Valuation Fundamentals Flashcards
1
Q
Time Value of Money
A
In order to assess the value of future cash flows, we use a process called ‘discounting’ which allows us to value future cash flows in terms of their value today
2
Q
Discounted Cash Flow Analysis
A
A valuation method that estimates the total value/purchase price of a business based on the Business estimated future cash flows
3
Q
Trading Comparables Analysis
A
A valuation method that uses the valuation metrics of similar companies that are publicly traded to determine the value of the business
4
Q
Enterprise Value Mechanics
A
A concept of working from the value of the total Business to the Equity Value, which reflects the value attributable to the owners of the business
