Valuation Templates and Excel Models
Browse CFI Marketplace for the best collection of Valuation Templates. Download the Excel files and use existing examples from finance professionals to take your analysis to the next level.
What is Valuation?
Valuation is the process of finding the present value of an asset or business. Asset valuation can be done on things such as stocks, bonds, options, properties, machinery, and land. Business valuation can be performed by evaluating various aspects of a business including the prospective future earnings, the company’s debt to equity ratio (capital structure), and market value of assets.
Valuation can also be used to determine the fair share value of a company’s stocks. While the market value of a stock (current share price) is available to investors, the intrinsic value (or book value) is critical for valuing the security based on expected future earnings and other factors not being reflected in the market value. The purpose of performing valuation on a stock is to help analysts determine if a company is undervalued or overvalued by the market. This would require a valuation model which lays out all the assumptions and factors influencing the business.
Beside pricing a security, valuations are also commonly used in various transactions (mergers and acquisitions, leveraged buyouts), investment analysis, financial planning and reporting, and litigation. Use the available valuation templates in the marketplace created by industry professionals to start performing valuation!
There are three main types of valuation method widely used in valuing a business or an asset:
- Discounted cash flow analysis (DCF): DCF analysis is an intrinsic value approach to valuing a business by forecasting unlevered free cash flows (FCFF) into the future and discounting them at the company’s weighted average cost of capital (WACC). This approach requires the most assumptions out of the three methods and is preferred because it provides a more accurate valuation.
- Comparable company analysis (Comps): Comps analysis, also referred to as peer group analysis or trading multiples, is a relative valuation method which compares the current value of a company to similar companies in the same industry. This method values company by taking the trading multiples such as P/E, EV/EBITDA and EV/Revenue.
- Precedent transactions analysis (Precedents): Precedents analysis is a relative valuation technique which looks at previous similar transactions (such as a merger or an acquisition) in the same industry. This type of valuation usually takes in account the take-over premium in the price. Because the transaction data becomes outdated and does not necessarily reflect the current market conditions over time, it is the least preferred method out of the three.