Accounting and Finance
Valuation of Companies and Cash Flow Generating Assets
Module code: N1591
Level 6
15 credits in autumn semester
Teaching method: Lecture, Seminar
Assessment modes: Coursework, Unseen examination
This module offers a comprehensive exploration of company valuation techniques, equipping you with practical skills to analyse and assess businesses in today's dynamic market. It focuses on three primary approaches:
- intrinsic value (DCF, DEP, APV)
- relative value (multiples)
- contingent value (decision trees, real options).
A primary emphasis is placed on Discounted Cash Flow (DCF) analysis, which involves estimating a company’s future cash flows and discounting them to their present value.
The module also highlights the importance of selecting accurate data and understanding model limitations to enhance valuation accuracy.
You will delve into analysing a company’s operating environment, value drivers and the challenges associated with valuation in practice. Through case studies and practical exercises, you will develop a step-by-step Excel-based valuation model.
The module's learning objectives are directly applicable to various corporate roles, including private equity, consulting, corporate finance, equity analysis, mergers and acquisitions, and IPOs. By completing this module, you will gain the skills and knowledge necessary to contribute effectively to these fields.
Module learning outcomes
- Critically evaluate the fundamental drivers of value and the main valuation approaches.
- Identify the inputs required by the various approaches, and be able to estimate them.
- Distinguish among various types of situations/firms, and be able to select the most appropriate input data and valuation approach.
- Systematically understand the key aspects of debt finance