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    Valuations With No Fuss: With No Fuss, #1
    Valuations With No Fuss: With No Fuss, #1
    Valuations With No Fuss: With No Fuss, #1
    Ebook190 pages1 hour

    Valuations With No Fuss: With No Fuss, #1

    By Olusegun Oyekanmi

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    About this ebook

    Targeted to students of business studies at both undergraduate and postgraduate levels, Valuations With No Fuss brings together some of the most common valuation methodologies most likely to be encountered. This book will help the business studies student understand these concepts.

    Divided into seven chapters, Valuations With No Fuss will help in the following way: 
    Learn about methodologies such as Real Options, Goodwill, Discounted Cash Flow, and Value Creation
    Provides a simple approach to all methodologies
    Informs the student where to get the variables for calculating the different valuation methods
    Uses simple case studies in some sections to enhance student understanding
    Shows all calculations clearly and in detail
    Helps students use this book as a reference

    If you are looking to gain an understanding of the most common valuation methodologies without doing the mindless exercises given in some books, look no further than this book. 

    LanguageEnglish
    PublisherNosaDigital
    Release dateMay 14, 2018
    ISBN9781614308003
    Valuations With No Fuss: With No Fuss, #1

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      Book preview

      Valuations With No Fuss - Olusegun Oyekanmi

      COPYRIGHT

      VALUATIONS WITH NO Fuss Copyright © Olusegun Oyekanmi 2012

      All rights reserved. No part of this book shall be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the publisher. No patent liability is assumed with respect to the use of the information contained herein. Although every precaution has been taken in the preparation of this book, the publisher and author assume no responsibility for errors or omissions. Nor is any liability assumed for damages resulting from the use of the information contained herein.

      August 2012

      ISBN: 9781614308003

      Trademarks

      All terms mentioned in this book that are known to be trademarks or service marks have been appropriately capitalized. NosaDigital cannot attest to the accuracy of this information. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.

      Warning and Disclaimer

      Every effort has been made to make this book as complete and as accurate as possible, but no warranty or fitness is implied. The information provided is on an as is basis. The author and the publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this book.

      For more information, please contact NosaDigital via email: info@nosadigital.com

      DEDICATION

      THIS BOOK IS DEDICATED to my older brother, Dr Yomi Oyekanmi for his unflinching support. May God continue to bless you; Amen.

      FROM THE AUTHOR

      FOR THOSE OF YOU WHO have sat in a business studies class, valuation methodologies are very important. However, if you have not had the pleasure of having a finance background, you might find that understanding the concepts such as valuation methodologies quite challenging. Speaking from a personal experience, as simple as the concepts might be, it looked like rocket science! I also know that many a colleague struggled.

      The most telling evidence for this came when it was time to select our elective courses. Most of my colleagues selected supply chain management, operations management, and project management. They did everything possible to avoid corporate finance and other financial courses. In my case, I could not avoid corporate finance, as this was something I needed to enhance my skills. On the first day of the corporate finance class, the professor noticed how sparse the class was and commented in a disparaging manner (which I will not bother to repeat).

      Surprisingly, I enjoyed his class as he made it very interesting but I had a nagging question at the back of my mind – how would I survive and pass this elective? Many of you might wonder why I worried about this, after all you got this far, surely, you can go the rest of the way. Besides you passed all the prerequisite courses for corporate finance, so what is the problem here? My frustration knew no bounds.

      I must say that I did not get back on track until much later in the course.  This came with roughly two and a half months to our final exams! The secret – understand the different valuation methodologies and where to find the figures required from the different financial pages. When I finally got it, I knew that our lives could have been made easier by a little more effort.

      This book is a presentation of that process. I hope you find it useful and that you will enjoy it. I also hope that if you like it so much, you will send word to everyone you know so that they can also share this experience.  

      Olusegun Oyekanmi (Jan 2010).

      PREFACE

      BEFORE ESTABLISHING Nosa Capital (http://nosacapital.com), Olusegun Oyekanmi worked in several areas of technology, which included the pharmaceutical, the medical laboratory, and the cosmetics industries. For about a decade, Olusegun worked for Coates Lorilleux International as a Chemist managing the production and quality assurance facilities for varnishes. He later moved into the IT industry in 1999 becoming the Wireless Business Manager for Gavoa Ltd, a web, WAP, and online advertising organisation.

      In 2001, he became an IT consultant running his own firm and specialising in XML technologies. He immigrated to South Africa in 2004 where he joined Ixixa Investments as Regional Manager. The following year, he gained admission into the University of Pretoria where he graduated with an MBA in General Management with a research focus on the mobile phone industry. Olusegun also holds a BSc in Computing and a Higher National Diploma (HND) in Chemistry.

      COVERAGE

      THIS BOOK IS DESIGNED to cover most, but not all, valuation methodologies. It is not an exhaustive coverage of the topic of valuation. Many more books cover the topic in a more comprehensive manner. In terms of background or prerequisites, there is an assumption that you, the reader, has some familiarity with basic algebra and has had some contact with some of the valuation methodologies presented. You the reader are probably a student of business studies, maybe an MBA student who does not come from a financial background and needs some assistance.

      Although this is not a book for an average beginner, anyone can follow the steps needed to get the valuation done. Readers must take into account that this book does not look at the virtues or faults of the different valuation methodologies. This book is strictly an academic exercise to help the reader understand valuation calculations for use in the classroom, and possibly examinations. It also does not discuss the pros and cons of the methodologies but concentrates on showing you how to use these different methodologies when the need arises.

      The book starts with a definition of what valuation is and how it came about. After this, we look at the different types and categories of valuation. For this discussion, we will concentrate on the following categories: balance sheet, income statement, goodwill, cash flow discounting, value creation, and options. The next few chapters explain the approach to the different methodologies. After the discussion on the methodologies, we then discuss the factors and affecting and influencing the valuation process.

      To help with the process of understanding, an income statement, balance sheet, and a cash flow statement is provided. All calculations will be shown and it is hoped that these calculations will give the reader a better understanding. There are no excel spreadsheets, as the students will be calculating by hand in an examination.

      CHAPTER 1 WHAT IS VALUATION

      1.1 INTRODUCTION

      VALUATIONS ARE ONE of the core concepts of corporate finance. This book does not provide an exhaustive coverage but is designed to simplify the concepts of valuation methodologies. In terms of background or prerequisites, there is an assumption that you the reader has some familiarity with basic algebra and has had some contact with some of the valuation methodologies to be presented. You the reader are probably a student of business studies, maybe an MBA student who does not come from a financial background and needs some assistance.

      Although this is not a book for an average beginner, anyone can follow the steps needed to get the valuation done. Readers must also take into account that this book does not look at the virtues or faults of the different valuation methodologies. This book is strictly an academic exercise to help the reader understand valuation calculations for use in the classroom and possibly examinations.

      The book starts with a definition of what valuation is and how it has come about.  After this, we look at the different types and categories of valuation. For this discussion, we will concentrate on the following categories: balance sheet, income

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