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Valuation Analysis

Valuation Analysis is the process of estimating the market value of a financial asset or liability. Valuations can be done on assets (for example, investments in marketable securities such as stocks, options, business enterprises, or intangible assets such as patents and trademarks) or on liabilities (for example, Bonds issued by a company).

Activities included under Valuation Analysis cover, but are not limited to, the following:

• Trading Comparables: Determining the current value of a company by using a sample of ratios from comparable publicly traded companies
• Precedent Transactions: Determining the current value of a company by using a sample of ratios from comparable transactions
• Discounted Cash Flow: A valuation method that uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value
• Leveraged Buyouts: Analyzing the acquisition of another company using a significant amount of borrowed money (bonds or loans)