Reddit reviews Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions

Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions by Pearl and Rosenbaum.

Damodaran on Valuation: Security Analysis for Investment and Corporate Finance by Damodaran.


Both of these books provide solid walkthroughs of valuation.

If you want the Coles Notes of a simple DCF, here they are:

• Use previous financials to project revenues and expenditures going forward;
  
  
• From that, determine FCF;
  
  
• Determine WACC and use that to discount FCF into the future;
  
  
• If you don't want to forecast into infinity, determine a terminal value using DDM/GGM or some other metric (even BV);
  
  
• Add all discounted FCFs to terminal value to determine value of the business;
  
  
• Or divide by shares outstanding to determine intrinsic share value.
  
  Edit: Apparently Damodaran put that entire text online for free: http://raj.rajaditi.com/finance/corp/pages.stern.nyu.edu/_adamodar/New_Home_Page/valn2ed/book.htm

Sorry, couldn't remember. The Rosenbaum/Pearl book:

http://www.amazon.com/Investment-Banking-Valuation-Leveraged-Acquisitions/dp/0470442204/ref=sr_1_1?ie=UTF8&qid=1368650208&sr=8-1&keywords=investment+banking

My go-to book

As a person in investment banking, the best way to learn forecasting/financial analysis was with a book tailored to this industry.

Macabacus.com is also a phenomenal learning source (and their excel plugin is amazing).

I developed ASimpleModel for those new to financial modeling. The site introduces the three primary financial statements in the context of Excel / modeling. From there it will walk you through an integrated model, DCF and LBO. All material is video driven with notes and templates available for download. With that introduction there are quite a few more advanced options available:

Free Resources:

http://ASimpleModel.com

www.Macabacus.com

NYU Stern Prof. Aswath Damodaran - check his website. It is an incredible resource.

Specific to investment banking, but a great resource:

http://www.amazon.com/Investment-Banking-Valuation-Leveraged-Acquisitions/dp/0470442204

I have this book and actually worked with these guys (Rosenbaum and Pearl). It's more banking-specific, but the valuation information is more universal. They even walk you through the modeling/comps/valuation formulas step-by-step. Fairness opinions will require knowledge of a lot of the information covered in the textbook.

http://www.macabacus.com

http://www.amazon.com/Investment-Banking-Valuation-Leveraged-Acquisitions/dp/0470442204

http://www.amazon.com/Valuation-Measuring-Managing-Companies-Edition/dp/0470424656

And a little later down the road upon graduation: http://www.cfainstitute.org/programs/cfaprogram/Pages/index.aspx