Qt Analysis

Group FAnimesh Agarwal -2012PGP009Apoorvaa P. -2012PGP017Arnab Mandal -2012PGP018Chandrasekhar Susarla -2012PGP025Karttik Mishra-2012PGP043Neha Gupta -2012PGP047Sourabh Kothari-2012PGP054 |

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| FM-II Project -Phase 1 submission |

| FM-II Project -Phase 1 submission |

Comparing valuations techniques across various industries

Introduction

For anyone involved in the field of corporate finance, understanding the mechanisms of company valuation is an indispensable requisite. This is not only because of the importance of valuation in acquisitions and mergers but also because the process of valuing the company and its units helps identify sources of economic value creation and destruction within the company.

In this project, we discuss the most widely used company valuation methods: balance sheet-based methods, income statement based method, mixed method, and cash flow discounting-based methods. The methods that are conceptually “correct” are those based on cash flow discounting. We will briefly comment on other methods since- even though they are conceptually “incorrect”- they continue to be used frequently.

Almost a complementary question for any student of valuations is- “Are different business valuation methods used to value companies in different industries?” It is a very sensible question – after all the differences between, say, a manufacturing firm and a dental practice are profound.

Objective of the project

The following are the objectives of the project:

·         To analyse the different valuations techniques used

·         To determine which is the most appropriate valuation technique for different industries by benchmarking our valuation with market valuations

·         To determine most appropriate valuation technique for companies that are not listed

Methodology

We would be applying the different methods of valuations on at least two companies from various industries and benchmark it with market valuations so...