Corporate Finance Learning® on LinkedIn: The Valulation Drivers Credits to Bojan Radojicic, give him a follow for… (2024)

Thank you for sharing this valuable insight, Corporate Finance Learning®. Understanding the various drivers of business valuation is crucial in M&A transactions. It's interesting to see that there are over forty drivers, encompassing financial, market-based, sales-related, human resources, organizational, and technological aspects.These drivers provide a holistic view of a company's value and can guide investors and decision-makers in assessing potential investments. Financial drivers, such as cash flow predictability and metrics based on financial statements, help determine the health and stability of a business. Market-based drivers consider factors like industry development and expansion potential, providing insights into future growth opportunities.Sales drivers focused on revenue scalability and sales channel diversification highlight the importance of sustainable revenue streams. Human resources drivers emphasize the significance of developing people, fostering a desired culture, and maintaining a cohesive team. Organizational drivers related to ESG development and industry standards implementation contribute to long-term sustainability.

Maximize the value of your companyCredits to Bojan Radojicic, follow him for more finance insights!~~~~~~~~~Here's the original post:During my involvement in M&A transactions in recent years, I identified more than forty drivers of business valuation.First, we have financial-based drivers. 1️⃣𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗱𝗿𝗶𝘃𝗲𝗿𝘀 are mostly related to the health in the financial history and metrics based on financial statements, cash flow creation and cash flow predictability.2️⃣Then we have 𝗺𝗮𝗿𝗸𝗲𝘁-𝗯𝗮𝘀𝗲𝗱 𝗱𝗿𝗶𝘃𝗲𝗿𝘀 such as total addressable market value and trends, industry development, expansion potential, etc.1️⃣𝗦𝗮𝗹𝗲𝘀 𝗱𝗿𝗶𝘃𝗲𝗿𝘀 are based on revenue scalability, conversion rates, sales channel diversification, etc..4️⃣𝗛𝘂𝗺𝗮𝗻 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 drivers are based on how the company can develop people, implement and maintain wished culture, and keep people together.5️⃣𝗢𝗿𝗴𝗮𝗻𝗶𝘇𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗱𝗿𝗶𝘃𝗲𝗿𝘀 are related to ESG development, ownership involvement, industry standards implementation level, etc.6️⃣And finally, t𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝗶𝗰𝗮𝗹 𝗱𝗿𝗶𝘃𝗲𝗿𝘀 are about security, privacy procession, IP security and transferability.~~~~~~~~~𝗗𝗢𝗪𝗡𝗟𝗢𝗔𝗗 𝗟𝗜𝗡𝗞: https://lnkd.in/d9HqeRuM~~~~~~~~~Valuation - Do It Yourself: This is the name of my new course, launching on April 15th, 2024.Join the waitlist and secure a 70% discount: https://lnkd.in/dK2Vjy6CMeanwhile, be prepared and practice our Finance modeling course: https://lnkd.in/d9ppG_nyHappy practicing!~~~~~~~~~

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In the realm of quantitative finance, the relentless pursuit of profit is an ongoing journey. A pivotal aspect of augmenting your alpha lies in exerting control over the risks you encounter. The term "risk" can often be multifaceted and somewhat ambiguous. To navigate this ambiguity, the prevalent approach involves the utilization of a risk proxy, with variance/covariance being one of the most widely recognized and employed proxies. It naturally manifests itself in frameworks like the Capital Asset Pricing Model (CAPM) and in metrics like the Sharpe ratio, which enjoys widespread usage.However, it's crucial to acknowledge that, like all proxies, variance has its limitations. It lacks the capacity to capture extreme events in the tails of probability distributions, causal effects, and specific risks associated with particular markets or countries, among other factors.Moreover, when you're dealing with an extensive array of assets, accurately computing a covariance matrix can become a formidable challenge. To address this issue, external data sources, such as the Barra dataset, come into play to estimate a proxy for the covariance matrix.Assuming everything proceeds smoothly, one can then optimize for a function that encompasses these various components: risks (market and idiosyncratic), alpha, and transaction costs. This optimization process seeks to strike a harmonious balance between profitability and volatility, ultimately culminating in the identification of an optimal investment strategy.

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Throughout my career i wore multiple hats and i worked so hard to get an exposure to Asset Management, Investment Banking, Private Equity, Sell/Buy Side Investment Research and NBFIs.And one thing became obvious; a universal pain point for every investment company/team, around the globe ...How to get so much done in so little time ... 1) Spreading Financials,2) Performing Financial Analysis,3) Build Forecast Models,4) Conduct multiple valuation methodologies,5) Investment Recommendation,6) Summarize findings in a 10-20 pages investment memo,7) Investors/shareholders updates,(And ofcourse sourcing leads/deals)Drawbacks:- Repeating this cycle successfully 2x per month would be perceived as outstanding for an investment professional.- Investment professionals stuck with repetitive manual work,- Lost time, efficiency and resources.- More time for data crunching, and less time fordeals sourcingThe reality we are building:- Through , investment teams can now fully analyze and dissect 15+ companies same time. - The remaining repetitive tasks, will be streamlined and live soon.Results:- Increased efficiency, & collaboration,- No more Error-prone insights,- Digital Transformation.#finance #investments #FPandA #FinancialPlanningandanalysis #Investmentbanking #Assetmanagement #privateequity #business

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Explore the technology trends for finance industry!👉🏻👉🏻👉🏻 Swipe the document #serkankarahanoglu #techleaders #technology #innovation #finance #technologytrends

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PDF 2016 International Valuation Handbook: Industry Cost of Capital Grabowski, Roger J.; Harrington, James P.; Nunes, Carla digsell https://lnkd.in/eJftTNbVReal-world cost-of-capital data from across industries and around the globe The 2016 International Valuation Handbook – Industry Cost of Capital offers the same type of rigorous industry-level analysis published in the U.S.-centric Valuation Handbook – Industry Cost of Capital. It provides industry-level cost of capital estimates (cost of equity, cost of debt, and weighted average cost of capital, or WACC), plus detailed industry-level statistics for sales, market capitalization, capital structure, various levered and unlevered beta estimates (e.g., ordinary-least squares (OLS) beta, sum beta, peer group beta, downside beta, etc.), valuation (trading) multiples, financial and profitability ratios, equity returns, aggregate forward-looking … Read More » https://lnkd.in/eRgVFMpg

"Accountants come often under debate that they rely too much on historical data and information and this hinders their ability to have foresightedness to see future prospects of any business and individual. Considering business valuation models which have largely been used in the past few decades the reliance was too much on asset values, dividend growth, projected cash flows or share price however little consideration was given to various other factors such as technology adaptability, user acceptance, governance mechanism, compliance readiness, environment friendliness, any patent approvals, its uniqueness in the marketplace, social awareness or management capability."Read more on the given web link:https://lnkd.in/dnYruU8a

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Business valuation is not just another number crunching exercise. It needs to be considered with rationality and holistic approach. #startups #consultingservices #trainingsolutions #careerdevelopment

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Navigating the Complexities of Market and Financial AnalysisIn the ever-evolving world of finance, understanding the dynamics of the market is crucial. Market and financial analysis provides us with the tools to navigate this complex landscape, enabling us to make informed decisions and strategize effectively.Key Points:Understanding Market Analysis:Market analysis investigates the influence of supply and demand on a market1.It guides investment decisions and can motivate an organization to change various aspects of its investment strategy1.The Role of Financial Analysis:Financial analysis is key for anyone trying to figure out the value of an asset2. It involves examining historical data to gain information about the current and future financial health of a company.Current Trends in Market and Financial Analysis:Stay updated with the latest trends and news in the field of market and financial analysis345.The Impact of Technology on Financial Markets:Discuss how technology is reshaping the landscape of financial markets and what it means for future trends.Conclusion:Market and financial analysis are integral parts of strategic planning in any business. By staying informed and understanding these analyses, we can make better decisions and contribute to the success of our organizations.Hashtags:#MarketAnalysis #FinancialAnalysis #Finance #Investment #BusinessStrategy #technology #future

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📢 Hey everyone! Let's dive into some #finance basics in a simple and relatable way! 📊💰and it’s connection to #sixsigma.👉 Ever wondered what "Enterprise Value" means? 🤔 It's a valuation metric used by investors to assess the total worth of a company. 💼💵📈 The "Income Statement" is another important financial tool. It shows a company's #revenue, #expenses, and #profits over a specific period. It gives you a snapshot of how well a company is doing financially. 💸💼⚖️ Now, let's talk about "Valuation Metrics." These are calculations used to determine the value of a company. They help investors understand if a company is overvalued or undervalued in relation to its financial #performance. 📊💰💡 Understanding these concepts can empower you to make informed decisions about investments and businesses. 🌟💼💸How it is related to #leansixsigma ?#leansixsigma by improving Productivity, Quality, Cost, Delivery time, Service - directly improving the cashflow for the company. #free #cashflow is the crux of every Lean Six Sigma project and for the business, at the end. 🌟💼💸#FinanceBasics #EnterpriseValue #IncomeStatement #ValuationMetrics #Investing #BusinessKnowledge Efforts Consulting PC: anonymous internet post

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