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Technical

Methods of Business Valuations Logo cgma

  Kaplan Publishing Limited |   $55.00 - 65.00 |   CPE: 1.5 |   AICPA |   Feb 2015 |   Finance |   AICPA Store

This CPE course is included in the 50+ hours of CGMA Strategic Management Accounting. It can also be purchased individually or as a part of Corporate Financial Strategy.

This CPE course examines the process of business valuation and factors that influence the value of a business. It explores the three basic methods of valuing business. Asset based valuation is calculated by book value, replacement value, and break-up/net realisable value. Earnings based valuations rely primarily on the P/E valuation method. Cash flow valuation uses the dividend valuation model (DVM) theory and the discounted cash flow (DCF) method. The course also explores the risk adjusted cost of capital equation, the capital asset pricing model (CAPM), and the efficient market hypothesis (EMH).

Topics Discussed

  • Asset valuation (e.g. historic cost, replacement cost and realisable value)
  • Forms of intangible assets (including intellectual property rights, brands, etc.) and methods of valuation
  • Share prices (quoted on stock market or private sale for non-quoted entities)
  • Earnings valuation (e.g. price/earnings multiples and earnings yield)
  • Dividend valuation (e.g. dividend growth model, including estimating growth from past or forecast figures and including non-constant growth assumptions)
  • Discounted free cash flow valuation (including taxation, risk-adjusted discount rate, foreign currency cash flows and sensitivity analysis)
  • Ideas of diversifiable risk (unsystematic risk) and systematic risk
  • Capital asset pricing model (CAPM), including the meaning and derivation of the component and, the ability to gear and un-gear betas
  • Calculation of an appropriate cost of capital for use in discounted cash flow analysis (e.g. cost of equity or WACC) by reference to the nature of the transaction (e.g. division or an entire entity), including use of CAPM, dividend valuation model and MM WACC formula
  • Efficient market hypothesis and its relevance for the valuation of quoted entities
  • Impact of government incentives on entity value (e.g. capital or revenue grants)
  • Strengths and weaknesses of each valuation method
  • Validity of the results for use in decision making according to the nature of the target entity (e.g. a division, a whole entity, quoted or unquoted)

Learning Objectives

When you complete this course, you will be able to:

  • Calculate the value of a whole entity (quoted or unquoted), a subsidiary entity or division using a range of methods including taxation
  • Compare the valuation methods used in the context of a given scenario

Who Will Benefit?

  • CGMA exam candidates
  • Management accountants wanting to develop skills in corporate financial strategy

DISCOUNTS

CGMA designation holders qualify for additional discounts on this product.

In order to receive your special pricing, you must be registered and signed in. View the complete list of development products available on CGMA.org.

Topics covered:
  • Management accounting: CGMA exam preparation: CPA pathway to CGMA, Intermediate
  • Management accounting: Technical: Corporate finance & treasury management: Business valuation, Intermediate
  • Forensic & valuation services: Technical: Valuation analysis, Intermediate
Who Will Benefit?
  • CGMA exam candidates
  • Management accountants wanting to develop skills in corporate financial strategy
Topics Discussed
  • Asset valuation (e.g. historic cost, replacement cost and realisable value)
  • Forms of intangible assets (including intellectual property rights, brands, etc.) and methods of valuation
  • Share prices (quoted on stock market or private sale for non-quoted entities)
  • Earnings valuation (e.g. price/earnings multiples and earnings yield)
  • Dividend valuation (e.g. dividend growth model, including estimating growth from past or forecast figures and including non-constant growth assumptions)
  • Discounted free cash flow valuation (including taxation, risk-adjusted discount rate, foreign currency cash flows and sensitivity analysis)
  • Ideas of diversifiable risk (unsystematic risk) and systematic risk
  • Capital asset pricing model (CAPM), including the meaning and derivation of the component and, the ability to gear and un-gear betas
  • Calculation of an appropriate cost of capital for use in discounted cash flow analysis (e.g. cost of equity or WACC) by reference to the nature of the transaction (e.g. division or an entire entity), including use of CAPM, dividend valuation model and MM WACC formula
  • Efficient market hypothesis and its relevance for the valuation of quoted entities
  • Impact of government incentives on entity value (e.g. capital or revenue grants)
  • Strengths and weaknesses of each valuation method
  • Validity of the results for use in decision making according to the nature of the target entity (e.g. a division, a whole entity, quoted or unquoted)
Learning Objectives

When you complete this course, you will be able to:

  • Calculate the value of a whole entity (quoted or unquoted), a subsidiary entity or division using a range of methods including taxation
  • Compare the valuation methods used in the context of a given scenario

This CPE course is included in the 50+ hours of CGMA Strategic Management Accounting. It can also be purchased individually or as a part of Corporate Financial Strategy.

This CPE course examines the process of business valuation and factors that influence the value of a business. It explores the three basic methods of valuing business. Asset based valuation is calculated by book value, replacement value, and break-up/net realisable value. Earnings based valuations rely primarily on the P/E valuation method. Cash flow valuation uses the dividend valuation model (DVM) theory and the discounted cash flow (DCF) method. The course also explores the risk adjusted cost of capital equation, the capital asset pricing model (CAPM), and the efficient market hypothesis (EMH).

Comments/Reflections