Does the report clearly discuss the criteria for selection, which industry-specific multiples were used, and why they are or are not appropriate?
The report has been well utilized with no detail being left out. The multiple that has been used in this report is EV/Subscriber that mainly focuses on subscriber-based business. Disney is a company that not only deals with entertainment but also offers cable and direct to home connections. The various industry-specific multiples that exist in the business sector are known to be used in the determination of the current value of any company. However, it is important to note that the multiples do not apply to every company since each company has a different organizational structure that specifies it to a unique multiple. The multiple used is very appropriate since it has been able to provide the correct estimate of the value of the company. On the other hand, the multiple is specified and suited for these kinds of companies that deal with cable and subscriptions to the clients either directly to their homes or indirectly.
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Are the transactions appropriate as of the valuation date? If the transaction data is somewhat removed from the valuation date: discuss the reason for its use. Is there an adequate discussion of which multiple was used and why it was used?
The transactions are correct and appropriate as per the valuation date. Nothing has been left out and it is clear that the valuation was conducted in a clear and careful manner. The transactions are very important especially when provided together with their respective dates since it will be clear on how the company has been progressing as well as the direction it is heading in the future. The dates will also give a clear picture to the investors on how the company has been doing for the past five years now. In addition to that, the valuation can also be used to help the company in making future and good decision regarding the future of the company. However, the discussion does not include a clear discussion of the multiple that was used in the valuation process. The interview did not provide the reason as to why the multiple was used as well as the advantages of the multiple.
Is there a discussion of when to use or not use premium or discounts when using the industry-specific multiples?
The discussion of when to use or not to use premium or discounts regarding industry-specific multiples has not been included in the interview. As much as they considered everything else, they seem to have forgotten this important detail which also counts as a significant segment to the industry. However, whether the discussion was included or not, it is clear that the most suitable valuation multiple is EV/Subscriber that is specifically meant for subscriber-based business and other network providers.
Can the analysis be replicated based on information in the report?
On an important note, it is better to understand that the information in the report cannot be replicated since it belongs to this specific company. The information is also based on that particular time frame. Additionally, it might not apply to other companies since they might not be suitable to use the multiple that was used in this evaluation process, therefore, it will be wise to conduct fresh analysis to the industries. Replicating this analysis will not be possible since one will be simply faking the analysis of other companies and this can cause serious damages to those who wish to invest in the business. In other words, they will be committing fraud since they will be faking their account statements. This will make them appear profitable to the investors where else it is actually not true. Therefore, replicating is not the best option at the end of the day. This information only belongs to this company alone.
