Sharpen Your Valuation Skills
Real techniques from working analysts who've spent years figuring out what actually matters when valuing companies. No textbook fluff—just what works.
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Building a Solid Foundation
You can't skip the basics. Most mistakes happen because people rush into complex models without understanding why certain assumptions matter more than others.
I've seen countless reports where someone plugged numbers into a formula without questioning whether those numbers even made sense for that particular business. The model looked pretty, but it was wrong from the start.
- Understanding financial statements beyond surface-level metrics
- Recognizing when industry averages don't apply to your specific case
- Spotting red flags in management's projections before building your model
- Adjusting for one-off events that skew historical performance
Three Methods That Actually Get Used
Theory is one thing. But when you're sitting in front of a client or your manager wants an answer by tomorrow, you need approaches that balance accuracy with reality.
Comparable Company Analysis
Looking at similar businesses sounds simple until you realize no two companies are truly comparable. The trick is knowing which differences matter and which ones you can ignore. Market size? Usually matters. Office location? Probably doesn't.
Discounted Cash Flow
DCF models have a reputation for being overly sensitive to assumptions—and yeah, they are. But that's also what makes them useful. When you can defend your assumptions, the model becomes a story about where the business is heading.
Precedent Transactions
What did someone actually pay for a similar company? That's powerful information, but it comes with context you can't ignore. Was the buyer strategic or financial? What year was this? Markets change quickly.
When Theory Meets Reality
Every business presents unique challenges. The company you're valuing might be growing fast but burning cash. Or profitable but in a declining industry. Learning how to adjust your approach based on what you're actually seeing—that's where experience counts.
Let me give you a few examples from situations I've worked through. These aren't hypothetical textbook cases.
High-Growth Tech Startup
Revenue doubling each year but nowhere near profitable. Traditional multiples don't work here. You need to look at revenue quality, customer retention, and unit economics to figure out if this growth is sustainable or just venture capital on fire.
Family-Owned Manufacturing Business
Steady cash flow for decades but zero investment in modernization. The financials look stable until you realize their main customer is also aging out. Sometimes the biggest risk isn't in the numbers—it's in what's not happening.
Retail Chain Post-Restructuring
Recently emerged from difficulties with a cleaned-up balance sheet. Historical performance is useless here. You're basically valuing a different business, which means building projections from current operations forward.
Going Deeper When You Need To
Sensitivity Analysis That Makes Sense
Running sensitivity tables is easy. Knowing which variables actually deserve sensitivity testing? That takes judgment. Focus on the assumptions that could realistically change your recommendation, not just making your spreadsheet look thorough.
- Test revenue growth rates across realistic ranges based on market conditions
- Vary margin assumptions if the business model is still proving itself
- Adjust discount rates for comparable risk profiles in current markets
Scenario Planning Beyond Base Case
Base, upside, downside—everyone does these three scenarios. The question is whether your scenarios tell a coherent story or just adjust everything by 20 percent. Think about what would actually cause the upside scenario. Is it realistic?
- Build scenarios around specific events or market shifts
- Maintain internal consistency across your assumptions
- Assign probabilities based on what you actually think will happen
Adjustments for Control and Liquidity
Owning 100 percent of a business is worth more than owning 20 percent. Owning shares you can sell tomorrow is worth more than shares in a private company. These aren't just theoretical adjustments—they reflect real economic differences.
- Apply control premiums when the valuation context warrants them
- Discount for lack of marketability in private company valuations
- Document why your adjustments make sense for this specific situation
Keep Learning From Actual Work
The best way to get better at valuation is doing it repeatedly and learning from what went right or wrong. You'll develop instincts for which assumptions really drive value and which ones barely matter.
Our programs starting in mid-2026 focus on working through real case studies—not just reading about them. You'll build models, defend your assumptions, and hear where your reasoning could be tighter.