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M&A Blog #16 – valuation (Discounted Cash Flow)

Francine Way

As I mentioned in my last post, Discounted Cash Flow (DCF) is a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment.

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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

By comparing key financial metrics such as price-to-earnings (P/E) ratios, price-to-sales (P/S) ratios, and price-to-book (P/B) ratios, analysts can estimate the target company’s value. Discounted Cash Flow (DCF) analysis is a commonly used income-based valuation technique.

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Mergers and Acquisitions Valuation Strategies: Unlocking the Secrets to Successful M&A Transactions

Sun Acquisitions

It’s the process of determining the financial worth of a business, helping acquirers and sellers establish a fair price and make informed decisions. It uncovers any hidden risks or opportunities, allowing parties to assess the target company’s financial health. The net asset value represents the company’s worth.

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The Verdict is In on the Sell Side: Business Valuation Basics

Successful Acquisitions

It’s a balance where numbers meet intuition, and neither aspect should be ignored. Purposes of Valuation Before diving into the nuts and bolts of valuation, it’s crucial to understand its purposes. In M&A, normalized EBITDA is crucial for attaching a multiple and forecasting cash flows.

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How to value a company that operates in a highly volatile industry with unpredictable revenue

Wizenius

Consider incorporating sensitivity analysis to understand the impact of changing market conditions on cash flows. Discounted Cash Flow (DCF) Analysis: DCF analysis is commonly used to value companies, even in volatile industries. Thanks, Pratik S

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Useful Software Industry Acronyms for Executives

Software Equity Group

Being aware of these terms and their implications can significantly enhance your ability to navigate negotiations, make informed business decisions, and demonstrate a comprehensive understanding of your company’s value. The cash accounting or the accrual method is used to prepare P&L statements.

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M&A Blog #15 – valuation (tools and data preparation)

Francine Way

Access to credible sources of information such as SEC EDGAR database , Treasury.gov , OECD GDP Forecast , Mergent Online, S&P Capital IQ, Hoovers, ValueLine, Yahoo Finance , MarketWatch , and Damodaran Online. I will discuss general tools and credible sources of information that a valuation professional can use for the analysis.

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