Document number,1,Content,Executive Summary 执行摘要 Introduction to valuation Discount cash flow (DCF) B1. Cash flow B2. Discount rate and WACC （ Weighted Average Cost of Capital的缩写。WACC代表公司整体平均资金成本，可用来衡量一个项目是否值得投资；项目的回报必须不低于WACC） B3. Terminal value 终值 B4. Common DCF Q&A Comparable C1. Comparable methodology C2. Listed peer comparable C3. Transaction comparable Real Option Other valuation topics F1. Investment process and management F2. Data gathering F3. Define a relevant valuation range F4. Sensitivity analysis F5. Industry specific valuation insight Appendix,Document number,2,Executive summary,Document number,3,Introduction to valuation,Document number,4,Valuation tools will typically revolve around two types of methodologies : Future Cash Flows and Historical Market Prices,Financial statements and analysts research,Macroeconomic and stock market data,Company Value,DCF method,Discounted Dividend method,Comparable companies method,Asset-based methods,Different valuation methods,Management Judgment,Real option method,Comparable transactions method,Document number,5,Making a good valuation requires a good understanding of the target,There is no black-box to make a valuation 没有暗箱操作做出报价,Valuation is information,Classic methodology are mostly used Advanced computer systems are emerging,Input data must be carefully documented (traceability) Valuation starts with a one page SWOT analysis of the target,Valuation is a matter of common sense,Formulas shall not replace your best judgment Keep asking key questions about target Be as rigorous as possible at every step of the process,Source: Roland Berger,Document number,6,Getting started with valuation,What is the purpose of valuating assets?,What does a value mean?,What are the most typical problems associated with a value?,Transaction (Buy side sell side) Representation (Balance sheet portfolio) Risk assessment (Loans),A good start Value is not a price,For who? For how long? Based on which assumptions?,Source: Roland Berger,1,2,3,Document number,7,Making a good valuation requires a good understanding of the target,There is no black-box to make a valuation,Valuation is information,Classic methodology are mostly used Advanced computer systems are emerging,Input data must be carefully documented (traceability) Valuation starts with a one page SWOT analysis of the target,Valuation is a matter of common sense,Formulas shall not replace your best judgment Keep asking key questions about target Be as rigorous as possible at every step of the process,Source: Roland Berger,Document number,8,Preliminary advice for a good valuation work,Know your target, remember that ultimately the management will make the difference,Avoid working under situation of stress, take some time to reflect on the numbers,Ask for help and ideas if you meet unexpected problems use the power of the team,Share your valuation conclusions with a peer,Have your valuation work checked by a valuation committee before coming back to the client,1,2,3,4,5,Source: Roland Berger,Document number,9,Giving the right number,A company value is always a range,The result of a valuation should be very clear on one page,Remember that valuation is most helpful for negotiating purposes,Derived from different methodologies Not too wide to be credible,Make very clear valuation report or resume the valuation process Identify on a separated memo the potential issue,Minority investment (writing one check) Majority investment (writing multiple checks),Source: Roland Berger,Document number,10,Working in an uncertain environment with confidence,Choosing a growth rate for revenues is difficult Expenditures are not always well detailed Some expenditures can be also considered as assets Sensitivity to the variation of : commodities, interest rate, taxes,Work on industry forecast to find an average rate by businesses Try to read more carefully financial reports and those of competitors Try to be conservative, and prefer increasing the growth potential Run a sensitivity analysis after modeling a “base case”,Selected valuation limitations,Solutions,Source: Roland Berger,Document number,11,Build a knowledge base,Source: Roland Berger,Financial information is valuable,Keep a library of valuation cases,Share this information inside the team,Build a transaction data base Maintain it properly and feed it,Model business case Difficulties and key issues,Enrich the learning experience of each team member Make each team member a contributor,Document number,12,Calculating a fair value is always a challenge,Models are not always “stable” Terminal value and volatility have a huge impact on final results The flow of corporate news does not stop!,Difficult situation,Ideal situation,500,1000,1500,Comparables,DCF,Real Options,500,1000,1500,DCF,Real Options,Comparables,Source: Roland Berger,Document number,13,The valuation equilibrium will also be affected by dynamic exogenous factors,Changes in