
Business Valuation Methods
Code: 105771Credits: 6
| Degree programme | Type | Course |
|---|---|---|
| Accounting and Finances | OP | 4 |
Contact lecturer
- Name :
- Santiago Guerrero Boned
- Email :
- santiago.guerrero@uab.cat
Teaching staff
- Daniel Blabia Girau
Group languages
You can consult this information at the end of the document.
Prerequisites
This is an optional fourth-year subject; students must have taken subjects in the areas of Accounting and Finance.
Objectives
The objective of the subject is to understand how to arrive at a rational valuation of a company or organization. Additionally, given that company valuation requires a comprehensive approach where business strategy is linked to finance, another objective of the subject is to develop the skills necessary to fully manage a large industrial company using a simulator where the student will have to face decision-making related to all areas of the company to obtain the maximum benefit in conditions of competition with the rest of the companies managed by their peers. The specific objectives are the following:
- Know the main methods of company valuation.
- Study the advantages and limitations of each method
- Select the most appropriate valuation method according to the type of company and context.
- Prepare solid and well-argued valuation reports.
- Remark the links between strategy and finance by managing a large industrial company using a simulator.
Learning outcomes
- CM16 (Critically analyse the principles, values and procedures governing the practice of the profession.) Critically analyse the principles, values and procedures governing the practice of the profession.
- CM17 (Determine the financial system used in each of the financial operations, as well as the fixed and variable expenses affecting said operation.) Determine the financial system used in each of the financial operations, as well as the fixed and variable expenses affecting said operation.
- KM16 (Recognise which types of organisations allow for appropriate value maximisation.) Recognise which types of organisations allow for appropriate value maximisation.
- SM09 (Assess the formation of value of company shares.) Assess the formation of value of company shares.
- SM11 (Identify the functioning of the financial system and the different financial intermediaries, the regulatory bodies and functions, the methods used in pricing, the specific financial operations and the micro and macroeconomic functions of the participants.) Identify the functioning of the financial system and the different financial intermediaries, the regulatory bodies and functions, the methods used in pricing, the specific financial operations and the micro and macroeconomic functions of the participants.
Contents
1. Introduction to company valuation.
1.1. What is valuation? Value and price.
1.2. Valuation contexts. Why is a valuation needed?
1.3. Overview of the main company valuation methods.
2. Methods based on the company's balance sheet.
2.1. Book value; liquidation value and substantial value.
3. Methods based on multiples.
3.1. Use of the PER ratio.
4. Methods based on discounted cash flows.
4.1. Income and value.
4.2. Company valuation and strategic analysis.
4.3. Calculation of cash flows.
4.4. Continuation value.
4.5. The discount rate.
5. Adaptation of valuation methodologies to the case of SMEs.
6. The case of startup valuation.
7. Content of a valuation report.
8. The comprehensive management of a multinational industrial company through simulation.
8.1. Introduction to the simulation
8.2. Introduction to the company to be managed
8.3. Development of a strategic plan
8.4. Development of a final management report
8.5. Simulation workshop.
Learning activities and methodology
| Title | Hours | ECTS | Learning outcomes |
|---|---|---|---|
| Resolution of exercises in the classroom and analysis of cases | 24.5 | 0.98 | CM17, SM09, SM11 |
| Solving cases and exercises | 36.5 | 1.46 | SM09, SM11 |
| Tutorials | 10 | 0.4 | CM16, CM17, KM16, SM09, SM11 |
| Master classes | 25 | 1 | CM16, CM17, KM16, SM09, SM11 |
| Study | 40.5 | 1.62 | CM16, CM17, KM16, SM09, SM11 |
| Search of documents | 10 | 0.4 | SM09, SM11 |
The planned type of teaching for the subject will be face-to-face. Approximately 70% of the teaching activity will be dedicated to Topics 1 to 7 (Company Valuation), while, in parallel, the other 30% f will be dedicated to Topic 8 (Management Simulation). Regarding Topics 1 to 7, there will be a theoretical half and a practical half. The theoretical part is based on lectures with the help of audiovisual resources and readings. The practical part is based on solving exercises in the classroom and analyzing cases. Part of the student's work is autonomous and is based on preparing assignments and carrying out specific cases on the content of Topics 1 to 7. Regarding Topic 8, students, distributed in teams, will manage a large industrial company in conditions of competition between them, where they will put into practice the knowledge acquired throughout the degree and work on skills such as analytical skills, decision-making and teamwork.
For this subject, the use of Artificial Intelligence (AI) technologies is allowed in support tasks, such as bibliographic or information searches, correction of texts or translations. The student will have to clearly identify which parts have been generated with this technology, specify the tools used and include a critical reflection on how they have influenced the process and the final result of the activity. The non-transparency of the use of AI in this assessable activity will be considered a lack of academic honesty and may lead to a partial or total penalty in the grade of the activity, or greater sanctions in cases of severity.
Assessment
Continuous assessment activities
| Title | Weight | Hours | ECTS | Learning outcomes |
|---|---|---|---|---|
| Evaluative activity | 30% | 1.5 | 0.06 | CM16, CM17, KM16, SM09, SM11 |
| Monitoring activities (Simulation Workshop) | 30% | 0 | 0 | CM16, CM17, KM16, SM09, SM11 |
| Final exam | 40% | 2 | 0.08 | CM16, CM17, KM16, SM09, SM11 |
The completion of assessment activities is subject to the provisions set out in this course guide and in the "Policy of the School of Economics and Business on the Detection of Irregularities during Assessment Activities", which regulates the conditions under which assessment tasks are conducted and the procedures applicable in cases where indications of irregularities are detected. Students are encouraged to consult the policy.
This subject/module does not offer the option for comprehensive evaluation.
The final grade of the course will be made up of the weighted average of three grades:
- Evaluation activity. In the middle of the course there will be a test on the contents developed of the topics 1 to 7 of the subject. The grade will represent 30% of the final grade of the course. This test will be liberating for students who obtain a grade of 5 or higher.
- Follow-up activities: simulation workshop: The part of the subject related to simulation will have a weight of 30% in the final grade of the course. This part may be released if a grade of 5 or higher is obtained. The evaluation of the monitoring activities will be composed of:
- Test on simulation materials 5%
- Implementation of the Strategic Plan 20%
- Final Management Report 25%
- Net result of the simulation 50%.
- Exam at the end: The student will be evaluated based on the contents of the second part of the course developed from the topics of the subject, who can pass it if they obtain a grade of 5 or higher. In this case, the exam grade will represent 40% of the final grade of the course. On the same date as the final exam, an additional test will be taken for students who have passed the evaluation activity of the previous point. This will be exceeded if a grade equal to or greater than 5 is obtained.
To pass the subject, it is necessary to obtain a minimum grade of 5 in the weighted average of the three notes that form the course evaluation (see points 1, 2 and 3 above).To make this weighted average, it is essential that the three previous notes are greater than 5 each.
If the weighted average mentioned in the previous point is lower than 3,5, the student will have to repeat the subject next year. Otherwise the student can accomplish the recovery process described below (Retake Process).
A student is considered \"Not evaluable\" to the subject as long as he has not participated in any of the assessment activities. Therefore, it is considered that if a student does any part of the activities of course evaluation cited above, can no longer opt for a \"Not evaluable\".
Calendar of evaluation activities
The dates of the evaluation activities (exercises, assignments ...) will be announced well in advance during the semester.
The dates of the midterm and final exams are scheduled in the assessment calendar of the Faculty.
\"The dates of evaluation activities cannot be modified, unless there is an exceptional and duly justified reason why an evaluation activity cannot be carried out. In this case, the degree coordinator will contact both the teaching staff and the affected student, and a new date will be scheduled within the same academic period to make up for the missed evaluation activity.\"Section 1 of Article 115. Calendar of evaluation activities (Academic Regulations UAB).Students of the Faculty of Economics and Business, who in accordance with the previous paragraph need to change an evaluation activity date must process the request by filling out an Application for exams' rescheduleat
https://eformularis.uab.cat/group/deganat_feie/nou-reprogramacio-de-proves
Grade revision process
After all grading activities have ended students will be informed of the date and way in which the course grades will be published. Students will be also be informed of the procedure, place, date and time of grade revision following University regulations.
Retake Process
\"To be eligible to participate in the retake process, it is required for students to have been previously been evaluated for at least two thirds of the total evaluation activities of the subject.\" Section 3 of Article 112 ter. The recovery (UAB Academic Regulations).Additionally, it is required that the student to have achieved an average grade of the subject between 3.5 and 4.8.
The date of the retake exam is posted in the calendar of evaluation activities of the Faculty. Students taking this exam and passing will get a grade of 5 for the subject. For the students that do not pass the retake, the grade will remain unchanged, and hence, will fail the course.
Use of AI
For this subject, the use of Artificial Intelligence (AI) technologies is allowed exclusively in bibliographic or information search, text correction or translation tasks. The student will have to clearly identify which parts have been generated with this technology, specify the tools used and include a critical reflection onhow they have influenced the process and the final result of the activity. Lack of transparency in the use of AI in this assessable activity will be considered a lack of academic honesty and may result in a partial or total penalty in the grade of the activity, or greater penalties in cases of seriousness.
Irregularities in evaluation activities
Despite other disciplinary measures deemed appropriate, and in accordance with current academic regulations, \"whenever a student makes any irregularity that could lead to a significant variation in the grade of an evaluation activity, it will be graded with a 0, regardless of the disciplinary process that can be instructed. In case of occurrence of various irregularities in the evaluation of the same subject, the final grade of this subject will be 0\". Section 10 of Article 116. Results of the evaluation. (UAB Academic Regulations).
Bibliography
AECA (2005). Valoración de Pymes. Comisión de Valoración y Financiación de Empresas. Documento nº 7. Madrid: Asociación Española de Contabilidad y Administración de Empresas.
AECA (2018). Valoración por múltiplos. Comisión de Valoración y Financiación de Empresas. Documento nº 15. Asociación Española de Contabilidad y Administración de Empresas.
AECA (2023). El proceso de valoración de startups. Documento n.º 19. Asociación Española de Contabilitat y Administración de Empresas.
Brealey, R; Myers, S, Allen, F. (2020): Principios de Finanzas Corporativas. McGraw Hill. 13ª edición. (Existe versión digital
Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any
asset. John Wiley & Sons.
De la Torre, Antonio y F. Jiménez (2014): Valoración de empresas y análisis bursátil. Ed. Pirámide.
Fernández, Pablo (2025): Valoración de empresas. Sentido común, complicaciones innecesarias y ficción. Ed. IESE.
Menéndez, C. y S. Guerrero (1996): \"Estudio de aplicabilidad de los diferentes métodos de valoración\". AECA Documento nº 5. Asociación Española de Contabilidad y Administración de Empresas.
Software
Microsoft Excel
Course groups and languages
The information provided is provisional until November 30. After this date, you will be able to consult the language of each group through this link. To access the information, you will need to enter the course CODE
| Type of teaching | Group | Language | Semester | Shift |
|---|---|---|---|---|
| (TE) Theory | 1 | Catalan/Spanish | first semester | morning-mixed |
| (PAUL) Classroom practices | 1 | Catalan/Spanish | first semester | morning-mixed |