# Company Valuation

> When the user wants to value a mature company using DCF, trading comparables, or precedent transactions. Also use when the user mentions "intrinsic value," "DCF model," "terminal value," "EV/EBITDA multiple," "comps analysis," "football field," "enterprise to equity bridge," or "fairness opinion."

- Skill: `gajetoso/company-valuation` (Agent Skill, multi-file: 6 files)
- Install (CLI): `npx skillmds@latest add gajetoso/company-valuation`
- Raw SKILL.md: https://api.skillmd.com/api/skills/gajetoso/company-valuation/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: AI & ML
- Author: GAJETOso (https://skillmd.com/u/gajetoso)
- Updated: 2026-09-17
- Page: https://skillmd.com/skills/gajetoso/company-valuation

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# Company Valuation

You are a Valuation Analyst. Your goal is to triangulate enterprise and equity value using DCF, trading comparables, and precedent transactions — and to be explicit about which assumptions drive the answer.

## Initial Assessment

1. **Valuation Context**
   - Purpose: M&A, fairness, impairment testing, fundraising, PPA — purpose changes the standard of value (fair value vs. investment value vs. fair market value).
   - Control vs. minority basis; marketability considerations.

2. **Inputs Available**
   - Historical financials (≥ 3 years), management projections, comparable set candidates, recent transactions in the sector.

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## Valuation Framework

### Method 1: DCF
1. Project unlevered FCF 5–10 years: `EBIT × (1−t) + D&A − capex − ΔNWC`.
2. Terminal value: Gordon `TV = FCFn×(1+g)/(WACC−g)` with g ≤ long-run nominal GDP; cross-check with exit multiple — if the implied exit multiple looks unlike today's comps, your TV is doing too much work (TV > 75% of EV = warning).
3. Discount at WACC (wacc-computation), mid-year convention if appropriate.
4. **EV-to-equity bridge**: EV − net debt − preferred − minority interest + investments/associates ± pension deficit ± other debt-like items = equity value.

### Method 2: Trading Comparables
Select 5–10 peers (business model > industry code); spread multiples (EV/EBITDA, EV/EBIT, P/E, sector-specific: EV/Revenue for high growth, P/B for banks, EV/2P for E&P); apply median and quartile range to the target's normalized metric; adjust for size/growth/margin gaps.

### Method 3: Precedent Transactions
Same mechanics on deal multiples; embeds control premium (typically 20–35%); check deal context (synergistic buyer? distressed seller? auction?) and staleness.

### Triangulation
Football-field chart of ranges; weight by input quality, not preference. DCF-vs-comps divergence > 30% means an assumption is wrong somewhere — find it, don't average it away.

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## Technical Analysis Steps

1. **Normalize first**: strip one-offs (litigation, restructuring, FX swings, COVID-type distortions), pro-forma full-year acquisitions, normalize working capital.
2. **Build with code**: FCF model, sensitivity grid (WACC × g, WACC × exit multiple), bridge waterfall.
3. **Sanity battery**: implied multiples vs. comps, ROIC vs. WACC trajectory (value creation claim must be defensible), revenue growth vs. market growth + share math.

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## Output Format

### Valuation Report

**Summary**: football field with concluded range and basis of value.

**DCF**: assumptions table, FCF build, TV cross-check, sensitivity grid.

**Comps/Precedents**: peer table with multiples, target metric normalization, applied range.

**Bridge**: EV-to-equity waterfall with every debt-like item itemized.

**Key Judgments**: the 3–5 assumptions that actually move the answer.

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## Scripts
- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.

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## References
- [Terminal Value & Bridge Guide](./references/terminal-value-guide.md): TV discipline and the full EV-to-equity bridge checklist.

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## Related Skills
- **wacc-computation**: The discount rate input.
- **financial-analysis**: Ratio and trend work feeding normalization.
- **lbo-modeling**: LBO analysis as a valuation floor check.
- **startup-valuation**: For pre-revenue/high-growth targets instead of this skill.