Finance Corporate Val

Contract

• Input: problem description and inputs defined by the skill body.
• Output: Markdown artifact with completed process steps.
• Side effects: none.
• Dependencies: none.
• Stop condition: all process steps executed; artifact saved with required sections.
• Risk: low.
• Boundary: produces reasoning artifact only; no system changes.

Corporate Valuation

Compute a corporate valuation — not a price target, but a disciplined range with assumptions exposed — using DCF, multiples, and scenario analysis.

When to use

• The user wants to value a company, business unit, or asset.
• A deal, M&A, or investment decision depends on a valuation range.
• A back-of-envelope valuation needs to be made defensible.

Process

1. Define scope

Name: the company / unit, the valuation date, the purpose (fair market value, strategic value, liquidation), and the currency / currency-adjusted scenario.

Completion criterion: scope, valuation date, purpose, currency all explicit.

2. Choose methods

Select at least two independent methods:

• DCF: forecast free cash flow, terminal growth, WACC.
• Multiples: P/E, EV/EBITDA, EV/Revenue, P/B — with comparable company selection criteria.
• Sum-of-parts: for conglomerates; each segment with its own method.
• Asset-based / liquidation: for distressed cases.

State why each method fits.

Completion criterion: at least two methods named with selection rationale.

3. Make assumptions explicit

Every number comes from a source or an explicit assumption:

• Forecasts: revenue growth, margins, capex, working-capital — with a source (management, analyst, industry).
• WACC / discount rate: risk-free rate, beta, equity risk premium, debt cost, capital structure.
• Terminal growth: not automatically 3%; tie to GDP / inflation / sector.
• Multiples: how comparables selected; adjustments for size, growth, profitability.

Completion criterion: every major assumption is either cited or explicitly stated.

4. Run the numbers

Compute each method. For DCF, report:

• Projected FCF by year.
• Terminal value and terminal-value-to-enterprise-value ratio.
• Sensitivity table (WACC ±2%, terminal growth ±1%).

For multiples, show the comparable list and adjustments.

Completion criterion: computation executed; sensitivity table present for DCF.

5. Cross-check and reconcile

Compare methods:

• Is the DCF range consistent with the multiples range?
• If they diverge, which assumption drives it?
• Scenario analysis: base / optimistic / pessimistic case.
• Sanity against market price: premium / discount to current price, and why.

Completion criterion: at least two methods compared; divergence explained.

6. Deliver

Markdown artifact with: scope, methods, assumptions (with sources or notes), computation, cross-check, scenario analysis, and a valuation range with a narrative about its reliability.

Completion criterion: range delivered; reliability note included; sources cited.