Valuation of Companies. Definitions Valuation is the process of estimation of the value of goods (assets, liabilities, shares, enterprises, etc.)

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Presentation transcript:

Valuation of Companies

Definitions Valuation is the process of estimation of the value of goods (assets, liabilities, shares, enterprises, etc.)

Why are we valuing? to know what we possess to know at what price we should sell (or buy) to pay gift tax

Methods of valuation of companies Methods based on the value of assets possessed by a company Methods based on the profitability of a company Mixed methods Comparative methods

Methods based on the value of assets possessed by a company Book value (BV) Adjusted book value (Adj. BV)

Methods based on the profitability of a company Multiplier of profit (multiplier = inverse of the expected rate of return) Discounted Cashflow (DCF)

Mixed methods German method Swiss method

Comparative methods We compare us to our competitors: - P/BV - P/E

Advantages and disadvantages of the valuation methods

Homework Prepare your opinion about the value of shares of Takeda Ltd.