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Post 4 - Why does the conventional DCF not work for valuing a start-up/young firm?

Wizenius

Enterprise Value = Forecast EV/Sales * Expected Sales 3) The derived estimated valuation has to be discounted back to present value using a discounting factor. The discounting factor would be typically more compared to the one used in publicly traded firms.

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Methods and Examples on How to Value a Company

Lake Country Advisors

Accurate and appropriate valuation is one of the pillars of maximizing the profits from a business sale. It’s integral to ensuring that the sale benefits all stakeholders and should be one of your priorities before advertising it to potential buyers. First, identify a group of similar publicly traded technology companies.

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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

This approach relies on analyzing the market value of comparable publicly traded companies, known as guideline companies or multiples. By comparing key financial metrics such as price-to-earnings (P/E) ratios, price-to-sales (P/S) ratios, and price-to-book (P/B) ratios, analysts can estimate the target company’s value.

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Mergers and Acquisitions Valuation Strategies: Unlocking the Secrets to Successful M&A Transactions

Sun Acquisitions

Comparable Company Analysis (CCA): CCA involves comparing the target company to similar publicly traded companies. The valuation is based on key financial metrics such as Price-to-Earnings (P/E) ratios, Price-to-Sales (P/S) ratios, or Price-to-Book (P/B) ratios. It involves forecasting cash flows and applying a discount rate.

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Keeping Up with Delaware Appraisal Jurisprudence Since Aruba: Deal Price Reigns Supreme, But Will Recent Decision Lead to More Arbitrage?

Cooley M&A

In the Delaware appraisal decisions that have followed, the court has consistently found deal price (minus synergies) to be the most reliable indicator of fair value, so long as there was a sufficiently robust sales process that bore “objective indicia” of reliability. Panera Bread was a publicly traded company that JAB Holdings B.V.

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Buy Side M&A Blog Series - Vol 7 - Valuing The Target

RKJ Partners

For the purposes of this article, we will focus on valuation from the perspective of a merger and acquisition transaction, and specifically from the viewpoint of a buyer evaluating a business for sale. Essentially, comparable company analysis looks at the value of publicly traded companies.

M&A 40