Valuation: Methods and Models in Applied Corporate Finance - Hardcover

Chacko, George; Evans, Carolyn L.

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9780132905220: Valuation: Methods and Models in Applied Corporate Finance

Hardcover

ISBN 10: 0132905221 ISBN 13: 9780132905220

Publisher: Financial Times/ Prentice Hall, 2014

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Master corporate valuation: the financial art and science of accurately valuing any business. George Chacko's Applied Corporate Finance: Valuation is the first valuation book to combine true academic rigor with the practical skills you need to successfully value companies in the real world. Renowned financial instructor and investment manager George Chacko focuses on concepts, techniques, tools, and methodologies that lead directly to accurate valuations, and explains each key concept with up-to-date examples. One step at a time, Chacko develops a practical, rigorous approach to conducting valuation, addressing the projection of financial statements, calculation of free cash flows, risk-adjusted cost of capital, and leading methodologies including WACC, flow-to-equity, and Adjusted Present Value (APV). By avoiding elementary content that financial managers, analysts, and MBA-level finance students already know, this book can focus more tightly on the realistic techniques and advanced issues practitioners are actually concerned with. Coverage includes: market value and accounting balance sheets, cash cycles, the DuPont formula, financial distress, and capital as a risk buffer; constructing pro-formas, projecting and bridging financing shortfalls, and planning sustainable growth; sources/uses of cash, cash income statements, pro-forma balance sheet changes, working capital, depreciation, and capital expenditures; risk-free cost, investment risks, and diversifiable vs. idiosyncratic risks; NPV, APV, Optimal Debt Ratios, Capital Structure Dynamics, Terminal Value Calculations, and more. For all finance professionals, analysts, and MBA students who need to sharpen their skills in valuation and related areas of corporate finance, accounting, or strategic planning.

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From the Back Cover:

The First Valuation Book to Combine True Academic Rigor with Complete Practical Skills

Practical tools and methodologies, not ivory-tower theory
Teaches through realistic examples, and fully explains all math
For all finance professionals, analysts, strategic planners, and MBA students

This is the only modern valuation book to focus entirely on useful results—avoiding ivory-tower theory you don’t need and elementary material you already know. George Chacko and Carolyn L. Evans combine true academic rigor with all the practical skills and techniques financial professionals need to value companies accurately and make optimal investment decisions.

Step by step, the authors develop a practical and rigorous approach to conducting valuation. They address the projection of financial statements, calculating free cash flows, risk-adjusted cost of capital, and several leading methodologies, including WACC, flow-to-equity, and APV.

Throughout, every concept is explained with realistic examples, and demonstrated with accessible math. No previous mathematical understanding is required beyond basic algebra, probability, and statistics: wherever more advanced math is required, the authors explain it fully.

Today, financial managers rely on far more sophisticated frameworks to identify and appropriately price investments. These frameworks integrate basic finance and accounting principles, asset pricing models, probabilistic and statistical techniques, and explosive advances in data availability and computation. Meanwhile, as the discipline of valuation has progressed, valuation expertise has become essential for virtually all professionals in corporate treasury, strategic, underwriting, mergers and acquisitions (M&A), and private equity roles.

This eminently practical guide delivers the rigorous real-world understanding you need, without the theoretical abstractions you don’t. George Chacko and Carolyn L. Evans focus on techniques and methodologies that lead directly to accurate valuations, illuminating each key concept with up-to-date examples.

Starting with the discounted cash flow (DCF) framework most practitioners already know, they construct each of today’s most common valuation frameworks. Chacko and Evans explain why each framework is valid, introduce useful shortcuts, and walk through realistic applications.

FINANCIAL STATEMENT ANALYSIS
Perform preliminary financial analysis on any potential project
FINANCIAL FORECASTING
Project future financial statements, step by step
FREE CASH FLOWS
Project free cash flow based on financial forecasts
COST OF CAPITAL
Master leading approaches to calculating discount rates, and assess the value implications of your financing choices
VALUATION FRAMEWORKS
Bring it all together, systematically reflecting value estimates in your decisions

About the Author:

George Chacko is Associate Professor of Finance at Santa Clara University’s Leavey School of Business and Founding Partner of HNC Advisors AG. He was formerly Associate Professor at Harvard Business School, Managing Director at State Street Bank, and Chief Investment Officer at Auda Alternative Investments. He holds a Ph.D. and M.A. in Business Economics from Harvard University and a B.S. from MIT.

Carolyn L. Evans is Senior Assistant Dean at the Leavey School of Business at Santa Clara University. She has worked at Intel Corporation, the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, and the White House Council of Economic Advisers. She holds a Ph.D. and M.A. in Economics and a B.A. in East Asian Languages and Civilizations, all from Harvard University.

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