Cover image for Corporate valuation : an easy guide to measuring value
Corporate valuation : an easy guide to measuring value
Frykman, David.
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Publication Information:
London ; New York : Financial Times Prentice Hall, [2003]

Physical Description:
xii, 191 pages : illustrations ; 25 cm
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HG4028.V3 F79 2003 Adult Non-Fiction Non-Fiction Area

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If organisations are to achieve the ultimate corporate goal of maximising shareholder value, then understanding valuation is vitally important. Yet the majority of managers have ignored the area of corporate valuation for a long time, despite the fact that a firm's value is the ultimate measurement of the health and prosperity of a company. In Corporate Valuation, for the first time, you are given insight into the most universal issues in corporate valuation. It tackles the most commonly used valuation methods in a quick and easy - yet comprehensive - way, and is the perfect and only book you need if you want to get a quick grasp of the subject.

Author Notes

David Frykman

currently works for Swedbank Markets, the investment bank arm of Sweden´s largest commercial bank.

David Frykman and Jakob Tolleryd first wrote about valuation in their academic work at Stockholm School of Economics. In 1999, they published the book "Valuation of Growth Companies ¿ methods and models for valuation of growth companies".

Table of Contents

About the authorsp. vii
Preface--reading guidep. ix
Acknowledgementsp. xiii
Publisher's acknowledgementsp. xiv
1 Introductionp. 1
2 Presentation of model companyp. 7
3 When do you need to value a company?p. 11
Raising capital for growthp. 12
Creating an incentive programme to keep and attract employeesp. 16
Executing a merger, acquisition or divestiturep. 18
Conducting an initial public offering (IPO)p. 21
Summaryp. 23
4 Company valuation--an overviewp. 25
Theoretical overviewp. 26
The most important valuation modelsp. 29
What models to use?p. 40
Summaryp. 42
5 Ratio-based valuationp. 45
Classification of multiplesp. 46
Finding your multiplep. 50
Different multiplesp. 55
How to find input data for multiple valuationsp. 66
Summaryp. 66
6 Discounted cash flow valuationp. 69
Estimating the cost of capital--WACCp. 72
Calculating free cash flowp. 78
Computing terminal valuep. 82
Discounting and final corporate valuep. 84
The most important variables in a DCF analysisp. 87
The DCF approach--only a calculation machinep. 88
Checking your assumptionsp. 89
Summaryp. 90
7 Underlying analysis and key value driversp. 93
What is a value driver?p. 94
How to identify key value driversp. 96
Structuring the underlying analysisp. 97
Generic operational value driversp. 102
Framework for the underlying analysisp. 107
Temporary monopolies--an additional tool for the underlying analysisp. 108
Summaryp. 115
8 How to value your company in practice--an examplep. 117
Underlying analysis of Mobitronicsp. 120
DCF valuation of Mobitronicsp. 125
Scenario analysisp. 139
Checking the underlying assumptionsp. 140
Multiple-based valuation of Mobitronicsp. 145
Piecing it all together--the value of the companyp. 151
Summaryp. 152
9 Value-based managementp. 155
Strategy developmentp. 157
Target settingp. 158
Action plans, budgets and trainingp. 160
Incentive programmesp. 160
Outcomes of value-based managementp. 163
Summaryp. 165
Afterwordp. 167
Appendix A Inspirational list of key value driversp. 168
Appendix B Suggested information needed for a valuationp. 171
Notesp. 180
Glossaryp. 181
Further readingp. 184
Indexp. 187