When in my usual numb and dumb state, i think about valuation ( so i think in my numb state, hypocratic statement), first lines that come to mind are:
i. nothing less than Mergers & Acquisitions
ii Buyer synergies
iii One can debate endlessly ( with other person of course) about the difference between Fair Value and Fair Market Value
iv. Even Trading and Hedging do not escape valuation.
v. To quote from Adkins , Matchett and Toy, " valuation is fundamental to nearly every aspect of finance"
Valuations are needed for stand alone firms or for combined entities for
mergers
acquisitions
company sales
start-ups
joint ventures
share-option programs
IPOs
re-capitalization
etc
Basically, wherever and whenever there is a transaction, we might need a valuation.
When two boys do a transaction in a playground ( purchase of a cricket ball in return for a promise of a homework or for some money), they are evaluating.
Since, in large organizations, lot of people are involved, transactions such as these have given opportunities to some other firms and persons to claim some consultation fee.
There are mainly two things to care about in any situation:
i Your own basics on how the company works, what different financial terms and numbers mean
ii what is the proposed transaction
Sometimes, a third point you need to care about is the legal/ regulatory aspect.
People who are experienced enough can think of transactions that comply with laws as well as provide maximum possible benefit to their clients.
Most of our intelligence is required only to know our basics and to fully understand the transaction. We all succeed with varying degrees on these two accounts. There is very little 'creative' about finance. It is in general more about retaining your fragile understanding. And definitely, there is nothing that is out of our intuitive reach.
i. nothing less than Mergers & Acquisitions
ii Buyer synergies
iii One can debate endlessly ( with other person of course) about the difference between Fair Value and Fair Market Value
iv. Even Trading and Hedging do not escape valuation.
v. To quote from Adkins , Matchett and Toy, " valuation is fundamental to nearly every aspect of finance"
Valuations are needed for stand alone firms or for combined entities for
mergers
acquisitions
company sales
start-ups
joint ventures
share-option programs
IPOs
re-capitalization
etc
Basically, wherever and whenever there is a transaction, we might need a valuation.
When two boys do a transaction in a playground ( purchase of a cricket ball in return for a promise of a homework or for some money), they are evaluating.
Since, in large organizations, lot of people are involved, transactions such as these have given opportunities to some other firms and persons to claim some consultation fee.
There are mainly two things to care about in any situation:
i Your own basics on how the company works, what different financial terms and numbers mean
ii what is the proposed transaction
Sometimes, a third point you need to care about is the legal/ regulatory aspect.
People who are experienced enough can think of transactions that comply with laws as well as provide maximum possible benefit to their clients.
Most of our intelligence is required only to know our basics and to fully understand the transaction. We all succeed with varying degrees on these two accounts. There is very little 'creative' about finance. It is in general more about retaining your fragile understanding. And definitely, there is nothing that is out of our intuitive reach.
