Strategy Driven

FEBRUARY 21, 2020

Discounted Cash Flow. Investors can make strong arguments if they don’t find the value of company according to their expectations. There are several methods for the valuation of a business or a company. Precedent Transactions. Comparable Companies. Formulas for Pre and Post Money Valuation.

Discounted Cash Flow 66

Discounted Cash Flow Book Value Finance Price 66

Harvard Business Review

NOVEMBER 5, 2013

When making big decisions, executives use familiar tools like discounted cash flow analysis far too often. That’s because the more uncertain a business context is, the less likely running some numbers and probabilities through a spreadsheet will be helpful.

Discounted Cash Flow 9

Discounted Cash Flow Discount Tools Analysis 9

Harvard Business Review

OCTOBER 16, 2013

Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value. But it is possible to significantly improve your odds by understanding which decision-support tools work best for which decisions.

Discounted Cash Flow 8

Discounted Cash Flow Net Present Value Comparison Business Model 8

Harvard Business Review

JUNE 18, 2015

For instance, despite the prominent role that discounted cash flow valuation methods play in academic finance courses, few PE investors use discounted cash flow or net present value techniques to evaluate investments. Rather, they rely on internal rates of return and multiples of invested capital.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

MARCH 10, 2011

Estimating the rate at which to discount the cash flows — the cost of equity capital — is an integral part of the exercise, and the choice of rate has a significant effect on estimates of a project's or a company's value. billion.

CAPM 15

CAPM Cost Cost of Capital Discounted Cash Flow 15

Harvard Business Review

MARCH 27, 2014

Ideas with positive discounted cash flows get investment. One – possibly more promising — receives one more round of funding. Three companies end up taking 60% of all investment dollars. By contrast, for corporate innovators each idea needs to carry its own weight. Those that don’t, don’t.

Venture Capitalist 8

Venture Capitalist Discounted Cash Flow Parcell Project 8

Harvard Business Review

OCTOBER 20, 2014

Combining these creates a P&L and a projection, which through a discounted cash flow analysis yields an NPV, which can be used to assess valuation. On the cost side, what’s the sourcing cost, the production cost, and the distribution cost? Which of these are ongoing, and which are one-off?

P&L 8

P&L Discounted Cash Flow NPV EBITDA 8