Corporate and Asset Valuation: Approaches, Inputs and Issues
What you'll learn
- Define critical valuation terms.
- Discover how a company can be valued relative to its competitors using several common metrics.
- Discover how to evaluate company Betas, and to subsequently un-lever or re-lever them.
- Discover how to compare a derived Enterprise Value from a model to the market.
- Prerequisite: Experience with business valuation
- Advanced Preparation: None
This course provides an overview of valuation and the principal methods used to value firms or any cash flow producing asset. Relative valuation, commonly known as the “comps” (comparables) approach, is initially introduced, along with several metrics often used to compare competitors.
The remainder of the course is focused on the discounted cash flow (DCF) approach to valuation, where three approaches are discussed: 1) the dividend discount model, 2) cash flows to equity, and 3) cash flows to the firm, as well as in what instances each is most applicable.
In the process of introducing the DCF approach, we discuss some critical valuation frameworks and tools, including the Capital Asset Pricing Model (CAPM), the Weighted Average Cost of Capital, and the un-levering and re-levering of Beta.
The course covers:
Critical valuation terms including Enterprise Value, Free Cash Flows, EBITDA, Capital Asset Pricing Model, Beta, and the Weighted Average Cost of Capital.
How a company can be valued relative to its competitors using several common metrics including Price-Earnings Ratio, Price to Sales, Price to Book Value, and Enterprise Value to EBITDA.
Computing EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) and Free Cash Flows to the Firm
Recognizing whether a valuation model should be based upon the cash flows to the entire firm, or the residual cash flows to equity holders.
How to evaluate company Betas, and to subsequently un-lever or re-lever them.
How to compare a derived Enterprise Value from a model to the market.
Who this course is for:
- Anyone interested in Accounting, Finance or related fields.
Illumeo, incorporated in 2009, is revolutionizing the hide-bound world of corporate learning. Illumeo works with corporate professionals and organizations of all sizes to build the skills and capabilities that help everyone be an expert at their job.
Based in Silicon Valley, CA, Illumeo serves thousands of corporations and corporate professionals across Finance, Accounting, Human Resources, Sales and Marketing. The platform offers assessments, industry-benchmarked competency analyses, hundreds of expert-developed courses, collaborative tools, and the ability for companies to self-publish internal courses that promote institutional knowledge retention and dissemination.
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Since 1995, Eric has been a lecturer in accounting and real estate at the UCLA Anderson Graduate School of Management, where he has been voted Teacher of the Year thirteen times by Anderson’s MBA students, and has been awarded the Citibank Teaching Award (1998) and the Neidorf Decade Teaching Award (2008), both voted upon by a committee of faculty members. He has also received recognition by Businessweek as one of the Top Ten Most Popular Business School Professors in the country.
He teaches in the areas of cost/managerial accounting, financial accounting (beginning through advanced), financial statement analysis, equity valuation, corporate financial reporting, and real estate investment and finance to undergraduate, graduate, and Executive Education students. He created Insight FSA, an analytical software tool to automatically and critically measure, evaluate, and report upon the financial accounting and corporate reporting risk for all public companies via Edgar On-line.
In addition, he has advised numerous Full-time and Fully Employed MBA field study teams and consulted for large and small firms, nationally and globally, and is a frequent lecturer on varied financial, accounting, and corporate reporting topics. He has led student travel groups to Brazil, China, Dubai, Saudi Arabia, and Abu Dhabi. He has served as an expert witness and consultant for commercial litigation, involving matters of corporate financial reporting and disclosure, audit effectiveness, valuation, real estate due diligence and related practices, and overall damage analyses.
Outside of campus, Mr. Sussman is president of Amber Capital, Inc., Manager of Fountain Management, LLC and Clear Capital, LLC, and Managing Partner of Sequoia Real Estate Partners, and the Pacific Value Opportunities Funds, which have acquired, rehabilitated, developed, and managed over two million square feet of residential and commercial real estate in the past 20 years. The firms' portfolio presently consists of industrial, multi-family residential, single-family residential, and retail properties (approximately 2,200 residential units and some 500,000 square feet of commercial space).
He is Chairman of the Board of Trustees of Causeway Capital’s group of funds (International Value, Emerging Markets, Global Value, and Global Absolute Return Funds, which collectively have nearly $8.0 billion in assets), sits on the Board of Directors of Pacific Charter School Development, Inc. and Bentley-Forbes, LLC; and was former Chairman of the Presidio Fund and former Audit Committee Chair of Atlantic Inertial Systems, Inc., a producer and manufacturer of electromagnetic sensors. He received his MBA from Stanford, with honors, in 1993, after graduating Summa cum Laude from UCLA in 1987. He is a licensed CPA in the State of California.
Managing Partner : Sequoia Real Estate Partners - [2008-01 to Current]
Our firm acquires, renovates, and repositions Class B multifamily housing projects.
Senior Lecturer : UCLA - [1995-09 to Current]
Teach MBA courses in accounting, financial reporting, valuation, finance, and real estate.
MBA, Finance, Entrepreneurship, Real Estate : Stanford Graduate School of Business (at Stanford University ) - [1991 to 1993]
BA, Economics-Business : UCLA Anderson School of Management (at University of California, Los Angeles ) - [1984 to 1987]