The Company Valuation

Abstract

The company valuation is a relative new concept in Colombia taht is taking enough importance by the global context of the economy. In theory, there are several ways of evaluating a company which varies depending on the goal that is sought to do them; however, the methodologies of the cash flow stand out, more exactly the free cash flow and discounted method. For both it is started from teh concept of the cash flow in wich EBITDA, the assets and passive movement, the inversion flow and the financial flow. In order to make a valuation, the most important thing is to have the company financial projections, specially in what has to do*with the profit and loss statement, balance sheet and projected cash flow. Finally, it is necessary to calculate the cost of capital, rate to which are discounted the future flows (free and available) and the residual value wich represents the company gains toward future.