Session 19 - Asset Based Valuation - New York University
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WhatisassetbasedvaluaCon? dualassetscanbetangibleorintangible.2!Aswath Damodaran2!
WhywouldyoudoassetbasedvaluaCon? tsindividuallyforoneoftwogroups: tsmaybe“cheap”.3!Aswath Damodaran3!
HowdoyoudoassetbasedvaluaCon? roxyfortheesCmatedvalueoftheasset.4!Aswath Damodaran4!
Whenisasset- ‐basedvaluaConeasiesttodo? fferentindependentbusinesses),asset- latedordifficulttoseparate,asset- sprices.5!Aswath Damodaran5!
I.LiquidaConValuaCon ),pricingiseasytodo.Forassetsthatarenot,youo attheliquidaConisurgent,youmaya achadiscounttotheesCmatedvalue.6!Aswath Damodaran6!
II.AccounCngValuaCon:GlimmersfromFAS157 accountantsareaskedtoa uaConswithintrinsicvaluaCons.O th Damodaran7!
III.SumofthepartsvaluaCon nvalue.8!Aswath Damodaran8!
Let’strythisUnitedTechnologies:RawData- ‐2009DivisionCarrierPratt &WhitneyOtisUTC Fire eratingIncomeCapitalTotalExpenditures Depreciation AssetsBusinessRefrigerationsystemsRevenues 14,944 1,510 1,316 191 194 10,810DefenseConstruction 12,965 12,949 2,490 2,680 2,122 2,477 412 150 368 203 9,650 7,731Security 6,462 780 542 95 238 10,022ManufacturingAircraft 6,207 5,368 1,277 540 1,099 478 141 165 178 62 8,648 3,985The company also had corporate expenses, unallocated to the divisionsof 408 million in the most recent year.Aswath Damodaran9!
nDivisionCarrierPra skySumofthepartsvalueforbusiness 10!Aswath Aforsector 1,5105.25 2,4908.00 2,6806.00 7807.50 1,2775.50 5409.00ValueofBusiness 7,928 19,920 16,080 5,850 7,024 4,860 61,66110!
UnitedTechnologies:RelaCveValuaConA“be er”valuaCon?DivisionCarrierPratt &WhitneyOtisUTC Fire &SecurityHamiltonSundstrandSikorsky11!Aswath DamodaranScalingVariableCurrentvalue forscalingvariableEBITDA 1,51013.57%Revenues 12,96524.51% 16.37%EBITDA 2,680Capital 5,575RevenuesCapitalOperating TaxROC Margin Rate8.81%Predicted Multiple5.35 – 3.55 (.38) 14.1738% (.1357) 5.92EstimatedValue 8,944.47 26,553.2935.71% 19.13%38% 0.85 7.32 (.1637) 2.053.17 – 2.87 (.38) 14.6638% (.3571) 7.316.03%38% 0.55 8.22 (.0603) 1.05 5,828.76 6,20714.16% 17.71% 38% 0.51 6.13 (.1771) 1.59 2,21713.37% 8.90% 38% 0.65 6.98 (.1337) 1.58Sum of the parts value for operating assets 9,902.44 3,509.61 74,230.378.39% 19,601.7011!
nCarrierPratt &WhitneyOtisUTC Fire& SecurityHamiltonSundstrandSikorsky12!Aswath DamodaranCost ofcapital7.84%Return h5.87%Length of growthperiod5Stablegrowth 2%13.76%553%3%9.06%9.82%12!
nessCarrierPratt & WhitneyOtisUTC Fire &SecurityHamiltonSundstrandSikorskySum13!Aswath DamodaranCost ofcapital7.84%7.72%9.94%PV ofFCFF 2,190 3,310 5,717PV of TerminalValue 9,498 27,989 14,798Value of OperatingAssets 11,688 31,299 20,5156.78% 0 4,953 4,9539.06%9.82% 1,902- 49 6,343 3,598 8,245 3,550 80,25013!
UnitedTechnologies,DCFvaluaConSumoftheParts Valueoftheparts rent(1 t)(1 g)408(1 .38)(1.03) (Costofcapital g)Company(.0868 .03) 4,587ValueofoperaCngassets(sumofpartsDCF) 75,663ValueofoperaCngassets(sumofpartsRV) 74,230ValueofoperaCngassets(companyDCF) 71,410Enterprisevalue(basedonmarketprices) 52,26114!Aswath Damodaran14!
3! Why&would&you&do&assetbased&valuaon?& 3!! Liquidaon sets& piece&meal,&rather
John Wiley & Sons, Inc. C1.jpg. EQUITY ASSET VALUATION. . 1 Introduction to Free Cash Flows 108 2 FCFF and FCFE Valuation Approaches 109 . 11 Valuation Indicators and Investment Management 231 12 Summary 233 Problems 236. CHAPTER 5 Residual Income Valuation 243. Learning Outcomes 243
Automated Valuation Models (AVMs) are computer-based systems which encompass all data concerning real estate in a particular area and are capable of producing more consistent valuation reports within a short time. Traditional valuation methods employed by valuers somewhat delay the valuation process. For
Asset Keeper Pro - Fixed Asset Cycle Asset Keeper Pro - Fixed Asset Cycle Page 5. Fixed Asset Cycle: Building your own Fixed Asset Cycle If you would prefer to add your own steps to the Fixed Asset Cycle because you are unsure of the procedure that you currently use, you can use the Add Step button. This provides a very quick method
Jun 15, 2016 · The discussions and examples in this Valuation Advisory make specific assumptions for 52 illustrative purposes only. While general principles have been provided for guidance to assist in the 53 valuation of customer-related assets, assumptions used in the valuation of any asset
CHAPTER 4 RELATIVE VALUATION In discounted cash flow valuation, the objective is to find the value of an asset, given its cash flow, growth and risk characteristics. In relative valuation, the objective is to value an asset, based upon how similar assets are currently priced by the market.
Valuation and Assumptions: Based on due diligence and valuation estimates, Company X believes that Company Y's fair share value lies in the EUR 2.70-EUR 3.31 bracket. We have valued the company using the Blended valuation method, with equal weightage to Discounted Cash Flow (DCF) method and EV/EBITDA based valuation. DCF model
A Practical Guide to SAP . 9.1 Introduction to asset accounting 181 9.2 Structure and methodolgy 183 9.3 Different methods of asset acquisition 184 9.4 Asset master record 185 9.5 Asset acquisitions 190 9.6 Retirements with customer 199 9.7 Asset value adjustments 202 9.8 Reverse asset posting 207 9.9 Asset transfers 208 9.10 Depreciation and closing tasks 211 9.11 Asset drill down and .
Classification makes it easier to understand where individual valuation models fit into the big . In the broadest possible terms, stock valuation methods fall into two main categories: absolute and relative valuation approaches. Absolute valuation attempts to find an intrinsic value of the stock based on company's fundamentals, such as .
