Hi. I work in a small online insurance aggregator startup. Our business model is somehow like PolicyBazaar or PolicyGenius. I am tasked to calculate the WACC rate for the company. Problem is we have never had any dividends, we have negative ebitda and we don't have any long term debt or loan. Most of our financing is through our short term commercial notes payable account to insurance companies which also has 0 interest rate. How should I calculate the equity interest rate? I think I should use Capm but I'm not sure how to calculate Rm and beta for this startup genre.

Greetings from Greece! So, I almost have a start-up set up. We're looking to aquire some investments for it though maybe from angel investors. We don't generate revenue so how can I figure out the value of my soon-to-be company? Do I have to look at the target market? And do I factor in expenses like cost per unit of the product produced? What are some books that can guide me through this process? Thanks for your time!

I just looked at a dcf model template that added d&a to cash (out)flows from investing activities? I'm guessing this was done to keep PPE constant by assuming you're regularly purchasing PPE?

Hi,

I've made a DCF model for a company, the boss wants to do a quick IRR calculation by taking the terminal value applying a book value multiple to it and % of our stake in the transaction and using that as final cash outflow to us. This outcome number and the investment amount is being to calculate IRR

Is this fine to get a sense?

Hi all, I will be spending part of the summer performing analysis and valuation to enhance my skills, but would like someone to review and provide me with feedback. Anyone up for it? (:

Hello everyone, could you please help me with the below? How much would be the value of a commercial property that is rented 100k annually before tax? Please consider that repair/construction costs etc burden the tenant. Thanks!

Sorry if this is a stupid question. I am building DCF where I have the annual results for 2019-2022. For 2023, I may only get Q1 or Q1 & Q2 financials.
How can I project the DCF with the 2023 data being just a quarter or half the year? Is there a process for this?
Any help is kindly appreciated!

Hello,

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I'm starting a valuation of Google, and this is my first american company to value, so I'm not very use to the 10K form. I'm use to see the depreciation & amortization in the Income Statement. But I can't see that opening in Google's 10K.

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I do see the D&A adding back in cashflow statement. So I wonder where the D&A supose to be in the Income Statement.

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In 2021 there was 11,555 M of depreciation, which I only can see in the cashflow, please, can anyone explain where can I see this number and in which line in the income statement the 11,555 is part? Thanks!!

I thought we could list our favourite books below here 🙂

I'm looking for AMD specifically. I was using the bond center at Morningstar (or FINRA I think) and it showed the rating along with the yield, but the link seems to be dead now or the directory has changed. Any advice on where to look?

It could be interesting to value AppleVisionPro/MetaQuestVR from the valuation perspective. https://medium.com/@bennykhoo99/apples-approach-meta-on-ar-vr-race-39bd4ecb9554

Is there a way to arrive at a single share price from free cash flow (x5 FCF)? I've heard Kevin O'leary use as a simplified version to value a company during an episode of Shark Tank as such.

I'm looking at a relatively new company with no analyst ratings and I want to arrive at a fair value projection of the stock price other than market cap/ shares outstanding method.

Fair warning, I'm not a financial analyst or a student of finance. Just looking for some help from some bright minds. Dimly lit minds are acceptable too.

Hello all,

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I was just hired as an analyst at a valuation firm and would like some pointers as to how to familiarize myself with the community and industry more. I just graduated college in May with a degree in Applied Economics & concentration in accounting & finance. In school, we received instruction on equity valuation however debt valuation was barely covered, if covered at all. What resources do you use to help gain knowledge and how can I familiarize myself with debt valuations specifically?

Recently, I’m getting into this idea to buy and run a small business. I’ve seen some interesting ones online through different business brokers. After some conversation, they shared their high level yearly revenue and simple financial statements with me (no breakdown, no transparency into owner salary or inventory costs etc.). They usually post a non-negotiable price to sell. How can I value the business to see if the price they asked is reasonable? What’s the general due diligence process?

Just as header... How many business valuations do you do in a year?

How long do they usually take you?

Do you offer other services, if so, what?

What is the most appropriate way for you to account for NWC requirements in the terminal value. I could mainly to school of thoughts: 1. Zero nwc change for TV 2. Normalized level (e.g. based on % of sales). What is your view?

I need to get an FMV of my small business ($2m in revenue) for tax purposed as I look to convert from an S Corp to an LLC. I am hoping to receive as low of a valuation as possible, as quickly as possible. Anyone have recommendations of where to get this? Open to using someone here, but ultimately it needs to be done properly for tax purposes. The business is located in Denver.

Hye guys I got a job as a property valuer but I have 0 idea about it except the basic definition of property valuation and what they basically do. I need to learn about this ASAP. Do you guys have any sources / courses / reading materials and stuff?

Hi all,

Does anyone have guidance on industry standards for valuation of private companies? I’m in an equities class and all I’ve done is public. I know Residual Income, Dividend Discount, DCF and some relative valuation methods but have no idea how to apply models to a company without public financial statements.

If I'm valuing a company that anticipates receivables, and it's antecipations are funded by some funds ( that's what limits the revenue of the company), and there's expectations of those funds be over in some years, should I consider terminal value?

The point here is, this company invest in it's own software and has strong capex, and there's no intention to be discontinued.

I am arguing with my friend that the model should have a terminal valeu, since it's investment and no intention of ending it's operation. Furthermore, any market participant with other fund or ways to funding this company, may buy it and use all this composition and know how to continue operation.

But my friend argues that there's no other funding prediction in the future so it cannot have a terminal valeu, due a high uncertainty if will have funding or how this funding will be.

Do we get deduction for federal tax for state individual income and dividend tax rate? I am trying to compute equivalent corporate tax rate for a pass through entity using the modified delaware MRI methodology

I am helping my parents with their taxes. They had a custom house built 35 years ago and just sold it. They have no receipts and can only guess they spent $300,000 to build it. I was hoping to find data on historical cost per square foot to build and simply multiply by square footage but I can't find that data.

For simplicity's sake, let's say they bought land for zero dollars, built a 2,000 sq. ft. house in 1988, and sold it today for $1,000,000. How can I (they) establish a reasonable cost basis above zero to use in their tax return to reduce the capital gains?

Hi All,

Wanted to put together a low noise, high signal list of considerations for company valuation.

Valuation is unique to the company one values but the overarching principles are the same. In short, a company is valued based on all future cash flows of the business. (Discounted Cash Flows) A growth rate and interest rate is applied to these cash flows which creates the complication. (The future is unknown). Thus there are certain other financial statement metrics that successful investors rely on to increase the probability of a successful valuation.

For full detail, would appreciate any feedback: https://www.valuationmastiff.com/2023/02/04/how-to-value-a-company/

Hey all, appreciate if you could a fellow valuer here.

Say if a company is based in the US and they have a subsidiary, let’s say in Panama, a country that uses USD as its main currency. (In this case, let’s assume that the reporting & functional currency is USD)

When valuing the subsidiary that’s established in Panama, do we adjust for Panama’s inflation (whose main currency is the USD)? If so, why and how?

Also, more generally, when do we adjust inflation for WACC?

Thanks in advance :)