Veristrat LLC

07/08/2022

Our team is working on a project to evaluate the value a software company by applying Discounted Cash Flow (DCF) approach. Free cash flow is valued by the investment community as it provides a wealth of information on company performance and is a key component of DCF valuation. The operating income reported in the financial statements is for accounting purposes and has to be converted to free cash flow which is the actual cash available after adjusting for non-cash charges, changes in working capital, and capital expenditure.

To know more about cash flow adjustments for DCF analysis, visit the link –

https://www.veristrat.com/blog-valuation/cash-flow-adjustments-for-dcf-analysis/

A discounted cash flow (DCF) is a valuation method used to estimate the attractiveness of investment opportunities. Read more about DCF analysis.

05/11/2022

Veristrat reviews the valuation model prepared by the clients on a day-to-day basis for audit purposes. Recently, we came across a model where the LTM EBITDA was $1.4 million. However, after a thorough analysis of the model, we analyzed that the figure was underestimated due to a lawsuit fee which is a non-recurring event. Also, one of the shareholders is a major supplier of the company, selling the inventory greater than its fair value. After making relevant adjustments, the LTM EBITDA figure reached ~$3 Million.

Analysts often make such errors by ignoring relevant adjustments leading to an incorrect value of the company. To learn about EBITDA and the importance of normalizing EBITDA, read the article “What is EBITDA? How does it impact your company’s finances?”

Click the Link: https://www.veristrat.com/blog-valuation/ebitda/

EBITDA stands for Earnings before Interest Taxes Depreciation & Amortization. It is a measure of cash flow to the firm, to both equity and debt holders.

04/26/2022

Valuation of a company is a critical task and requires a lot of understanding of different industries and sectors. A good understanding of valuation fills confidence among the investors to buy and sell stocks. There are various measures on which investors take the decision of buying or selling the stocks, some important measures are Market value and Book Value.

To know more about market value and book value, follow the link,

https://www.veristrat.com/blog-valuation/market-value-vs-book-value/

Market Value vs Book Value? What's the difference? In this article, we'll show you in detail how to distinguish between the two.

04/05/2022

We have openings for a "Jr. Analyst" profile. If you are convinced with the profile mentioned below, please share your updated resumes at [email protected]

Profile Summary

The role of a Jr. Analyst is to perform both client management and client implementation services. The preferred applicant will have at least 1 year of experience in data analysis, financial modelling, and valuation. Ideal candidates will have experience in financial reporting valuations including Topic 820/157, 409a/123r, purchase price allocations (SFAS 141s/142 or ASC 805, 820, 350), and other related business valuations.

Education Background and Desired Profile:

a) B.Com/ BBA/ CFA Level 1 cleared preferred.

b) Throughout minimum 60% in academics.

c) Minimum 1 year of valuation and/or investment banking experience.

Duties:

a) Financial modelling and data analysis for valuation of venture capital portfolios and high the firms like Twitter, Zynga etc.

b) Initiate implementations by working with clients and the management team to obtain the necessary legal and financial documents to begin the implementation process.

c) Perform data conversions to ensure legal documents and client-provided spreadsheets have been properly entered into the systems.

d) Perform data reconciliation between client-provided documents and internally aggregated financial metrics

e) On-going customer support; addressing client requests, questions, and concerns via e-mail or dedicated service line.

f) Attention to detail, deadline-oriented, confidentiality, time management, data entry management, proficiency in Microsoft Office Suite, and advanced math skills.

Job Location:

Remote - India (Work from Home)

Process:

Interview – Related to Finance & Accounts and general awareness/Intelligence and confidence.

03/30/2022

We at Veristrat are working on a project to calculate Beta (β) for a private company. Beta is the measure of the variability of a company’s stock price in relation to the overall stock market. To calculate the beta of a private company, we select a set of comparable companies and take their mean or median beta. We remove the effect of debt from the comparable beta for each comparable (unlever the beta). Next, we re-lever the unlevered beta of the comparables using the debt-equity ratio of a private company.

To know more about beta calculation, visit the below link:

https://www.veristrat.com/blog-valuation/beta-%ce%b2-for-an-unlisted-company/

Beta (β) for Private Company : Beta as we know is the measure of variability of a company’s stock price in relation to the overall stock market. In this article you will learn how is beta calculated & what is beta of a company.

03/23/2022

Our team is working on a project to evaluate the value of a company. Company valuation is the process of determining how to value a business. The standardized measure to estimate the value a company is based on fair market value. The fair market value measure is based on the fact of what value is concluded by an agreement between an independent buyer and seller to buy or sell the company. The buyer and seller are deemed to possess all the necessary knowledge and facts of the business, are not under any undue influence to deal and are free to access all of the information to make an informed decision to buy or sell the company.

To know more about how to value a business, visit the link -

https://www.veristrat.com/blog-valuation/how-to-value-a-business/

03/15/2022

Bonds are complex security when compared to common stocks. This is due to the fact that bond prices are more sensitive to the inflation rate or general interest rates. There are some common factors that affect the value of a bond.

To know all about these factors, visit the link:

https://www.veristrat.com/blog-valuation/bond-valuation/

Bond valuation is a technique to determine the theoretical fair value of a particular bond. Here in this article we covered, What is bond valuation, How to do it, examples and formulas

03/09/2022

Our team is working on a project to calculate Terminal value in Discounted Cash Flow analysis. Terminal value is the value of an investment that is left at the end of a specific time period. The two approaches to calculate a terminal value are Perpetual growth and the Exit multiple methods.

Our client has provided us with the following information: Free cash flow: $500,000; WACC: 10%; Growth rate: 5%; EBITDA: $400,000; Trading multiple: 2x.

To know more about terminal value, visit the link-

https://www.veristrat.com/blog-valuation/discounted-cash-flow/

This article is written by our valuation analyst and provides all information about discounted cash flow analysis.

Discounted Cash Flow analysis (DCF) is a process wherein we calculate the value of an organization or an asset by using the concept of Time Value of Money.

03/02/2022

Our team is working on a project to analyze the overall cost of acquiring capital from different sources by using the weighted average cost of capital (WACC). WACC is the rate used to discount the future cash flows and terminal value to get present value. It is the return expectations of all providers of capital including debt and equity holders for investing in a project. WACC is used to assess investment opportunities and risks. Our client has provided us with the following information:

Debt to Equity ratio: 2:8; Beta: 1.5; Risk free rate: 2.5%; Interest on debt: 7%; Tax rate: 25%

To know more about WACC and WACC calculator, visit the link below –

https://www.veristrat.com/blog-valuation/wacc-formula-definition-and-uses-download-wacc-calculator/

Get the complete excel Template of WACC Calculator with Inbuild WACC formula. In this article we covered all the thing that you have to know about the WACC calculator formula...

02/25/2022

Business owners think that they know the value of their company better than anyone else as they live it on a daily basis. A business owner regardless of a public company or a private company needs to go ahead with his own best guess of the company’s value and require a valuation expertise IRC section 409A. A 409A valuation is an assessment of the fair market value of a company’s common stock. However, you need an independent appraisal done for a privately held company to find out the worth of your company.
Let's see how a 409a valuation works?

Episode 36 – https://youtu.be/bz0fzhguP7A

And,

https://www.veristrat.com/blog-valuation/how-a-409a-valuation-works/

02/23/2022

Our team is working on a project to analyze portfolio management. Portfolio management is the process of developing an investment strategy and asset allocation to meet investors' objectives and minimize risk to achieve superior returns. The portfolio management process involves planning, ex*****on, and feedback stages. Portfolio management is an ongoing and dynamic process according to changing circumstances and needs of the investor. The portfolio manager should achieve safety of investment, consistency of returns, capital growth, marketability, diversification, and favorable tax status for the investor.

To know more about portfolio management, visit the link -

https://www.veristrat.com/blog-valuation/portfolio-management/

In this article you will get the all information about portfolio management, it's meaning, importance and the process of porfolio managemenent.

02/17/2022

Raising capital through debt financing can be a very attractive option in an environment conducive to business growth. However, excess debt can lead to overwhelming financial problems and place a company’s future in jeopardy in times when the business is struggling. Corporate debt restructuring provides an effective solution to enhance liquidity & profitability by establishing fair and equitable debt repayments to creditors.

Let’s understand the viewpoints of both the parties involved in the debt restructuring process and various exit scenarios of the CDR process. Visit the link below –

https://www.veristrat.com/blog-valuation/corporate-debt-restructuring/

This article is written by our valuation analyst and provides all the information about corporate debt restructuring.

Visit our latest blog on Corporate Debt Restructuring. Which can be a very attractive option in an environment conducive to business growth.