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Methods of Valuation - Coggle Diagram
Methods of Valuation
Earning Based
- P/E Multiple (Adjust to make relevant to co based on Increase/decrease in risk)
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- Earnings (Income/ Expense unusual or not market related)
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Historic (FMA300) , Forward looking (CTA)
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EBITDA = Earnings before interest, tax, depreciation & amortisation
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FREE CASH FLOW
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- No div/ Div differ significantly from co's capacity to pay them.
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- -ve CFs now but +ve CFs in future
- Reconcile from PBT/PAT to cash flow
- CFs align with profitibility
- Calculate the actual cash flows
- Valuing a controlling interest
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Dividend Discount Model
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- Valuing minority shareholding
- Dividends have consistent growth with profitability
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Net Asset Value
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If lower than FCF, then good.