Valuation and Creating Sustainable Value
4 – 5 hours per week
Even in a not-so-business like context, it is not uncommon to hear mentions about the market value of a company. We often come across information along the lines of “Apple is worth more than a trillion dollars,” and might also wonder how a company or firm’s value is decided.
Moreover, with large corporations acquiring smaller companies for a fixed price, it is even intriguing to see how such a price valuation is carried out. For example, Microsoft paid $26 billion for acquiring LinkedIn and Facebook acquired WhatsApp for $19B.
Valuation is an important aspect of Finance. This IIMBx course explores, in depth, the various nuances and techniques of valuation. While the first half of the course focuses on how value is measured, the second half discusses the ways in which companies can create sustainable value for themselves and examines the various factors that influence the valuation of a company.
This course has been designed for graduate students and working professionals who wish to understand the concepts of valuation and value creation. It will demystify the various techniques, terminologies and introduce concepts in manageable bite-size that will help anyone build their competency in the subject.
The course explores the subject in a simple way with the help of video lectures, real company analysis, reading materials, examples, an explore-and-learn section, expert interviews, discussions forums as well as assessments to check the learners’ understanding. One need not have a background in Finance; just come armed with enthusiasm and curiosity.
Week 1: Introduction to Value
This week will introduce you to the concept of value.
In this week, you will:
- Understand the concept of value & valuation
- Identify the importance of valuation
- Explore the financial statements and accounting ratios (in brief)
- Learn the concept of Time Value of Money
- Describe the framework of valuation
- Learn the Dividend Discount Model
Week 2: Methods of Valuation
In this week, you will learn the different methods of valuation and apply the concept to real companies.
- Learn the Discounted Cash Flow Method of Valuation
- Calculate enterprise value and equity value
- Apply the method to value real-life companies
- Gain insights from experts
Week 3: Methods of Valuation
You will explore the other methods of valuation.
- Learn valuation using multiples
- Identify and calculate the different multiples
- Apply the multiples to value firms
- Understand the basics of start-up valuation
- Familiarize to the concept of creating sustainable value
Week 4: Drivers for Creating Sustainable Value
You will explore the different drivers for creating sustainable value
- Understand the concept of strategy and its role in value creation
- Describe the importance of operational efficiency for value creation
- Explain the importance of managing human capital for value creation
- Gain insights from experts
Week 5: Drivers for Creating Sustainable Value (contd)
In this week, you will identify the other drivers for creating value
- Define strategic investing and financing decisions.
- Learn the capital budgeting techniques
- Describe the concept of leverage
- Explore corporate governance and its role in creating value for the company
After completing this course, learners should be able to:
- Explain the different techniques of valuation
- Apply the valuation methods to find the value of real companies
- Explain the fundamental concepts, myths, and factors underlying valuation
- Identify the key value drivers for valuation
- Explain the role of different value drivers in creating value for the company
- Professionals from non-finance background
- Students pursuing graduate and postgraduate program
- Mid-level managers interested in understanding about the different valuation techniques
- Administrators and Executives who are keen to learn the valuation process and apply their learning for better decision making