RB内部估值模型教程(PPT,307页).ppt

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&AComparableC1.Comparable methodologyC2.Listed peer comparableC3.Transaction comparableReal OptionOther valuation topicsF1.Investment process and managementF2.Data gatheringF3.Define a relevant valuation rangeF4.Sensitivity analysisF5.Industry specific valuation insightAppendix,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,DiscountedDividendmethod,Comparable companies method,Asset-based methods,Differentvaluation 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 usedAdvanced 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 judgmentKeep asking key questions about targetBe 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 startValue 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 usedAdvanced 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 judgmentKeep asking key questions about targetBe 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 methodologiesNot too wide to be credible,Make very clear valuation report or resume the valuation processIdentify 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 difficultExpenditures are not always well detailedSome expenditures can be also considered as assetsSensitivity to the variation of:commodities,interest rate,taxes,Work on industry forecast to find an average rate by businessesTry to read more carefully financial reports and those of competitorsTry to be conservative,and prefer increasing the growth potentialRun 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 baseMaintain it properly and feed it,Model business caseDifficulties and key issues,Enrich the learning experience of each team memberMake 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 resultsThe 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 macro economic conditions will influence the valuation,in particularInterest ratesGDP growth rateTax rate and government policySpecific technical market factorsLiquidityTransaction cost Corporate IssuesShareholders pactAgency signals and management entrenchment issues,Document number,14,Ultimately,valuation sensitivity will depend on the management capacity to lead value creation initiatives,The shareholder value of an investment is the difference between an acquisition premium paid in advance and the management creation initiatives taken after the dealBefore making an investment,it is vital to assess the risks and opportunities involved in depth and,if you decide to go ahead,encourage the management of the target to move quickly and effectively,Investmentvalue,Value ofintended target,Price ofintended target,Stand-alone value,Potential value creation initiatives,Market price prior to investment,Acquisition premium,More or less identical for listed companies,It is this ratio which decides whether an investment is really successful,Document number,15,As there is no“single value“for a company,different approaches must be used to find the right valuation range,Different perspectives of valuation,Company value,Comparable companies methods-“the capital markets view”Comparable listed companies Comparable transactionsSelected ratios:P/E;P/S;Revenues/EBIT,etc.,Real options modelDynamic value components of investments and acquisitionsBased on Black/Scholes modelUsed for weighting risky projects,Asset based method“the divestment view”Valuing assets outside their operating use(not as going concern)Replacement values versus book valuesValue indications:comparable assets;independent appraises,DCF method-“the strategic view”Discounted cash flow of future periodsEstimation of synergies Alternative approaches:discounted dividends,discounted incomes,etc.,Document number,16,A combination of different approaches must be used to calculate a valuation range,Comparable companies method,DCF method,Comparable transactions method,Asset based method,Valuation range,Change to Real Options,Document number,17,Discount cash flow(DCF)B1.Cash flowB2.Discount rate and WACCB3.Terminal valueB4.Common DCF Q&A,Document number,18,The DCF method is the most commonly used valuation method especially in M&A transactions,Selected aspects of the DCF method,assumptions,judgment,Potential areas of conflictValue drivers(interest and growth rates,currencies.)Risk-potential of the businessGood will premiumCapital expenditures,Company value,Strategic value of the target company(synergy potential,capital expenditures etc.)Upper limit for bidding priceImpact of an acquisition on financial structure of acquirer,Stand-alone value of the companyAnticipation of strategic interest of potential acquirersLower limit for selling price,Strategic buyer,Strategic seller,Document number,19,The DCF method is based on three key value drivers,Free cash flow(to firm),Weighted average costs of capital(WACC),Terminal value,Document number,20,Value drivers in Discounted cash flow method(1),Calculation of WACC,WACC,re,i(company)(1-t)(1-),=,+,re=cost of equity=i(market)+(M-i(market)i(market)=market risk free rateI(company)=interest rate of company(cost of debt)t=corporate tax rate=Beta(indicator of systematic risk)M-i(market)=market risk premium(M-i(market)=equity risk premium1-,=target capital structurewith=and(1-)=,market value of equitycompany value,market value of debtcompany value,Tax advantage of debt financing,Document number,21,Value drivers in Discounted cash flow method(2),Discounted Cash Flow Valuation,Derivation of Free Cash Flows,Earnings before interest and taxes(EBIT)Taxes+DepreciationChange of provisionsChange of net working capital=Operating cash flow,+DivestmentsInvestments=Free cash flow(to Firm),Enterprise Value=Discounted Free Cash Flow market value of interest-bearing debt+profit from the disposal of non-operating assets,Free Cashflows,0,1,2,3,N,N+1,Discount of weighted average cost of capital(WACC),Reference Point,FCF1,FCF2,FCF3,.,Terminalvalue,Document number,22,Value drivers in Discounted Cash Flow method(3),Calculation of Terminal value,Terminal value,Free cash flow of last planning year,Estimation of long term growth rate(g),Discounted TV,TV,FCFT+1,1(WACC-g),1(1+WACC)T,=,Be careful,The Terminal value usually contributes between 50%and 70%to the overall company value,Document number,23,Potential pitfalls of the DCF method,Free cash flow forecasting is critical for the valuationThe identification of comparable companies to select the right-factor is essentialThe market risk premium is subject to individual judgmentThe Terminal Value usually contributes 50%-70%to the overall company value.As the Terminal Value is very sensitive to the underlying parameters(e.g.perpetual growth rate),a broad range of values can be derived with only slight changes of assumptions The determination of the appropriate tax rate is criticalExamples of other critical points:Pension liabilities according to balance sheet(mostly Germany,Austria)Minority stakes when calculating enterprise value versus equity value,Document number,24,Value of the firm,Value of the firm-Value of firms debt+Value of firms cash=Value of firms equity,Discount free cash flows at the weighted average cost of capital.The result is the present value of both debt and equity,or the value of the firm,Document number,25,Discounted cash flow analysis provides an estimate of Intrinsic value,Analytical process,Develop business analysis,Evaluate risk and target capital structure,Other adjustments,Results,Projected annual free cash flowsEstimated terminal value,Appropriate weighted average cost of capitalRisk adjusted present value of free cash flows and terminal value,Document number,26,DCF requires in-depth business analysis,Industry outlook,Competitive position,Reinvestment needs,Expansion opportunities,Anticipated industry growthMajor opportunities/risks,Pricing flexibilityPossible market share changesCost structure,Working capital required capital expendituresDiscretionary investments,New products/stores/formatDevelopment costsEconomies of scale,Document number,27,The DCF method is based on three key value drivers,+TV,FV=,n,i=1,FCFi,(1+WACC)i,1,Free cash flow to firm(FCF),Weighted average costs of capital(WACC),Terminal value(TV),2,3,Document number,28,Discount cash flow(DCF)B1.Cash flowB2.Discount rate and WACCB3.Terminal valueB4.Common DCF Q&A,Document number,29,Determination of cash flows,Earnings before interest and taxes(EBIT)Taxes1)+DepreciationChange of provisionsChange of net working investment=Operating cash flow+DesinvestmentsInvestments=Free cash flow(to Firm),1)Calculated figure(not the actual taxes)for a fully equity financed company,Document number,30,Working cash balances+Accounts Receivable+Inventory+Other Current Assets-Accounts Payable-Accrued Liabilities-Other Current Liabilities=Net working investment,Changing net working investment,Net working investment(NWI),NWI is the net balance of the accounts in the current portion of a companys balance sheet that move with normal business activity(i.e.,move with sales)and operating decisions,but not with financing decisions.NWI represents the investment in current assets and liabilities required to support sales.NWI differs from“Working Capital”which includes other accounts that do not necessarily move with sales,such as cash and short-term debt.,Source:Roland Berger Analysis,Document number,31,NWI is useful because it helps us to understand the business of target company,Focus on the operating aspects of the business independent of discretionary financial decisions(e.g.,changes in cash and short-term debt)Better understand how an industry works by analyzing its NWIIdentify changes in the management of the business as well as changes in the business environmentUnderstand how a particular company works by comparing its NWI to your expectations and its competitors NWIUnderstand how a companys performance is affected by business and industry cycles and seasonalityUnderstand how management decisions(such as trade policies,accounting practices,buying and selling a business,etc.)can affect a companys NWIForecast a companys investment requirements to support future sales,which affect a companys debt capacity and valuation,Source:Roland Berger Analysis,Document number,32,However,there are some industries where NWI dose not apply,Source:Roland Berger Analysis,Document number,33,Some business are sensitive to various cycles and by understanding these will have accurate forecast of NWI,Cycles impact NWI,Seasonality,Seasonal companies sell a relatively high proportion of their annual sales in one season.Department stores,for example,do most of their years business during the December holiday season.Simply looking at the annual financial statements will not disclose this.Seasonality can be better determined by looking at quarterly reports.,Business cycle,Some companies sales are sensitive to general economic conditions(i.e.GNP)and their sales rise and decline during economic expansions and contractions.It takes time for manufacturers to react to economic downturns,resulting in higher inventories.Customers also tend to pay their bills more slowly,increasing receivables.These factors increase NWI/Sales.Remember to analysis how the company performed during past business cycles.,Industry cycle,Some industries have cycles that are peculiar to it and are unrelated to the economy as a whole.An example of this is the 36-month poultry cycle.The cycle occurs as follows:As poultry farmers raise chickens,supply begins to outweigh demand,causing farmers to cut back their chicken production.This leads to under-supply so farmers increase chicken production,again resulting in supply exceeding demand,and the cycle continues.,Source:Roland Berger Analysis,Document number,34,Changes in NWI need to be evaluated,Source:Roland Berger Analysis,Looking at the behavior of the individual components of NWI and their relationship to sales,and,Using financial ratios:,Receivables Days=(Average Accounts Receivable/Sales)365This shows how long