Cash-Flow Based Valuation Approach Process to value target company; Business Projections; Define the time horizon which should not less than five years and more than ten years, Estimate growth rate which may be defined for each year separately or for small blocks of two or three years, Estimate change in working capital, Estimate CAPEX requirement, Prepare profit & Loss account and Balance Sheet, Cash Flow Projections; Convert P/L and BS in to cash flows, Find out funding gap, Decide how to fulfill funding gap, Weighted Average Cost of Capital; Estimate specific cost f various existing and proposed components f funding, Estimate WACC, Calculation of Present Value of projected cash flow,
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