Integra International

Transcription

1 Integra International BUSINESS VALUATION KNOWLEDGE CENTER - A SHORT & PRACTICAL INTRODUCTION - 1

2 BUSINESS VALUATION WHAT IS IT FOR YOU... AND... FOR ME MAKE UP YOUR MIND? 3

3 Practicing BUSINESS VALUATION - What you should know, study and master? It is a mixture of all things you learned and of all things you will have to learn, be it at a professional level or at a personal level. It is applicable to all that is small and all that is big. It is often easy and straightforward and sometimes difficult and complicated. It is part mathematics, part statistics, part micro and macro economics, part tax related, part audit related, basic bookkeeping and accounting skills are important as well (to understand accountant s speech ). It is not local, nor limited to any particular region or country, instead it is global. Its use is not limited to any language. Business valuation being part Art and part Science, you should use sound judgment; The valuator needs to be professionally mature and skillful. It is constantly on the move or being renewed. It is a fascinating PROFESSION and hot growth niche. 4

4 WHAT IT IS AND WHAT IT IS NOT? 6

5 BUSINESS VALUATION - What IS it and What is it NOT - A few statements? The value of a business does not equal its price (price is entirely in the eyes of the beholder, e.g. valuing FACEBOOK based on the euphoric pricing of LINKEDIN). Valuing is peering into the (uncertain) future and is based on expectation (cash flows, growth and risk). The economic value of a company is based on the discounted value of future (economic) income streams (so called free cash flows ). Free cash flows are based on future operational income streams, i.e. money earned based on operational activities. The economic value of an (income producing) asset has not necessarily a relation to the net book value of that underlying asset. The net book value of an asset is purely based on arbitrary accounting rules and relies on historical acquisition costs or replacement costs. 7

6 A RESEARCH TOOL BASED ON THE DROPBOX CLOUD PLATFORM 9

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8 TO SUMMARIZE... A WORLDWIDE OPEN PLATFORM AT NO CHARGE INCLUDED IN YOUR MEMBERSHIP AVAILABLE 7/7 and 24/24 11

9 A Short History & Availability An idea created in Dublin - November It acts as a SIG = Special Interest Group within our Worldwide Alliance. It is available for free as a subscription to all members. By personal invitation & approval only. Based on the free DROPBOX software platform ( 12

10 IN SHORT: YOU GET... A COMPETITIVE RESEARCH & KNOWLEDGE TOOL THE VERY FIRST IN ITS KIND! 13

11 Purpose & Learning Objectives? To differentiate our Worldwide Alliance from others. To add value to our membership worldwide. To teach new professional skills. To focus on a new worldwide growing market niche speciality, with great added value potential. As a tool and help to grow your practice. 15

12 Format and Practical Use For research, educational & learning purposes only. Closed environment to avoid copyright issues and NOT for commercial purposes. Updated almost daily. New: multilingual documents uploaded. Presently (June 2011) > 340 folders, approaching 2,000 documents & essential papers on 1,2 gigabyte server capacity. Organized and monitored by Johan de Mey, Antwerp, Belgium - johan@affiniti.be. 16

13 Structure of the (DropBox) Data Base - What do you get? High value topics and articles. Landmark documents and academic papers. Industry focus. Daily In the News articles. 17

14 How to Use the (DropBox) Data Base? Mail me, get approved, subscribe. Peruse regularly the DropBox menu Recently Changed Files. Access the available directory/folders or files and do a Search. 18

15 EXAMPLES AND MORE... 19

16 General Overview 20

17 High Value 21

18 Data Base Examples: High Value ARTICLES (1) 22

19 Data Base Examples: High Value ARTICLES (2) 23

20 Data Base Examples: Landmark DOCUMENTS 24

21 Data Base Examples: Industry Focus 25

22 Important & Actual Valuation Topics Know the Business: study the market, the business concept, the business value drivers & the business plan (4 years back & 5 years ahead), study Cash Flow (money streams). Put your binoculars on for a thorough Ratio Analysis (e.g. comparable companies & transactions). What is risk free (are the PIIGS and others risk free)? Study Risk & Distress (Altman Z-Score, e.g. Total Debt/ EBITDA ). Do a thorough Build-Up, i.e. SWOT analysis. Study the company s long term growth potential to compute Terminal Value (caveat: an excessive growth projection is KILLING). BE CONSISTENT, EXPLAIN & DO SENSITIVITY! 27

23 We expect feedback from ALL of YOU Individual feedback needed to improve this new free service is much appreciated: what should we change or add to the content? A s s i s t a n c e n e e d e d? M a i l m e a t johan@affiniti.be or call me at (landline = UTC/GMT + 1 hour). Other questions and ideas? 28

24 Integra International BUSINESS VALUATION KNOWLEDGE CENTER - THANK YOU - 29