What is valuation, and why is it important?

Valuation is the process used to determine how much a business or any other asset is worth. Valuing companies is important because, in corporate finance as in our daily lives, you never want to pay more for something than it’s worth. Fair market value (FMV) thus determines the structure of a mergers and acquisitions (M&A) deal, pricing of shares of a company in an initial public offering, or how much equity in a startup is worth. Because accurate valuation requires projecting future income generated by the company or asset in question, however, this process can be challenging and unavoidably involves uncertainty. It is particularly difficult when attempting to determine the value of a startup, which by definition lacks the track record of financial statements of more established companies. Traditional methods of valuing companies use classic discounted cash flow analysis to build a simple model of future revenues and determine their present value based on the time value of money. More sophisticated valuation methodologies use statistical techniques such as linear regression analysis and/or simulations using the Monte Carlo method to better incorporate sources of risk and uncertainty.

What kinds of careers can I have with skills in valuation?

Any CFO or CEO of a company needs a basic knowledge of the principles of valuation in order to understand what their company is worth. This background is essential to making decisions between different corporate financing strategies, such as taking on debt versus selling equity shares, going public, or being acquired. A strong understanding of valuation is especially critical for startup founders, who must be able to negotiate with potential angel investors or venture capital funds over the likely future worth of a company that may not yet have any sales. Careers in finance require more than a familiarity with the principles of valuation - they require expertise. Valuing companies and assets is a central responsibility of the financial analysts employed by investment banks, private equity firms, hedge funds, and other financial institutions, where millions or even billions of dollars can be at stake depending on the accuracy of a valuation. As such, these experts often have masters of business administration (MBA) degrees, and are highly compensated; according to the Bureau of Labor Statistics , analysts in securities and other financial investment activities received a median salary of $101,410 in 2018.

Can I learn about valuation methodologies by taking online courses on Coursera?

Certainly. Coursera offers courses and Specializations covering the basics of valuation as well as more advanced techniques, as well as courses geared towards the specific context of startup valuations. These courses are offered by top-ranked universities and business schools, including the University of Pennsylvania, Duke University, and the University of Michigan, and provide the same learning experience as on-campus students at a significantly lower cost. You don’t need to be an expert in valuation (yet) to understand that that combination is quite a compelling value proposition.

What skills or experience do I need to already have, before starting to learn valuation?

To learn valuation, your skills and experience would likely include a sense of business operations knowledge, good accounting and financial acumen, and possibly a four-year college or university degree in finance, accounting, or business administration. Having solid work experience on a company financial team can also help you understand business valuation more clearly. Valuation for companies and organizations generally includes finding the value of the founder’s ownership prior to starting the business and after subsequent funding. In using valuation techniques to determine the financial health and status of a company, you may need to learn to read financial statements and be clear on cash flows, income statements, and the time value of cash. All of these skills and experience would be useful to already have before starting to learn valuation.

What kinds of people are best suited for roles in valuation?

The kinds of people best suited for roles in valuation are numbered-focused persons who can help companies understand the clear value of their business. Doing valuation requires someone who is sharp with details, has strategic and analytical understanding of businesses, knows how they operate, what partnership opportunities may exist, and is able to see the long-term outlook. People who work in valuation may have a convincing personality, with the skill to show senior business executives the true value of their business.

How do I know if learning valuation is right for me?

You may find that learning valuation is right for you if you are a person who likes to dig into the financial details of a company, while also being able to step back and see a bigger long-term picture for the company. This takes a certain analytical skillset, as well as having a professional demeanor, with good communications skills. You would need to be comfortable with financial software tools and be able to create presentations to display to business teams on your valuation work. Learning the fundamentals of valuation will give you a clear understanding of a company’s financial status, its ability to attract funding, and if there may be strategic partners to fold operations within to make the business even stronger. If you want to know the basics of company financial operations, then learning valuation might be a good step forward in your career.

What are the benefits of taking an online Valuation course?

Online Valuation courses offer a convenient and flexible way to enhance your knowledge or learn new Valuation skills. Choose from a wide range of Valuation courses offered by top universities and industry leaders tailored to various skill levels.

What Valuation courses are best for training and upskilling employees or the workforce?

When looking to enhance your workforce's skills in Valuation, it's crucial to select a course that aligns with their current abilities and learning objectives. Our Skills Dashboard is an invaluable tool for identifying skill gaps and choosing the most appropriate course for effective upskilling. For a comprehensive understanding of how our courses can benefit your employees, explore the enterprise solutions we offer. Discover more about our tailored programs at Coursera for Business here .

Top Valuation Courses - Learn Valuation Online

Results for "valuation"

Status: Free
Erasmus University Rotterdam
Advanced Valuation and Strategy - M&A, Private Equity, and Venture Capital
Skills you'll gain: Strategic Decision-Making, Business Valuation, Private Equity, Mergers & Acquisitions, Game Theory, Corporate Strategy, Financial Analysis, Business Strategy, Investment Banking, Financial Modeling, Cash Flows, Growth Strategies, Corporate Finance
Build toward a degree
4.6
Rating, 4.6 out of 5 stars
1.3K reviews
Advanced · Course · 1 - 3 Months
Coursera Project Network
Discounted Cash Flow Modeling
Skills you'll gain: Financial Forecasting, Business Valuation, Financial Modeling, Financial Analysis, Cash Flows, Investment Banking, Capital Markets
4.3
Rating, 4.3 out of 5 stars
723 reviews
Intermediate · Guided Project · Less Than 2 Hours
Duke University
Startup Valuation Methods
Skills you'll gain: Financial Modeling, Entrepreneurial Finance, Business Valuation, Excel Formulas, Due Diligence, Investments, Private Equity, Securities (Finance), Entrepreneurship, Cash Flows, Risk Analysis
4.4
Rating, 4.4 out of 5 stars
707 reviews
Intermediate · Course · 1 - 3 Months
Yonsei University
Valuation and Financial Analysis For Startups
Skills you'll gain: Capital Budgeting, Financial Statements, Financial Statement Analysis, Business Valuation, Financial Analysis, Cash Flow Forecasting, Strategic Decision-Making, Cost Benefit Analysis, Financial Modeling, Income Statement, Return On Investment, Entrepreneurial Finance, Financial Forecasting, Cash Flows, Balance Sheet, Microsoft Excel, Financial Management, Investment Management, Finance, Project Finance
4.4
Rating, 4.4 out of 5 stars
497 reviews
Beginner · Specialization · 3 - 6 Months
University of Illinois Urbana-Champaign
Investment Banking: Financial Analysis and Valuation
Skills you'll gain: Financial Statement Analysis, Investment Banking, Financial Forecasting, Business Valuation, Financial Analysis, Financial Modeling, Mergers & Acquisitions, Income Statement, Balance Sheet, Corporate Finance, Cash Flows, Benchmarking
Build toward a degree
4.5
Rating, 4.5 out of 5 stars
158 reviews
Intermediate · Course · 1 - 3 Months
Coursera Project Network
Stock Valuation with Dividend Discount Model
Skills you'll gain: Equities, Business Valuation, Market Data, Financial Analysis, Financial Modeling
4.5
Rating, 4.5 out of 5 stars
176 reviews
Intermediate · Guided Project · Less Than 2 Hours
University of Illinois Urbana-Champaign
Mergers and Acquisitions
Skills you'll gain: Mergers & Acquisitions, Private Equity, Investment Banking, Financial Statement Analysis, Business Valuation, Equities, Financial Forecasting, Financial Analysis, Capital Markets, Financial Modeling, Corporate Accounting, Financial Accounting, Corporate Tax, Accounting, Price Negotiation, Corporate Finance, Income Statement, Balance Sheet, Investments, Corporate Strategy
4.6
Rating, 4.6 out of 5 stars
485 reviews
Intermediate · Specialization · 3 - 6 Months
University of Pennsylvania
Business and Financial Modeling
Skills you'll gain: Risk Modeling, Financial Statements, Probability Distribution, Mathematical Modeling, Statistical Modeling, Portfolio Management, Regression Analysis, Business Modeling, Financial Modeling, Strategic Decision-Making, Risk Management, Presentations, Decision Making, Data Visualization, Microsoft PowerPoint, Predictive Modeling, Investment Management, Spreadsheet Software, Google Sheets, Excel Formulas
4.5
Rating, 4.5 out of 5 stars
11K reviews
Beginner · Specialization · 3 - 6 Months
University of Illinois Urbana-Champaign
Forecasting Financial Statements & Valuation for Accountants
Skills you'll gain: Financial Forecasting, Financial Statement Analysis, Business Valuation, Financial Statements, Financial Reporting, Cash Flow Forecasting, Financial Analysis, Financial Modeling, Balance Sheet, Generally Accepted Accounting Principles (GAAP), Income Statement, Trend Analysis, Corporate Finance
Build toward a degree
4.6
Rating, 4.6 out of 5 stars
33 reviews
Intermediate · Course · 1 - 3 Months
University of Illinois Urbana-Champaign
Finance of Mergers and Acquisitions: Valuation and Pricing
Skills you'll gain: Mergers & Acquisitions, Business Valuation, Private Equity, Price Negotiation, Financial Analysis, Financial Modeling, Corporate Finance, Corporate Strategy, Market Data, Cash Flows, Risk Analysis
4.7
Rating, 4.7 out of 5 stars
230 reviews
Intermediate · Course · 1 - 3 Months
Coursera Project Network
Profit Analysis using Economic Value Added
Skills you'll gain: Financial Statement Analysis, Financial Analysis, Profit and Loss (P&L) Management, Capital Budgeting, Performance Metric, Operating Expense, Investments, Corporate Finance
4.6
Rating, 4.6 out of 5 stars
183 reviews
Intermediate · Guided Project · Less Than 2 Hours
Status: Free
Università Bocconi
Private Equity and Venture Capital
Skills you'll gain: Private Equity, Business Valuation, Investments, Financial Management, Corporate Finance, Tax Laws, Entrepreneurship, Due Diligence, Tax, Negotiation, Law, Regulation, and Compliance
Build toward a degree
4.8
Rating, 4.8 out of 5 stars
8.6K reviews
Mixed · Course · 1 - 3 Months