ValuationModelApplication-InternetCompanyValuation演示教学.pptVIP

The market uses a range of valuation techniques, both bottom-up and top-down.;Each technique brings inherent strengths and weaknesses which are biased toward certain situations. ;Appendix: Internet company valuation techniques;The following approaches illustrate the different valuations of E*Trade.;The traditional discounted cash flow (DCF) valuation relies on reasonably accurate forecasts.;The real options valuation model is relatively new and used to incorporate the benefit and uncertainty of future business opportunities into the overall valuation.;E*Trade’s valuation is particularly high using this technique due to its volatile estimated future cash flows.;The market value / addressable market multiple estimates market value in comparison with a similar company.;Source: (1) /p/d/twe.html as of May 25, 2000 Notes: (2) Merrill Lynch Estimates, AC Analysis. Note in this case the addressable market for E*Trade is the same as that of the comparable company, TD Waterhouse. (3) The market factor is 100% throughout the examples because TD Waterhouse and E*Trade are going after the same market. If they were not, and the market of the comparable company was more attractive, the market factor would be larger than 100%. (4) The company factor takes into account the relative differences between both companies such as size, stage of development, customer base, brand and eCommerce experience (will always be 75% throughout the examples).;The Market value / sales (revenues) ratios are the most widely used valuation tool for eCommerce and Internet opportunities because the data is usually available and reasonably accurate.;Sources: (1) /p/d/twe.html as of May 25, 2000. (2) Bloomberg Note: (3) Average of Sales in Current Year (CY) + 1 and (CY) + 2; from SSB 4/20/00, Equity Research.;The price / earnings ratio is the most widely accepted tool for valuing companies, however the difficulty with most eCommerce ventures is that they do not generate earnings during startup.;S