Corporate finance writing sample: valuation report section
Business valuation is central to corporate finance because it helps investors, managers, lenders, and strategic buyers estimate the economic value of a business based on expected cash flows, risk, growth potential, capital structure, and market comparables. A strong valuation report does not simply present a target price; it explains the assumptions, financial logic, and sensitivity of the valuation outcome.
In a discounted cash flow analysis, projected free cash flows are estimated using assumptions related to revenue growth, operating margin, capital expenditure, working capital requirements, tax rate, and long-term growth. These cash flows are discounted using the weighted average cost of capital, which reflects the company’s cost of equity, cost of debt, tax shield, and capital mix. The terminal value typically represents a major share of enterprise value, making terminal growth and exit multiple assumptions especially important.
A well-structured valuation section should balance numerical detail with business interpretation. Comparable company analysis can support market-based valuation by comparing EV/EBITDA, P/E, EV/Sales, and other relevant multiples across peer companies. Sensitivity analysis further improves the quality of the report by showing how valuation changes under different discount rate, growth, and margin scenarios. This approach helps readers understand the value range, key drivers, and risks behind the final recommendation.