Business Valuation Methods

obligatory courses

Classroom

The main objective of the course is to provide students with advanced knowledge and skills in the field of business valuation. During the course, the student will learn the assumptions, principles, functions, regulatory frameworks and methods of valuing business entities, as presented in the literature and commonly applied in business practice. The content of the course will be especially useful for students who plan to pursue careers in business consulting, corporate finance, investment banking and private equity institutions.

1. Foundations of Value - Definitions and Premises of Value

2. Universal Principles and Standards of Value

3. Accounting and Non-accounting Sources of Information Used in a Business Valuation

4. Introduction to Core Valuation Methods

5. Assets based valuation approach - Types of Methods, Structure, Advantages and Disadvantages, The Scope of Application

5.1 Book Value Method

5.2 Adjusted Net Asset Method (Adjusted Book Value Method)

5.3 Replacement Method

5.4 Liquidation Method

6. Use of Discounted Cash Flow (DCF) Valuation Approach

6.1 Estimating Cash Flows (FCFF, FCFE)

6.2 Estimating Discount Rates (Cost of Capital)

6.3 Estimating DCF and Residual Value

7. The Market Approach ( Valuation Using Multiples)

8. Mixed-Valuation Approaches

1. Panfil Marek, Szablewski Andrzej red. (2011), Wycena przedsiębiorstwa . Od teorii do praktyki., Wydawnictwo Poltext,

2. Szablewski Andrzej., Tuzimek Rafał. (2008), Wycena i zarządzanie wartością firmy. Poltext, Warszawa

3. Szczepankowski Piotr (2007), Wycena i zarządzanie wartością przedsiębiorstwa, Wydawnictwo Naukowe PWN, Warszawa

4. Aswath Damodaran (2016), Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, John Wiley & Sons,

After completing the course:

In terms of knowledge, the student:

• is familiar with research methodology and terminology related to business valuation (S3_W01) (K_W01).

• has an advanced understanding of the principles, procedures, and practices of business valuation (S3_W02) (K_W02).

• comprehends economic theories and models related to business valuation (S3_W01) (K_W03).

• recognizes technological, social, political, legal, economic, and ecological processes and phenomena and understands how they affect business valuation (S3_W05) (K_W05).

In terms of skills, the student:

• is able to apply economic and financial theories, as well as complementary disciplines (management, quality sciences, legal sciences), to create financial projections necessary for valuation processes (S3_U01) (K_U01).

• can accurately interpret technological, social, political, legal, economic, and ecological processes and their impact on business valuation (S3_U02) (K_U02).

• is capable of independently and collaboratively preparing analyses, diagnoses, and reports related to business valuation (S3_U03) (K_U03).

• can plan and organize their own and team's work in the preparation of valuations (S3_U04) (K_U05).

• possesses the ability to engage in self-directed learning and enhance their acquired skills (S3_U05) (K_U06).

In terms of attitudes the student::

• is prepared for assessing and taking a critical approach to situations and phenomena related to business valuation (S3_K01) (K_K01).

• is ready to adhere to professional ethical standards in the field of business valuation (S3_K02) (K_K03).

The learning assessment will be based on:

1. A written final exam (multiple-choice questions and 2 problem-solving tasks).

2. A team project (3-4 students).

The weight of each assessment component will be as follows:

• Final exam – 80%

• Group project – 20%