Valuation Modeling: Excel as a tool
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- Опубликовано: 4 сен 2024
- Excel is a powerful tool, but in our zeal to test out its many powers, we often overuse, and spend far too much time thinking about modeling and too little about business and valuation first principles. I do have a base valuation spreadsheet that I use to value almost every non-financial service company, and over time I have added some bells and whistles. That said, at its core it remains a simple spreadsheet, with no macros or Excel functions. In this session, I provide a link to the spreadsheet and how to use in valuing company, going input cell by input cell. (I am sorry if my voice sounds ragged, but I have a scratchy throat (nope.. Not COVID) and just got off a long flight.)
Spreadsheet: pages.stern.ny...
Professor Aswath is the best! He is an unsung hero in these times! Everyone trying to charge for every thing they can and he just shares his knowledge for free in humility..
True he is so generous
He is the real scholar.
Yes you are right! But he isn't unsung. He is well appreciated worldwide!
wake up babe, new damodaran video just dropped
lmao
I remember I've based my Bachelor thesis quite a lot on prof. Damodaran's books, so I'm listening to this in reverence to those past times.
Thank you, professor! So generous of you sharing this content online, for free.
What a great guy. Giving away his knowledge just to help others. No ego no charges. Thanks Aswath!
I found the most underrated channel on RUclips. Excellent Sir.
No words are enough to thank you for your great support in serving the world and liberating the knowledge sharing. Many thanks professor❤❤
I have smiled throughout the entirety of this--gold. If I choose to get an MBA, it will certainly be at Stern because of you, professor.
Sure, if you have an extra $180k to spare.
Aswath is a national treasure. All his NYU content is available here FREE... that's crazy. The Ginzu knife commercials were the best!!!! They were great at doing everything!
I really appreciate the passion that you have for valuation and for all the effort you make in producing these videos and explaining your process. It's really great of you to do this.
7:30 Iterative calculations on PC: File (top left button) -> Options (near bottom of left bar) -> Formulas -> Calculation options (should be top right)
2023 was a hell of a year, in the health profession i have made $250,000 before taxes as the sole breadwinner and head of household. This is a great starting point and I’m very aware how blessed we are to be in this position, but I’m always looking ahead on how to improve.
You want to work with a money coach or financial planner, although a wealth manager will concentrate on long term, a money coach will help you with paying off all of your debts, maximize your cash flow and help you create systems and processes to direct your money proactively.
I have thought about this, but what is the major difference between a money coach & financial advsior?
A financial planner/wealth managercouls help too to create a more holistic plan for your money. They can assist you in the creation of both short and long-term goal and then help you by giving guidance on the financial decisions and opportunities you are presented with.
Yeah get you an invaluable adviser, everyone has blind spots when it comes to their finances. I began consulting with mine in NY from WA. I have a plan in place now and began to love spreadsheets making exactly 702 thousand in the past 8 months from barely 400 grand makes me have high hopes for 2023.
Who is this person you work with? I have tried getting around me and it is practically impossible to get one that doesn’t charge exorbitantly. Can you also share what the fee structure is like?
What a time to be alive. I can’t believe we can get this for free! Thank you professor.
Very generous of you to provide these. Thank you, Professor.
I valued UBS post merger before Q2 results with this sheet and bought a call option, which helped me incorporate my startup. I value your words more than anyone my uValue Ninja.
by "helping me incorporate my startup" what do you mean? You bought the call option, made a return and the profit helped pay for the incorporation of the company or was the trade the first actionable idea for your (trading) startup? Thank you
Thank you sir, others have you pay for such spreadsheets on their patreon. Truly a godsend
Prof Ashwath, From the time you'd featured my earlier company CommerceOne, I've been a keen follower. Thank you for the service you render in spreading knowledge. 🙏🙏
Thank you professor! I'm not a finance guy, just a computer science nerd and I listen to your new lectures when they come out :)
Still the best channel in RUclips, thanks you so much professor
Thank you so much Mr. Damodaran, you're the best!
Awesome! knowledge philanthropy. bowing down in reverence. Hats off Sir..
I like this, knowledge philanthropy!
This is a valuation crash course for even a novice. Now I wish I majored in finance.
Very clear explanation. Agree with everyone that Prof Damodaran is the best at what he does
Aswath you are the second best to no one !
Thanks Aswath, This is worth more than gold.. I hope everyone watches this video before investing in the stock market. God Bless
Top class content for free, many people charge 000s of $$ for a hyped but average and basic valuation courses...Hats off to you Aswath
Thanks to you professor, its an incredibile opportunity to have all of this material to study 🙏
Thank you, don't know much about finance, but your videos do help me a bit on the finance side. I am from the IT field so understand very little about what you are teaching. I still appreciate your knowledge share
From Argentina, thank you very much.!!!!! I will use it with WMT tomorrow.
You are a true educationist Professor!. Thank You🙏
professser,
thank you so much for your efforts, no words can express my gratitude towards you.
I learnt about you through my FR teacher Kalpesh Mehta who teach FR in JKSC CA Final Batch. He claimed Aswath is the best in valuation
Great to get the precious Channel..Thanks Prof Aswath
Thanks a lot professor for share your classes. I do appreciate it. Thanks!
Thanks for sharing the work you are doing.... great work!!.... small comment - Ireland marginal tax rate is 15% for large firms from 1st Jan 2024 (after adopting BEPS Pillar 2).
Un privilegio ver estos videos. Thank you
TREMENDOUSLY HELPFUL.
THANK YOU Prof.🙏
Really thanks for the video and keeping knowledge free at these crucial times.
wait, if I'm doing this in November like you said and I'm using the 3 most recent quarters of 2024 and the last quarter of 2023 as my last 12 months, then the last 10k would be the 2023 annual report? which also includes the last quarter of 2023?
Thank you. You truly are a great professor.
Thank you Prof aswath, i hope you can discuss about the cost and evaluation of mining
This is Gold, thank you Professor!
Hi Good Evening, Thank you so much for your sharing knowledge. The Myanmar Corporate Income Tax rate is 22 percent.
Thank you from Argentina Professor !!!!
Question / comment: Cell B31 Sales to capital ratio for 1-5 years points to years 1 to 4 instead of 1 to 5 on the Valuation output sheet, otherwise great spreadsheet :-)
Fixed. Thank you!
ginsu knives analogy.... :Whatta bargain'...... Thank you professor
Always very helpful.. Just remarkable in checking all necessary elements of valuation!!!
thank you for sharing this guide. I welcome this video...
Sir, just great!
This was a great video. I would love to see a video or model on financial services companies. All of your videos are outstanding, though!
THE BEST PROF ASWATH DAMODRAN.
may god bless you sir
Thanks Prof Damodaran
Thanks for this information video! I learn a lot from it. One question I still have after this video is that: what number should I put into "Book value of debt" for a bank. A bank record all various things as interest bearing liabilities. I feel it's not quite right to put $0 here, but don't know which reporting number to look for.
Thank you prof! Using this for my next Seeking Alpha article!
Thanks for sharing professor!
Appreciate the sheet and thanks for the clear video. I look forward to trying it. Question: Is the account for a forecast of how the corporate tax rates can change in coming years? I believe they were lowered in US and that is due to expire, so that’s why I’m curious if it’s a factor and accounted for. Thanks again.
Hello, thanks a lot for all of this.
About the R&D converter page, if I'm not mistaken the table with estimates for the différents industries doesn't appear on the file I downloaded today (16/02/2024).
Regards
Fixed it.
thank you sir, that was a gold mine of information.
Thank you very much as always Professor!!!
Professor, you are the man! Thank you!
very very useful spreadsheet sir, having all the info in a simple spreadsheet
Are you able to see spreadsheet? I am not able to open it why?
Kindly do one for financial services companies like banks please.
This is really helpful and informative. Thank you .
Dear Professor, great video sir and your knowledge sharing enlightened me so much. some times I face challenges to estimate the effective tax rate. Any guidance on this?
Great Video Prof. Much appreciated, thanks!
I am confused with the reinvestment calculation in Terminal Value / period. Why Growth Rate is divided by ROC to get reinvestment rate ?
Spreading this knowledge for free ..❤
😊 #zomato is still cheap.
Your Valuation Video on it made my Conviction Strong.
Thanks 😊
Did he valuated again Zomato in recent year
24:53 "Well again, I'm a full service operation"
Classic lol. Thanks for the laughs professor.
Thank you Professor!
Question about Book Value of debt cell. If I add Long-term lease liability + long term debt + other long term liabilities from AMZN balance sheet, they don't add up to numbers in your spreadsheet and trying to understand why.
Were you able to figure this out?
You dont add the Long Term Liabilities necessarily i think.. just Short Term Debt + current Portion of Long Term debt + Long Term debt + leases.
@@taaaaaaaazzzzzz This makes no sense.. "current Portion of Long Term debt + Long Term debt" ????
@@kunalvm it makes perfect sense. Two different positions in the balance sheet. Look at a balance sheet and you’ll see. Or google it and read an explanation.
@@kunalvm it makes perfect sense. And it’s very common to add them together to get your total debt. Long term debt and current portion of long term debt are 2 different things on a balance sheet. Look it up or google it.
thanks for sharing your knowledge.
Hero in disguise!
Can you please make a video elaborating on the reinvestment part in the 'valuation output' sheet? thank you, sir!
Thank you, Professor!
Thank you so much. and I need to know how to get Book Value of Debt?
Yes, have you found out?
You are amazing! Thank you, thank you, thank you!
thank you sir for your openess.....
One semester teaching in a 45 min session. 🎊 🎉
And to think people in America gleefully pay $100k for a humanities degree. This content alone unlocks potential millions in investment growth
Thank you professor!
perfect , Thanks Professor
Holy moly, thank you so much.
Thank you, you are amazing!
Great video! Just curious as to how you all come up with your sales to capital ratios? I often feel like I’m just pulling a number out of a hat based on this year and previous years.
It is the weakest link, since it is purely empirical. That is why I have computed all of the variants of sales to capital ratio (average and marginal) by industry group and for the company.
I have not finished reviewing all the worksheets, but i think there is a mistake in the page R&D converter, the tax benefit of expensing all the R&D expenditure is miscalculated.
Thank you for this wonderful video & material - a question on R&D Conversion. If a company releases R&D figures where part of the total has already been capitalized, and the proportion is known, should only the OpEx R&D figures go into the converter, as the capitalized portion will already been assumed as part of the other inputs, or does this skew the R&D data without ever considering the already-capitalized expenses? Thanks
Hi I think that there is a formula that is not working properly in the sheet "Cost of capital worksheet" B27 when in B25 "country of incorporation" is selected: the vlookup in the sheet "Country equity risk premiums" should be extended from row 181 to row 195
Going through the excel sheet I recognized that, at the time of your valuation the (Estimated value/share) was $146.67. If the excel sheet is downloaded right now, it is at 103.79 (attached). Why is this variation? Is there a variable that needs to be adjusted? I have tried to go into the "option" tab and change cell B17. It still does not adjust. Would you be able to clarify this, please?
Please add the Nepal in the list too sir
Por favor me pueden indicar de donde se tomo el dato de los 85,6 mil de investigación y desarrollo? Gracias
Hi professor thank you so much for this! How does one value a pre-revenue clinical development and asset biotech? Your breakdown of that would be most appreciated!
If there's a way to connect with you on this, would be greatly appreciated
Thank you Prof!
Great video!
I love the spreadsheet but there are 2 things I am uncertain about. Is there no need to add capex and depreciation & amortization because of the sales to capital ratio? Because I don’t see depreciation and amortization added to my fcff‘s, and I don’t see an option to add capex.
Also, does the beta in the detailed coc variation account for the debt/equity ratio of the company?
Prof Aswath, thanks for your updated excel which I have been using extensively.
Notice that the formula of Reinvestment in Valuation Output has changed due to the new insertion of 'year lag between reinvesting and generating growth from that reinvestment' in cell B56 of Input cell. In previous version, the reinvestment used the revenue difference between next and current year to calculate. However, this updated excel uses revenue difference between previous and current year instead as default (when input 'No' in B56); and between next and current year when year lag is 0 year.
May I know whether there is some variable error or it is the correct formula that rectify previous version bug? Should 0 year lag and default assumption (when stated 'No') be using the same revenue numerator variables instead?
Tks for your kind advice.
Hi, many thanks for the excel model, it's very useful! Just a question, how should I consider in the file dividend payments?
thanks Professor
thanks a lost Profesor
Thank you very much! Can I use this spreadsheet for a private company valuation and what should I input for stock price if we have no idea with the company owner what is the current valuation and at what price we should price our business at?
Enter the book value of equity per share (or input one share in the share count and the aggregate book equity) in the share price cell. The spreadsheet uses the stock price only if you use the detailed cost of capital approach. Go the cost of capital options, and choose one of the other approaches, and it should work.
@@AswathDamodaranonValuation Thank you very much! You are the best )))