A critical guide to corporate valuation modeling. Valuation is at the heart of everything that Wall Street does. Every day, millions of transactions to purchase or sell companies take place based on prices created by the activities of all market participants. Corporate Valuation Modeling takes you step-by-step through the process of creating a powerful corporate valuation model. Each chapter discusses the theory of the concept, followed by Model Builder instructions that inform you of every step necessary to create the template model. Many chapters also include a validation section that shows techniques and implementations that you can employ to make sure the model is working properly.

• Walks you through the full process of constructing a fully dynamic corporate valuation model
• A Tool Box section at the end of each chapter assists readers who may be less skilled in Excel techniques and functions

Complete with a companion CD-ROM that contains constructed models, this book is an essential guide to understanding the intricacies of corporate valuation modeling.

The following discrepancies and errata have been reported in earlier versions of the text. Later versions may have these issues edited out. If you discover any yourself please forward them to info@enstructcorp.com.

p.48: Typo in cell D35, enter the following formula:  =C46/AVERAGE(C39:C45). Should read: In cell G46, enter the following formula:  =C46/AVERAGE(C39:C45)

p.190:  The free cash flow to the firm calculation is missing the intangible acquisition costs.  On the DCF sheet, after row 11 a row should be inserted called Intangible Acquisition Cost.  This is a cash expenditure item that reduces cash.  The formula should reference the Intangible sheet where the intangible acquisition cost is calculated.  The Free Cash Flow to the Firm calculation that was in row 12, which would be row 13 after inserting a row, needs to be adjusted so it includes the new reduction to FCFF.

p.204  The cost of debt calculation is missing a reference, which causes an incorrect cost of debt to be calculated.  The final formula should read:

=IF(E2=”TV Year”,inputs_LTCostofD,IF(SUM(’Balance Sheet’!D31,’Balance Sheet’!E31,’Balance Sheet’!D35,’Balance Sheet’!E35)<=inputs_Precision,0,((E16*AVERAGE(’Balance Sheet’!D31:E31)+(Debt!E16*Debt!D53)+(Debt!E26*Debt!D54)+(Debt!D36*Debt!D55))/(SUM(Debt!D53:D55)+AVERAGE(’Balance Sheet’!D31:E31)))*(1-E6)))