DCF valuation for companies
Based on the company’s financials, we prepare pre-money discounted cash flow analyses to determine the enterprise and equity values of the company. This type of analysis includes forecasting for the upcoming three to five years of cash flows, based on the actuals provided and the management’s expectations, with additional modeling to determine the terminal value beyond the forecasted period, and the derivation of an appropriate discount rate. Results of this type of analysis are the estimated equity value of the company, and the accompanying fair market value per share.
Scenario analysis for share-class valuation
Based on the management’s expectations regarding the exit value of the company, we construct a scenario analysis to determine the net present value (NPV) of the specific class of shares in question. The analysis includes a sensitivity model for the NPV of the shares under a specific exit scenario, and a probability-weighted scenario analysis which considers the individual likelihoods of different exit scenarios to calculate the payoff of individual shares. These models can also be augmented with a separate sensitivity analysis on the discount rate as well. Results of this type of analysis are the expected payoff and NPV of a single share.