Measuring and Managing the Value of Companies 2600-MFBRdz1zfpOKWP

Upon completion of the course, the student:

Knowledge:
• Knows and understands the key valuation concepts, including Enterprise Value (EV), Equity Value, market value, and intrinsic value, and clarifies the context for their application. (S_W01) (K_W01).

• Knows and understands the fundamental assumptions of Value-Based Management (VBM), recognizing the key financial and non-financial value drivers that form the basis for strategic decisions. (S_W01) (K_W01).

• Knows and understands the main valuation paradigms: the Income Approach (intrinsic), the Market Approach (relative), and the Asset-Based Approach, explaining their theoretical underpinnings. (S_W01) (K_W01).

• Knows and understands the stages of a comprehensive business valuation process, from defining the purpose and standard of value, through due diligence and financial forecasting, to the application of valuation models and the synthesis of results into final conclusions. (S_W02) (K_W02).

• Knows and understands the mechanics and theoretical justification for various valuation methods, including asset-based methods, Discounted Cash Flow (DCF), Adjusted Present Value (APV), Dividend Discount Model (DDM), and market multiples (e.g., EV/EBITDA, P/E). (S_W02) (K_W02).

Knows major strategies for enterprise value creation, such as organic growth initiatives, mergers and acquisitions (M&A), and Leveraged Buyouts (LBOs). (S_W02) (K_W02).

• Demonstrates an advanced understanding of the limitations of conventional valuation models in specific contexts (e.g., valuing startups, companies in restructuring) and explains the theoretical rationale for applying alternative methods, such as real options analysis. (S_W03) (K_W03).

• Knows and understands at an advanced level the impact of macroeconomic, industry-specific, and firm-specific factors on enterprise value, and is able to link them to specific inputs in valuation models (e.g., connecting industry growth rates to cash flow projections). (S_W03) (K_W03).

• Knows and understands the common challenges and cognitive biases in the valuation process, such as excessive optimism in forecasts, inconsistent assumptions, or the improper use of market multiples. (S_W05) (K_W05).

• Knows and understands the diagnostic frameworks used to assess specific valuation problems for different types of enterprises, including high-growth startups, cyclical companies, firms with significant intangible assets, and entities at risk of bankruptcy. (S_W05) (K_W05).
• (S_U06) is able to individually and collaboratively diagnose, analyze, and report on complex and non-routine problems in accounting and financial auditing within the scope of evaluating enterprise development projects, as well as effectively present findings and engage in debate on these topics – also in English – using advanced ICT tools.
• (S_U07) is able to effectively plan, organize, and manage teamwork, and take a leading role in team activities.
• (S_U08) demonstrates the capacity for continuous self-education, upgrading acquired qualifications, and actively supporting others in their professional and academic development.

Skills:
• Can construct dynamic, multi-year financial models in a spreadsheet environment to forecast a company's financial statements and determine Free Cash Flow to the Firm (FCFF) and Free Cash Flow to Equity (FCFE). (S_U01) (K_U01).

• Can perform sensitivity and scenario analyses to assess the robustness of valuation results and to identify key value drivers and the most critical assumptions. (S_U01) (K_U01).

• Is able to conduct a valuation of any type of entity, correctly interpreting complex social, political, legal, economic, and ecological processes and their impact on enterprise value. (S_U02) (K_U02).

• Can prepare professional-grade reports (e.g., investment memoranda or valuation reports), both independently and as part of a team, effectively communicating the final value conclusion and the key arguments that support it. (S_U03) (K_U03).

• Is able to plan and organize individual and team-based work in the process of valuing enterprises and preparing value-growth strategies, which includes developing work plans, delegating tasks, resolving substantive disputes, and integrating individual contributions into a cohesive final product. (S_U04) (K_U05).

• Can independently source and critically evaluate new valuation techniques, scientific research findings, and evolving industry best practices, utilizing professional and academic information sources. (S_U05) (K_U06).

Attitudes:
• Is ready to critically evaluate the assumptions underlying financial forecasts, management projections, and third-party reports by identifying potential sources of cognitive bias or manipulation. (S_K01) (K_K01).

• Understands the ethical and social implications of the process of valuing and shaping enterprise value. (S_K02) (K_K03).

• (S_K04) is committed to continuous adherence to and development of professional ethical standards associated with accounting and auditing.

The learning assessment will be based on:
- a written final assessment (multiple-choice questions and 2 problem-solving tasks), and
- a project – group work (3–4 students).

The weighting of each component will be as follows:
- written final assessment – 80%
- project – 20%

Supplementary literature to the materials provided by the lecturer:
1. McKinsey & Company Inc., Tim Koller, Marc Goedhart, David Wessels (2015), Measuring and Managing the Value of Companies, John Wiley & Sons,
2. Grzegorz Urbanek (2023) Tytuł: Jak marka buduje wartość przedsiębiorstwa. Zarządzanie wartością i wycena marki CeDeWu
3. Szablewski Andrzej., Tuzimek Rafał. (2008), Wycena i zarządzanie wartością firmy. Poltext, Warszawa
4. Szczepankowski Piotr (2007), Wycena i zarządzanie wartością przedsiębiorstwa, Wydawnictwo Naukowe PWN, Warszawa
5. Aswath Damodaran (2016), Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, John Wiley & Sons,