Valuation of Specific Types of Companies


Valuation is all about exceptions, and these spreadsheets are designed to help value specific types of companies including:

Financial Service firms: While dividend discount models tend to be the weapon of choice for many, you will find an excess equity return model here.
• eqexret.xls - Estimates the value of equity in a bank by discounting expected excess returns to equity investors over time and adding them to book value of equity.

Troubled firms: You will find an earnings normalizer spreadsheet, a generic valuation model for valuing a firm as a going concern and a spreadsheet that allows you to estimate the probability that a troubled firm will not survive.
• normearn.xls - Normalizes the earnings for a troubled firm, uising historical or industry averages.
• distress.xls - Estimates the likelihood that a troubled firm will not survive, based upon bond ratings as well as bond prices.
• fcffneg.xls - Generalized FCFF model that allows you to value negative earnings firms as going concerns.

Private companies: You will find spreadsheets for adjusting discount rates and estimating illiquidity discounts for private companies.
• pvtdiscrate.xls - Adjusts the discount rate (cost of equity) for a private firm to reflect the lack of diversification on the part of the owner (or potential buyer)
• liqdisc.xls - Estimates the illiquidity discount that should be applied to a private firm as a function of the firm's size and financial health. Uses both restricted stock approach and bid-ask spread regression.

Young and high-growth firms: You will find a revenue growth estimator as well as a generic valuation model for high growth firms in this section.
• revgrowth.xls - Estimates compounded revenue growth rate for a firm, based upon market share and market size assumptions.
• higrowth.xls - This spreadsheet can be used to value tough-to-value firms, with negative earnings, high growth in revenues and few comparables. If you have a young or start-up firm, this is your best choice.
Subjects: Finance, Spreadsheets
Source: Damodaran Online (visit original source)  
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