Investment Banking Retail Valuation Service Process
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Investment Banking Retail Valuation Service Process
Comprehensive retail valuation service, from needs identification to final report presentation and transaction execution, ensuring client-tailored, accurate financial insights.
1
Identify the retail client's needs and objectives
2
Conduct analysis of the client's industry
3
Obtain historical financial information of the client
4
Prepare cash flow projections
5
Calculate the client's financial ratios and other performance metrics
6
Perform valuation using methods such as Discounted Cash Flow (DCF), Comparables, and Precedent Transactions
7
Draft a preliminary retail valuation report
8
Approval: Senior Analyst for preliminary report
9
Identify and analyze key value drivers
10
Discuss valuation assumptions and results with the client
11
Adjust valuation model as per client feedback
12
Finalize the retail valuation report
13
Approval: Director for final report
14
Present final valuation report to the client
15
Negotiate contracts and terms with the client based on the valuation
16
Execute transactions such as mergers, acquisitions, or divestitures if necessary
17
Follow up with the client to ensure satisfaction
18
Document the entire process for audit purposes
19
Prepare a summary of the engagement for internal use
Identify the retail client's needs and objectives
This task involves understanding the specific needs and objectives of the retail client. It is important to have a clear understanding of what the client hopes to achieve through the valuation process. This information will play a crucial role in guiding the analysis and determining the appropriate valuation methods. What are the client's short-term and long-term goals? Are there any specific concerns or challenges they want to address? The desired result is to have a comprehensive understanding of the client's needs and objectives, which will serve as a foundation for the rest of the valuation process. To complete this task, you will need to hold discussions with the client and possibly conduct market research to gain insights into industry trends and challenges.
Conduct analysis of the client's industry
This task involves conducting an in-depth analysis of the client's industry. Understanding the industry dynamics and trends is crucial for accurately valuing a retail business. What are the key drivers of growth in the industry? How is the industry affected by economic conditions or regulatory changes? Are there any emerging trends or disruptive technologies? By thoroughly analyzing the industry, you will be able to identify potential risks and opportunities that may impact the client's valuation. The desired result is to have a comprehensive industry analysis that will inform the valuation process. To complete this task, you will need access to industry reports, market data, and expert insights.
Obtain historical financial information of the client
This task involves gathering historical financial information of the retail client. Analyzing past performance is essential for understanding the financial health and trends of the business. What are the client's historical revenue, profitability, and growth rates? How have they performed compared to their industry peers? By obtaining and reviewing historical financial statements, you will be able to assess the client's financial strengths and weaknesses. The desired result is to have a complete set of historical financial information that will serve as the basis for the valuation analysis. To complete this task, you may need to request financial statements from the client or access publicly available financial data.
Prepare cash flow projections
This task involves preparing cash flow projections for the retail client. Projecting future cash flows is crucial for estimating the value of the business. How is the client expected to generate revenue in the future? What are the anticipated costs and expenses? By meticulously projecting cash flows, you will be able to assess the client's future financial performance. The desired result is to have accurate cash flow projections that will be used in the valuation analysis. To complete this task, you will need to use financial modeling techniques and tools, and possibly consult with industry experts.
Calculate the client's financial ratios and other performance metrics
This task involves calculating the client's financial ratios and other performance metrics. Assessing financial ratios and metrics is essential for gaining insights into the client's financial performance and profitability. What are the client's liquidity, solvency, and profitability ratios? How do they compare to industry benchmarks? By calculating and analyzing these ratios, you will be able to assess the client's financial health and performance relative to their peers. The desired result is to have a comprehensive set of financial ratios and metrics that will inform the valuation analysis. To complete this task, you will need to use financial analysis tools and financial statements.
1
Liquidity ratios
2
Solvency ratios
3
Profitability ratios
Perform valuation using methods such as Discounted Cash Flow (DCF), Comparables, and Precedent Transactions
This task involves performing the valuation of the retail client using different methods such as Discounted Cash Flow (DCF), Comparables, and Precedent Transactions. Each method offers unique insights into the value of the business and provides a range of valuation estimates. By utilizing multiple methods, you will be able to cross-validate the results and arrive at a comprehensive valuation range. The desired result is to have valuation estimates based on DCF, Comparables, and Precedent Transactions that will serve as the foundation for the valuation report. To complete this task, you will need to use appropriate valuation models and industry data.
1
Discounted Cash Flow (DCF)
2
Comparables
3
Precedent Transactions
Draft a preliminary retail valuation report
This task involves drafting a preliminary retail valuation report. The valuation report is a critical document that summarizes the analysis, assumptions, and conclusions of the valuation process. What are the key findings from the valuation analysis? What are the valuation range and key assumptions? By drafting a preliminary valuation report, you will be able to communicate the findings to the client and gather their feedback. The desired result is to have a comprehensive and well-structured preliminary valuation report. To complete this task, you will need to use a template or format approved by the organization.
Approval: Senior Analyst for preliminary report
Will be submitted for approval:
Identify the retail client's needs and objectives
Will be submitted
Conduct analysis of the client's industry
Will be submitted
Obtain historical financial information of the client
Will be submitted
Prepare cash flow projections
Will be submitted
Calculate the client's financial ratios and other performance metrics
Will be submitted
Perform valuation using methods such as Discounted Cash Flow (DCF), Comparables, and Precedent Transactions
Will be submitted
Draft a preliminary retail valuation report
Will be submitted
Identify and analyze key value drivers
This task involves identifying and analyzing the key value drivers of the retail client's business. Value drivers are the factors that contribute significantly to the value of the business. What are the client's unique selling proposition and competitive advantages? How do these factors impact the valuation? By identifying and analyzing key value drivers, you will be able to assess the client's competitive position and evaluate their growth potential. The desired result is to have a comprehensive understanding of the key value drivers that will inform the valuation analysis. To complete this task, you will need to engage with the client and possibly conduct market research.
Discuss valuation assumptions and results with the client
This task involves discussing the valuation assumptions and results with the retail client. It is important to engage with the client and ensure their understanding and agreement with the valuation analysis. What are the key assumptions made in the valuation? How do the valuation results compare to the client's expectations? By discussing the assumptions and results, you will be able to address any concerns or discrepancies and align the client's expectations with the valuation analysis. The desired result is to have a clear understanding and agreement on the valuation assumptions and results. To complete this task, you will need to schedule a meeting or call with the client.
Adjust valuation model as per client feedback
This task involves adjusting the valuation model based on the retail client's feedback. Client feedback is crucial for ensuring the accuracy and relevance of the valuation analysis. What are the specific adjustments or modifications requested by the client? How do these adjustments affect the valuation results? By incorporating client feedback, you will be able to address any concerns or discrepancies and refine the valuation model accordingly. The desired result is to have an updated valuation model that reflects the client's feedback. To complete this task, you will need to revise the valuation model and conduct additional analysis if necessary.
Finalize the retail valuation report
This task involves finalizing the retail valuation report based on the analysis, feedback, and adjustments. The valuation report is a critical document that communicates the final valuation results and conclusions to the client. What are the key findings and conclusions from the analysis? How does the final valuation range compare to the preliminary valuation? By finalizing the valuation report, you will be able to capture all the necessary details and present a comprehensive and accurate valuation. The desired result is to have a finalized and polished retail valuation report. To complete this task, you will need to review and incorporate all relevant analysis and feedback.
Approval: Director for final report
Will be submitted for approval:
Identify and analyze key value drivers
Will be submitted
Discuss valuation assumptions and results with the client
Will be submitted
Adjust valuation model as per client feedback
Will be submitted
Finalize the retail valuation report
Will be submitted
Present final valuation report to the client
This task involves presenting the final retail valuation report to the client. The presentation provides an opportunity to explain the analysis, results, and conclusions of the valuation process. How does the final valuation range compare to the client's expectations? What are the key factors that contribute to the valuation? By presenting the final valuation report, you will be able to gather the client's feedback and address any questions or concerns they may have. The desired result is to have a clear and concise presentation that effectively communicates the valuation results. To complete this task, you will need to schedule a presentation with the client.
Negotiate contracts and terms with the client based on the valuation
This task involves negotiating contracts and terms with the retail client based on the valuation results. The valuation provides a basis for determining the value of the business and can influence the terms of any contractual agreements. What are the specific contractual terms or negotiations influenced by the valuation? How does the valuation impact the client's bargaining power? By negotiating contracts and terms based on the valuation, you will be able to ensure a fair and mutually beneficial agreement. The desired result is to have negotiated contracts and terms that align with the valuation results. To complete this task, you will need to engage in contractual discussions with the client.
Execute transactions such as mergers, acquisitions, or divestitures if necessary
This task involves executing transactions such as mergers, acquisitions, or divestitures based on the valuation results. The valuation can guide decision-making and facilitate the successful completion of transactions. What are the specific transactions or deals influenced by the valuation? How does the valuation impact the negotiation and execution of these transactions? By executing transactions based on the valuation, you will be able to maximize value and ensure a smooth transaction process. The desired result is to successfully execute transactions aligned with the valuation. To complete this task, you will need to engage in transactional discussions and coordinate with legal and financial experts.
Follow up with the client to ensure satisfaction
This task involves following up with the retail client to ensure their satisfaction with the valuation process and outcomes. The follow-up is important for maintaining a strong relationship with the client and addressing any remaining concerns or questions. How satisfied is the client with the valuation results and the overall process? Are there any outstanding issues or follow-up actions required? By following up with the client, you will be able to provide additional support and demonstrate commitment to their satisfaction. The desired result is to have a satisfied and well-informed client. To complete this task, you will need to schedule a follow-up call or meeting with the client.
Document the entire process for audit purposes
This task involves documenting the entire retail valuation process for audit purposes. Documentation is essential for ensuring transparency, accountability, and compliance with regulatory requirements. What are the key steps, analyses, and decisions made throughout the valuation process? How were the valuation assumptions and methods determined? By documenting the entire process, you will be able to provide a clear trail of the valuation activities and ensure that the process can be audited and reviewed if necessary. The desired result is to have a comprehensive and well-documented record of the retail valuation process. To complete this task, you will need to maintain records, create reports, and document key discussions and decisions.
Prepare a summary of the engagement for internal use
This task involves preparing a summary of the retail valuation engagement for internal use. The summary provides an overview of the engagement, key findings, and outcomes. What were the main highlights of the engagement? What are the key takeaways and lessons learned? By preparing a summary, you will be able to share insights and knowledge gained from the engagement with the internal team. The desired result is to have a concise and informative summary that captures the essence of the engagement. To complete this task, you will need to review the valuation report and gather relevant information.
