Whether you're new to the world of valuation or just starting with our platform, this article will help you navigate through the essential steps of customizing, interpreting, and exporting your valuation using Valutico.

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Before you dive into valuations, it's important to understand the various methodologies available on Valutico. As of October 2023, Valutico offers 29 different valuation methodologies, grouped into six categories:

Trading comparables, involve evaluating a company's valuation based on the market multiples of similar publicly traded companies. The valuation process begins with determining the median of trading multiples from a peer group, including EV/Sales, EV/EBITDA, EV/EBIT, P/E, or P/B. A discount or premium, typically derived from a Qualitative Assessment, is then applied to this median multiple to establish the Applied Multiple. This Applied Multiple is subsequently multiplied by the relevant financial metric (Sales, EBITDA, EBIT, Earnings, or Book Value) of the target company, resulting in either Enterprise Value (for Sales, EBITDA, and EBIT) or Equity Value (for P/E or P/B).

This process operates similarly to Trading Comparables, but instead of using observed trading multiples, it relies on the medians of EV/Sales, EV/EBITDA, EV/EBIT, and P/E from a chosen set of Transactions.

The VC Method is most commonly used in the venture capital industry and for valuing startups. An investor will seek to exit their investment at some future date at a price that is consistent with valuation multiples observable in the markets today.

The Leveraged Buyout (LBO) model involves acquiring a business with borrowed money. Key steps include assuming a hypothetical purchase price using an entry EV/EBIT multiple, creating a funding plan based on target leverage, forecasting an exit in year 4, and calculating the initial purchase price needed to meet the investor's desired return at the exit. Refer to the detailed LBO Method in the Appendix for specifics.

These methodologies cover a wide range of valuation scenarios, from DCF analysis to market-based methods like trading and transaction comparables. As a beginner, you can focus on a few key methods and gradually explore others as you become more comfortable with the platform.
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The discount rate is a crucial component in valuation. Valutico uses the Capital Asset Pricing Model (CAPM) for determining the Cost of Equity (CoE). This CoE can be adjusted based on additional factors like a Cost of Equity premium. Similarly, the Cost of Debt (CoD) is calculated, taking into account the risk-free rate and credit spread. The Weighted Average Cost of Capital (WACC) is computed as well.

As a beginner, you can use Valutico's default settings for these rates. However, as you become more experienced, you may want to explore customizing these rates to reflect specific market conditions and risks.

Valutico provides detailed explanations and calculations for each valuation methodology. You can access these details by clicking on the name of each methodology. This is a valuable resource for those who want to understand the mechanics of each approach in more depth.

Valutico allows you to choose which valuation methodologies you want to include in your valuation. To do this, click "Valuation Methods" on the top right of the screen and toggle the methods on or off. As a beginner, you can stick to a few core methodologies and gradually experiment with others as you gain confidence.

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Once you've completed a valuation, you might want to share or export it. Valutico provides easy options for both:

You can share a valuation by clicking on the "Share" link at the top of the screen. You can make the valuation public and generate a shareable link. This link can be shared with others, either Valutico users or non-users. Valutico users can duplicate the valuation to their profile, while non-users can view the valuation.

Valutico offers two ways to export valuations:

You can export valuations in several different languages, making it flexible for your audience.