Watham Inc. Case Study

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Waltham Inc Case Study [Name of the Writer] [Name of the Institution] Waltham Case Study Introduction This case study sets the scenario of an acquisition process where Waltham, Inc. Plans to acquire Artforevever.com. Waltham, Inc. is a public company that deals in vintage shoes restoration business and is seeking new opportunities to expand the business and grow. On the other hand, Artforever.com is a private firm that deals in vintage photographs and damaged artwork restoration business. Now, Waltham, Inc. conducts an analytical review of different factors that would indicate whether the acquisition process should be carried out or not. The practice of business valuation The first method of business valuation, discounted cash flow (the "DCF"), is based on the idea that the economic value of the asset is equal to the amount of future cash flow Company updated to reflect its risk. The discount rate used is the weighted average cost of capital. Is calculated as follows: • cash flows discounted at the explicit forecast horizon (visibility of the company); • the terminal value from estimating a growth rate to infinity; • the value of equity is the difference between the asset value and the resulting economic value of the bank debt and net financial and possibly other elements. The second evaluation method, the method of multiple analog approach is compared with other companies in the same sector. In this approach, the economic value of the assets of a company is the result of a multiple of its earnings: operating profit multiple or multiple of EBITDA. The multiple can be considered a multiple or a multiple stock transaction. It comes from the observation of the value of similar businesses. To obtain the value of equity, we subtract the value of the bank debt and net financial and possibly other elements.
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