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Best Practices for Due Diligence and Valuation in M&A

Sun Acquisitions

Common Valuation Methods: Comparable Company Analysis: Compare the target company to similar publicly traded companies. Precedent Transaction Analysis: Analyzes recent M&A transactions involving similar companies. Discounted Cash Flow (DCF) Analysis: Projects future cash flows and discounts them to their present value.

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Methods and Examples on How to Value a Company

Lake Country Advisors

Market Capitalization Market capitalization is one of the simplest and most commonly used methods for valuing a publicly traded company. Example Scenario: Suppose XYZ Corp is a publicly traded technology company with 50 million shares outstanding, and the current share price is $20.

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Buy Side M&A Blog Series - Vol 7 - Valuing The Target

RKJ Partners

Below are the six recognized methodologies with short explanations of each: Discounted Cash Flow (DCF) Analysis: This analysis derives an ‘intrinsic’ value of a company. The advantage of this method is that it takes into account the development of the company, rather than simply the historical financials.

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