Sources of information for capturing the business model of a company
Course Content
0 / 120 completedWhat will we learn in this module
Valuation framework - Step 2 Historical financials
Valuation framework - Step 1 Business model
Valuation framework - Step 4 Valuation technique
Valuation framework - Step 3 Forecast financials
Valuation framework - Step 5 Valuation sensitivity
Valuation as an art and science
Valuation in the context of a real company
Different schools of thought in valuation of companies
Application of valuation analyst skills
What is valuation
Course overview
Business model - Costs
Business model - Products
Business model - Operations
Business model - Financing
Business model - Strategy
Sources of information for capturing the business model of a company
Walmart business model - Products
Downloading Walmart annual report
Walmart business model - Cost
Reading through Walmart annual report
Walmart business model - Operations
Walmart business model - Financing
Walmart business model - Strategy
The three key financial statements of any company
The typical structure of an income statement of a company
The typical structure of a balance sheet of a company
Sources of information of the historical financial statements
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The typical structure of a cash flow statement of a company
Capturing Walmart's historical financial statements from Annual Report
Standardized income statements - contd.
Understanding minority interests
Standardized income statements
Standardized balance sheet
Capturing Walmart's balance sheet
Capturing Walmart's income statement
Conclusion
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The five steps to forecasting the financial statements
Calculating depreciation rate and interest rate for Walmart
Calculating effective tax rate and minority interests for Walmart
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Cash flows statement in Walmart Annual Report
Calculation of AR, Inventory, PPE and AR ratio for Walmart
Calculating revenue growth, COGS margin and SGA margin for Walmart
Calculating the borrowings and dividend payout ratio for Walmart
Extrapolating the Depreciation rate for Walmart
Extrapolating the COGS margin and SGA margin for Walmart
Extrapolating Interest rate, Effective Tax rate & Minority Interest for Walmart
Extrapolating AR, Inventory, PPE and AP ratio for Walmart
Extrapolating short term Borrowings for Walmart
Extrapolating the Revenue growth rate for Walmart
Extrapolating long term Borrowings for Walmart
Extrapolating Dividends for Walmart
Forecasting future financial statements of a company
Forecasting the Revenues for Walmart
Forecasting Depreciation and EBIT for Walmart
Forecasting COGS, Gross Profit and SGA for Walmart
Forecasting Interest expense and EBT for Walmart
Forecasting Taxes, Minority interests and Profits for Walmart
Forecasting Inventory, AR and other Current assets for Walmart
Lecture 79 Forecasting Fixed Assets, Goodwill and Other Long term Assets
Forecasting short term Borrowings for Walmart
Forecasting AP and other current liabilities for Walmart
Forecasting Long term borrowings and other liabilities for Walmart
Forecasting Minority interests for Walmart
Forecasting Common Equity for Walmart
Quick Recap of what we have learnt so far
Cash flows statement of any company
Non-cash costs in Cash flow from Operations of Walmart
Non operating expenses in Cash flow from Operations of Walmart
Current operating liabilities in Cash flow from Operations of Walmart
Current operating assets in Cash flow from Operations of Walmart
Calculating Cash flow from Operations of Walmart
Cash flow from Investments
Calculating cash flow from Investments of Walmart
Capital expenditures for Cash flow from Investments of Walmart
Borrowings to be repaid in Cash flow from Financing of Walmart
Interest & Borrowings to be repaid in Cash Flow from Financing of Walmart
Dividends and Share buy back in Cash flow from Financing of Walmart
Calculating Cash flow from Financing of Walmart
Calculating end of year Cash balance of Walmart
Linking the Cash flows statement with Balance sheet
What are we trying to estimate when we say valuation
The two important valuation equations
Understanding FREE CASH FLOWS in DCF technique
Understanding operating cash profits
Understanding operating cash investments
Understanding the discount rate
Free cash flows are calculated for the future
Understanding DISCOUNTING in DCF technique
Understanding the present value of explicit cash flows
Understanding terminal value
Understanding enterprise value and equity value
What have we learnt so far in this course
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Calculating post tax Operating profit and Operating cash profit of Walmart
The 5 steps to undertaking the valuation analysis of a company
Calculating Earnings Before Interest & Taxes (EBIT) of Walmart
Calculating Capital expenditures of Walmart
Calculating the Free Cash Flows to Firm (FCFF) of Walmart
Calculating total operating cash investments of Walmart
Calculating Working capital of Walmart
Understanding the concept of DISCOUNTING
Calculating Weighted Average Cost of Capital (WACC) of Walmart
Calculating the terminal value or perpetuity value of Walmart
Calculating the terminal growth rate of Walmart
Calculating the Enterprise value (EV)
Calculating the present value of FCFF of Walmart
Calculating the value of Minority Interests of Walmart
Calculating the consolidated Equity value of Walmart
Calculating the Equity value per share of Walmart
Calculating the gap in Equity value per share vs current price of Walmart
Implications of the valuation estimate
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Making the right assumptions
Calculating the valuation sensitivities to changes in important model inputs
Quick Recap