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Mergers & Acquisitions: Valuation

Tom Spencer

Valuation of discounted expected future cash flows. If the goal is diversification, then calculating the present value of future cash flows would be appropriate (DCF valuation). Each valuation method will result in a different estimate, and the method you select will depend on the situation.

Cash Flow 109
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Reclaiming the Idea of Shareholder Value

Harvard Business

Properly understood, maximizing shareholder value means allocating resources so as to maximize long-term cash flow. For instance, he states that “When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.”

Cash Flow 121
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Case Math

Tom Spencer

Net Present Value: The NPV of an investment is the present value of the series of expected future cash flows generated by the investment minus the cost of the initial investment. Where r = discount rate; CFt = expected cash flow in year t; CFn = expected cash flow in final year; g = long term cash flow growth rate.

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A Refresher on Payback Method

Harvard Business

There are a variety of ways to calculate a return on investment (ROI) — net present value , internal rate of return , breakeven — but the simplest is payback period. Say, for example, the cash flow for the project was actually $3,000/year in Year 1 and nothing thereafter. A Refresher on Net Present Value.

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Which MBAs Make More: Consultants or Small-Business Owners?

Harvard Business

To keep things simple, we’ll take advantage of our assumptions of no growth and a constant multiple and ignore the actual timing of the cash flows. This leaves us only with the cash flows that occur between the purchase and the eventual sale. In this example, the annual cash flow is $1.5

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Coronavirus & Consulting Offers

Tom Spencer

If the firms don’t have a strong balance sheet, if they foresee a potential cash flow problem, or if they have clients in particularly hard hit industries, I’d be concerned. In addition, learn how to create strategy presentations with PowerPoint, learn new data-driven software programs, or a new foreign language.

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Need Clients Now? 5 Strategies to Quickly Get More Consulting Clients

Consulting Matters

However, there will be times when you have to feel the cash flow pressure and need to find clients.right now! Include a ton of value in your presentation plus a lot of reflection questions to help them see their need for someone like you. Before we get started. Dress to CONNECT (not impress) – be approachable.