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Indian Institute of Management Bangalore

Valuation and Creating Sustainable Value

Indian Institute of Management Bangalore via edX

Overview

Have you wondered how some companies have high market value or how some companies are acquired with huge valuations such as Microsoft that paid $26 billion purchase consideration for acquiring LinkedIn? Or how Facebook paid $19 billion for acquiring WhatsApp or why the market value of Apple is above a trillion dollars.

Valuation is an important aspect of finance which can’t be overlooked whether it’s a day to day performance of the business, issue of equity shares, mergers & acquisitions, investing in new ventures and so on.

This course is about valuation and understanding the different techniques of valuation.

The course will cover two important aspects of valuation. In the first part of the course, you will explore the nuances of valuation, understand the different methods of valuation

Not only measuring is important, one needs to understand how the value can be created and what are the factors that influence the valuation of the company?

The second half of the course will highlight how companies can create sustainable value.

In this course, you will

  • Learn the different techniques of valuation
  • Apply the valuation methods to real companies
  • Understand the fundamental concepts, myths and the factors underlying the valuation
  • Identify the key value drivers for valuation
  • Explain the role of different value drivers in creating value for the company

This course has been designed for graduate students and working professionals who want to deep dive into the concept of valuation and value creation.

The course includes step by step explanation of the different valuation methods and their practical application. We will demystify the various techniques, terminologies and introduce concepts in manageable bite-size that will help you to build your competencies. You will also hear the expert views on the different topics explained in the course.

We will explore the subject in a simple and easy to understand way through a series of videos, real company analysis, reading material, examples, explore and learn section, discussions forums as well as assessments to check your understanding.

Welcome once again to the exciting world of valuation and creating sustainable value.

Syllabus

Week 1: Introduction to Value
This week will introduce you to the concept of value.

In this week, you will:

  • Understand the concept of value & valuation
  • Identify the importance of valuation
  • Explore the financial statements and accounting ratios (in brief)
  • Learn the concept of Time Value of Money
  • Describe the framework of valuation
  • Learn the Dividend Discount Model

Week 2: Methods of Valuation

In this week, you will learn the different methods of valuation and apply the concept to real companies.

You will:

  • Learn the Discounted Cash Flow Method of Valuation
  • Calculate enterprise value and equity value
  • Apply the method to value real-life companies
  • Gain insights from experts

Week 3: Methods of Valuation

You will explore the other methods of valuation.

You will:

  • Learn valuation using multiples
  • Identify and calculate the different multiples
  • Apply the multiples to value firms
  • Understand the basics of start-up valuation
  • Familiarize to the concept of creating sustainable value

Week 4: Drivers for Creating Sustainable Value

You will explore the different drivers for creating sustainable value

You will:

  • Understand the concept of strategy and its role in value creation
  • Describe the importance of operational efficiency for value creation
  • Explain the importance of managing human capital for value creation
  • Gain insights from experts

Week 5: Drivers for Creating Sustainable Value (contd)

In this week, you will identify the other drivers for creating value

You will:

  • Define strategic investing and financing decisions.
  • Learn the capital budgeting techniques
  • Describe the concept of leverage
  • Explore corporate governance and its role in creating value for the company

Taught by

Padmini Srinivasan

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