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Company Estimation and Analysis

Could someone tell me how to prize a company and what could it be the best approach to this situation (framework) nThanks!

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Top answer
Vlad
Coach
on Nov 15, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Not sure if I understand your question correctly.

For commercial DD you can use the following structure:

Market

  • Size
  • Growth rates
  • Profitability
  • Segments
  • Distribution channels

Competition

  • Market shares of competitors and their segments (see the next point)
  • Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
  • Unit economics of the players (Margins, relative cost position)
  • Key capabilities of the players (e.g. suppliers, assets, IP, etc)

Company 

  • Unit economics (Margins, costs) in current or target markets
  • Brand
  • Product mix
  • Key capabilities

Feasibility of exit (in case of PE):

  • Exit multiples
  • Exit time
  • Existence of buyers

Best

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