Negotiation Based Valuation Approach

There are various methodologies that are used in the real world to value any company.

Some of them are highly complex and technical like the Discounted Cash Flows approach, while some are simple but not very technical like the Multiples valuation approach.

There are also other methodologies like the Sum of the Parts valuation, Regression based approach,

Minority Interests vs Minority Investors

If you have ever looked at the Balance sheet of large companies, you would often find this line item Minority Interest on the liabilities section.

They look something like below:

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Valuation Fundamentals

As a financial/business/valuation analyst, many times we have to spend a considerable amount of time trying to find the VALUE of companies.

There are many different aspects of value – different terms get used synonymously and often causes a lot of confusion.

Weighted Average Cost of Capital

When we want to do valuation of any company using the Discounted Cash Flows valuation, we need to calculate a cost of capital.

The cost of capital is simply the expected return that investors (both debt and equity) 

Pre-money vs Post-money valuation

As an Entrepreneur, you often have to negotiate on your company valuation.

This is especially true when you are looking to raise new funding from investors.

To get your funding, you need to mutually agree on the potential valuation of your company.