ratios.
  • Advantages and Disadvantages of Valuation Ratios – When to apply each and their limitations.
  • Practical Application of Valuation Ratios – Hands-on exercises with real-world company examples.
  • Comparable Company Analysis – Identifying and evaluating public companies for benchmarking.
  • Equity Value vs. Enterprise Value – Calculating and understanding the differences between these key metrics.
  • Building Financial Models – Constructing advanced models like Dividend Discount Model (DDM) and Discounted Cash Flow (DCF).
  • Forecasting Financial Statements – Projecting income statements, balance sheets, and cash flows.
  • Working Capital and Cash Flow Analysis – Learning the intricacies of working capital and how it affects valuations.
  • Excel Skills for Corporate Valuation – Using Microsoft Excel to implement financial models, calculations, and sensitivity analysis.

Course content

4 sections • 80 lectures • 7h 41m total length

  • Corporate Valuations - Overview1:43
  • Ddm - Dividend Discount Model- Intrinsic Value5:47
  • Ddm - Dividend Discount Model- Required Rate Of Return6:13
  • Ddm - Dividend Discount Model- Compare Intrinsic And Market Price5:07
  • Ddm - Intrinsic Value Of Growth Companies4:07
  • Ddm - Dividend Discount Model- Present Value8:12
  • Introduction To Dcf4:53

    Perform a basic discounted cash flow exercise with a mechanical view. Explore interlinked sheets for fcff projection, capital structure, cost of capital, and growth assumptions.

  • Forecasting Income Statement Ebitda6:26
  • Understanding The Working Capital8:10

    Explore how banks differ from manufacturing firms in valuation, focusing on money-based assets, mark-to-market concepts, and why price-to-book value aligns with bank market value.

  • Completing The Working Capital Calculations2:42

    Forecast depreciation as 13% of sales and derive ebit from ebitda. Apply a 33% tax rate and 13.3% of sales capex to determine free cash flow to the firm.

  • Linking The Free Cash Flow To Firm Fcff2:03

    Apply the treasury stock method by using only exercisable options to estimate dilution, distinguishing options outstanding from exercisable and accounting for lock-in periods, with strike price and current market price.

  • Discounting The Explicit Period Cash Flows5:12
  • Calculation Of Terminal Values6:49
  • Dcf Valuation Summary6:22
  • Dcf Sensitivity Analysis7:18
  • Understanding The Capital Structure11:47
  • Options Treasury Stock Method6:18
  • Options Explained2:03
  • Calculation Of In The Money Convertibles4:28
  • Calculation Of In The Money Stock Options5:10
  • Calculation Of Debt Equity Ratio4:06

    Calculate fully diluted equity value by linking stock price, shares outstanding, and dilution effects, then assemble debt components—short-term, straight long-term, and convertible—to derive the debt-to-equity ratio for capital structure analysis.

  • Cost Of Debt Calculations4:05
  • Cost Of Equity Calculation7:32
  • Enterprise Value Calculation Completing The Missing Links3:29

    Link missing inputs in enterprise value calculation by connecting cost of capital, debt, cash, and fully converted shares. Assess terminal value and exit multiple scenarios to estimate final value.

  • Introduction To Relative Valuation7:49

    Explore how relative valuation uses equity value and enterprise value multiples, like price-to-earnings and ev-to-ebitda, to build a comparable sheet and assess value drivers and financials.

  • Relative Valuations Enterprise Value And Equity Value5:18

    Explore enterprise value multiples such as EV/sales, EV/ebitda, EV/ebit, EV/FCF, and capacity, alongside equity value multiples like pe, price to cash flow, and price to book, in relative valuation.

  • Relative Valuations Comparable Comp Sheet6:17
  • Understanding Pe Ratio6:45
  • Forward And Trailing Pe3:18
  • Advantages And Limitations Of Pe4:26

    Learn how price to earnings handles negative earnings and why p/e can be non meaningful, accounting policy differences, balance sheet risk, and capital structure, for more accurate relative valuation.

  • Understanding Pbv Ratio2:13
  • Why Pbv Is Used In Banks8:10

    Banks use price to book value because their assets are money-based and marked to market, making book value a close proxy for market value, unlike manufacturing's hard assets.

  • Pbv And Roe Used For Energy Sector2:12
  • Understanding Pcf Ratio3:01
  • Why Pcf Used In Oil Gas Gold Real Estate3:03

    Price to cash flow is used for oil, gas, gold, and real estate. Upstream oil and gas with known reserves have variable cash flows; low pcf signals takeover targets.

Requirements

  • Basic Knowledge of Finance – A foundational understanding of financial concepts like income statements, balance sheets, and cash flow is recommended.
  • Familiarity with Financial Ratios – Awareness of common financial ratios such as PE, PBV, and ROE will be helpful.
  • Basic Microsoft Excel Skills – Knowing how to navigate and use Excel for basic formulas and data entry is essential.
  • Interest in Corporate Valuation – A genuine interest in learning how to value companies and analyze financial statements.
  • Eagerness to Learn – Willingness to engage with practical examples and develop hands-on skills.

Description

Introduction:

In this comprehensive course, you'll dive deep into the art of Relative Valuation and Corporate Valuation techniques using practical examples and real-world applications. We’ll explore different valuation ratios, comparable company analysis, and advanced financial models, such as Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). This course is designed to take you from a beginner to a pro in corporate valuation using Microsoft Excel, providing you with the essential tools to evaluate company performance and make informed financial decisions.

Section 1: Introduction to Relative Valuation

This section introduces the fundamental concepts of Relative Valuation. We begin by understanding its importance in financial analysis and comparing it with other valuation methods. Lecture 1 sets the stage for the rest of the course, giving you a clear framework for navigating through relative valuation strategies and tools. By the end of this section, you'll understand why relative valuation is a crucial tool for comparing companies in similar industries.

Section 2: Types, Advantages, and Disadvantages of Valuation Ratios

In this section, we dive into different types of relative valuation methods, including Earnings and Book Multiples. You'll explore the advantages and limitations of each, giving you a balanced view of when and how to apply them. By the end of this section, you’ll be able to differentiate between Price-to-Earnings (PE), Price-to-Book (PBV), Price-to-Sales (PS), and PEG Ratios, understanding their strengths and weaknesses in analyzing company performance.

Section 3: Practical Applications of Valuation Ratios

This hands-on section focuses on applying the concepts from the previous section in practical scenarios. You'll work through real-world examples, such as calculating the Enterprise Value (EV) Ratio, identifying a list of comparable public companies, and analyzing Equity Value versus Enterprise Value. We'll guide you through detailed analyses of different companies using ratios like PE, PBV, and Price-to-Sales to assess financial health. You'll also conduct benchmarking analysis and learn how to build comparable company analysis sheets, which are vital tools in financial modeling.

Section 4: Corporate Valuation - From Beginner to Pro in Microsoft Excel

This section takes your valuation skills to the next level with a deep dive into Corporate Valuation techniques. You’ll start with a comprehensive overview and then progress through complex models like the Dividend Discount Model (DDM) and Discounted Cash Flow (DCF). You’ll learn how to forecast income statements, calculate terminal values, and link free cash flow to firm (FCFF). We’ll also cover how to analyze capital structures and perform DCF sensitivity analysis. By the end, you’ll have mastered the intricate details of both relative valuation and corporate valuation, becoming proficient in leveraging Excel for financial decision-making.

Conclusion:

By the end of this course, you will have a solid understanding of both Relative Valuation and Corporate Valuation methods. You’ll be equipped with practical skills in financial analysis, including how to apply valuation ratios, conduct comparable company analysis, and implement advanced financial models like DCF and DDM using Excel. This course prepares you to confidently analyze company performance and make informed decisions, whether you're working in finance, investment, or managing your own business.

Who this course is for:

  • Finance Professionals – Those working in investment banking, financial analysis, corporate finance, or related fields looking to enhance their valuation skills.
  • Business Students – MBA students or those studying finance who want practical knowledge in company valuation and financial modeling.
  • Investors & Traders – Individuals looking to evaluate companies more effectively through relative valuation and improve their investment decisions.
  • Accountants & Auditors – Professionals interested in understanding company valuations to complement their financial reporting or auditing practices.
  • Entrepreneurs – Business owners seeking to better understand the value of their company or potential investment opportunities.
  • Career Changers – Individuals transitioning into finance or corporate valuation roles who want to build foundational skills.
  • Anyone Interested in Corporate Valuation – Whether you're a beginner or have some experience, this course is for those eager to understand and apply valuation techniques.

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