Valuations & Business Modelling (CSP Paper-9.7)
CS Professional Mod-3
Taught by Faculties:
ElectivePaper 9.7: Valuations & Business Modelling (Max Marks 100)
Objectives Part I : To develop a reservoir of knowledge on valuation which can assist the Company Secretaries in undertaking valuation assignments as a Registered Valuer under Companies Act, 2013 including for Mergers and Acquisitions, Issue of Shares, Winding up of Business and during Distressed Sale. Part II : To assist the student in comprehending the concept of Business Modelling, its vital components, steps involved in preparation of a Business Model and Business Models for varied magnitude of business organizations.
Part I: Valuations (70 Marks) Detailed Contents 1. Overview of Business Valuation : Genesis of Valuation; Need for Valuation; Hindrances/ Bottlenecks in Valuation; Business Valuation Approaches; Principles of Valuation (Cost, Price and Value). 2. Purpose of Valuation : M&A, Sale of Business, Fund Raising, Voluntary Assessment; Taxation; Finance; Accounting; Industry perspective; Statutory Dimension; Society Angle. 3. International Valuation Standards Overview. 4. Valuation guidance resources in India. 5. Business Valuation Methods: Discounted Cash Flow Analysis (DCF); Comparable transactions method; Comparable Market Multiples method; Market Valuation; Economic Value Added Approach; Free Cash Flow to Equity; Dividend Discount Model; Net Asset Valuation; Relative Valuation; Overview of Option Pricing Valuations. 6. Steps to establish the Business Worth: Planning and Data Collection; Data Analysis and Valuation including review and analysis of Financial Statements; Industry Analysis; Selecting the Business Valuation Methods; Applying the selected Valuation Methods; Reaching the Business Value Conclusion. 7. Valuation of Tangibles: Overview of Valuation of Immovable Properties; Plant & Machinery; Equipments; Vehicles; Capital Workin- Progress; Industrial Plots; Land and Buildings; Vessels, Ships, Barges etc. 8. Valuation of Intangibles: Definition of Intangible Assets; Categorization of Intangibles- Marketing Related (Trademarks, Trade names, Certification marks, Internet domains etc.), Customer or Supplier Related (Advertising Agreements, Licensing, Royalty Agreements, Servicing Contracts, Franchise Agreements), Technology Related (Contractual or non-contractual rights to use: Patented or Unpatented Technologies, Data Bases, Formulae, Designs, Softwares, Process), Artistic Related (Royalties from artistic works: Plays, Books, Films, Music). 9. Accounting for share based payment (Ind AS102). 10. Valuation during Mergers & Acquisitions. 11. Valuation of various magnitudes of Business Organizations: Large Companies, Small Companies, Start-Ups, Micro Small and Medium Enterprises. 12. Valuation of Business during Distressed Sale.
Part- II: Business Modelling (30 Marks) 13. Introduction to Business Modelling : Genesis, Meaning; Features; Significance; Usage; Spreadsheet Techniques (Effective use of spreadsheets for modelling, Review of key Excel Functions like building Macros, Decisions involving Time Value of Money); Report and analyze historical data, Prepare future projections and present integrated financial statements, Key financial ratios and Outputs in a logical, summarized and effective manner. 14. Business Model Analysis: Facets of Analysis : Revenues: Cash flows and their timing and Revenue drivers, Expenses: Cash flows and their timing, Investment required through cash flow breakeven: Working Capital, Maximum financing required and cash flow breakeven timing, Sensitivity Analysis: Key success factors, Structuring and designing models.