From the course: Financial Modeling Foundations
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Financial valuation models - Microsoft Excel Tutorial
From the course: Financial Modeling Foundations
Financial valuation models
- [Instructor] Business valuation is a common task in the investments world, and a financial model is the typical approach to handling issue. In this video, we'll talk about an overview of how valuation models work. Now a valuation model uses expected cash flows, along with a discount rate and a terminal value, to compute valuation on an asset. This could be anything from a particular investment project to an entire company, so when we're talking about project finance, that is a company looking at investing in a specific new asset, be it a new factory as an example, a new piece of equipment, a new, R & D project. Valuation models are useful in that scenario. If we're looking at evaluating the value of a company as a whole, valuation models are also critical. The same parts and pieces, the expected future cash flows, the discount rate and the terminal value apply to any type of valuation that we're going to do. The specifics will defer of course, but those are the core parts in the…
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