Mastering Company Valuation: Strategic Insights with DCF and EBITDA (EBITDA) Multiple Methods (Excel-Based)

Duration: 2 days

Instructor: Fatih KURAN

'The stock market is full of individuals who know the price of everything but the value of nothing.'

Philip Fisher

'Price is what you pay. Value is what you get.'

Warren Buffett

Understanding the True Value of Your Company!

In today’s competitive and rapidly changing business environment, understanding a company's true value is not just a financial exercise but a strategic necessity. Whether considering a sale, merger, or simply optimizing your company’s growth strategy, having an accurate and comprehensive valuation can make all the difference.

This two-day session will enable you to evaluate your company’s value comprehensively using both Discounted Cash Flow (DCF) and EBITDA multiple methods. These complementary approaches will provide a long-term, intrinsic perspective on your company’s value while also offering a market-based perspective derived from industry-comparable data.

The DCF method allows us to evaluate the future earning potential of the business by projecting cash flows and adjusting them to present value. On the other hand, the EBITDA multiple method will offer a more market-driven snapshot, showing how your company compares to others in your sector.

By combining these two methodologies, we will provide a detailed and data-driven range of valuations, taking into account both your company’s internal strengths and external market conditions. This rigorous and multi-dimensional approach will not only provide you with the necessary financial insights to make informed decisions but also empower you to achieve the highest value in a potential transaction.

We invite you to join us for these two days, where we will break down the complexities of valuation, turn numbers into actionable insights, and ultimately empower you to unlock your company's true potential.

CONTENT

Day 1: Introduction and DCF Valuation

Session 1: Introduction to the Valuation Process

This session introduces the participants to the valuation process, the methods used, and how the final value will be presented.

·        Introduction to the participants and a summary of the goals of the valuation process.

·        Introduction to the valuation methods: Discounted Cash Flow (DCF) and EBITDA multiple method.

·        Discussion of required inputs: Historical financial statements, future growth projections, key assumptions. 

Session 2: Collecting Financial Data

·        Gathering historical financial statements (income statement, balance sheet, cash flow statement).

·        Reviewing past performance indicators.

·        Identifying one-off expenses or extraordinary items.

Session 3: Building the DCF Model

·        Forecasting Free Cash Flows (FCF).

·        Calculating the discount rate (WACC).

·        Calculating terminal value.

·        Discounting the Free Cash Flows to present value.

Session 4: Reviewing and Adjusting DCF Results

·        Presenting the results of the DCF valuation.

·        Discussing assumptions, scenarios, and sensitivity analysis.

·        Making adjustments based on feedback.

Day 2: EBITDA Multiple Valuation and Comparison

Session 1: Understanding EBITDA Multiples

·        Introducing the EBITDA multiple method, its usefulness, and how it complements the DCF valuation.

·        Explaining EBITDA as a measure of a company’s operating performance and the logic behind applying a multiple to it.

·        Discussing the impact of market comparables on valuation.

Session 2: Calculating the EBITDA Multiplier Valuation

·        Step 1: Normalize EBITDA

Adjusting the company’s EBITDA for non-recurring items (e.g., restructuring costs) to reach normalized EBITDA.

• Step 2: Determine Appropriate Multiple

Researching industry-specific EBITDA multiples for comparable companies using transaction data.

• Step 3: Calculate Enterprise Value (EV)

Multiplying normalized EBITDA with the chosen multiple to calculate the company’s enterprise value (EV).

• Step 4: Adjust for Debt and Cash

Adding cash and subtracting financial debt (total debt minus cash) from EV to get the equity value.

Session 3: Comparison of DCF and EBITDA Multiple Results

• Presenting the EBITDA multiplier valuation results.

• Comparing the DCF and EBITDA multiplier results.

• Discussing final valuation adjustments and conclusions.

• Address any potential discrepancies and finalize assumptions.

Session 4: Conclusion and Next Steps

• Summarizing results and determining the final valuation range.

• Discussing next steps and potential transaction strategies.

• A Q&A session to address remaining questions.

Materials to Provide to Interested Parties:

• Valuation Report: A comprehensive report summarizing the results of both the DCF and EBITDA multiple methods.

• Financial Model (Excel): A step-by-step financial model demonstrating DCF and EBITDA calculations.

Program and Participation Information

The number of participants is limited to 16. Excel applications will be used during the course, and participants are required to bring a laptop with Excel 2013 or higher installed. Basic knowledge of Excel is required.