Asset Valuation Using Discounted Cash Flows - v13 (Course Id 2113)

• Who is this course for?
  This course is designed for anyone needing Continuing Professional Education (CPE), particularly CPAs, accountants, and finance professionals interested in asset valuation.

• What is this course about or what problem does this course solve?
  The course provides an overview of the Discounted Cash Flow (DCF) method of asset valuation, explaining how to estimate future cash flows and apply risk-adjusted discount rates.

• How can the knowledge from this course be used?
  Learners can apply the knowledge to evaluate asset values more accurately using DCF models, which include estimating cash flows and choosing appropriate discount rate models.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  It is important because understanding and applying DCF valuation techniques is a key skill in financial reporting, investment analysis, and business valuation—core areas for accounting professionals.

• When is this course relevant or timely?
  The course is timely for professionals looking to refresh or expand their valuation skills, especially given its recent update in January 2024 and alignment with current valuation practices.

• How is a course like this consumed or used?
  This course is delivered as a self-study text-based module under the NASBA QAS program and includes review and final exam questions, requiring a passing score of 70% to earn CPE credit.

The purpose of this course is to provide an overview of the Discounted Cash-Flow (DCF) Method of valuation. The DCF method requires that an estimated cash flow and a risk-adjusted discount rate be determined. This course summarizes commonly-used cash-flow proxies and discount rate estimation tools. 

NASBA QAS - Text - NASBA Registry - 2113

Course Learning Objectives

1. Define assets and equity
2. Compare cash flow to U.S. GAAP-based net income
3. Recognize the relationship between risk and reward
4. Recognize commonly-used discount rate models
5. Understand how assets are valued using a discounted cash flow model

Chapter 1
Introduction

• Recognize commonly-used discount rate models

Chapter 2
Valuation - Background

• Recognize commonly-used discount rate models
• Describe commonly-used discount rate models

Chapter 3
Future cash flows

• Compare cash flow to U.S. GAAP-based net income
• Compare commonly-used discount rate models

Chapter 4
Discount rate

• Recognize the relationship between risk and reward
• Recognize commonly-used discount rate models

Chapter 5
The complete model - Value equals estimated cash-flow divided by the discount rate

• Understand how assets are valued using a discounted cash flow model
• Identify the components of the discounted cash flow model

Chapter 1 - Introduction

Review Questions

Chapter 2 - Valuation - Background

Review Questions

Chapter 3 - Future cash flows

Cash Flow vs. U.S. GAAP-based Net Income

Cash Flow Estimation Models

Cash Flow Model – EBITDA

Cash Flow Model – Income from Continuing Operations

Cash Flow Model – S&P Core Earnings

Summary – Cash Flow Estimation

Review Questions

Chapter 4 - Discount rate

Risk–Reward Relationship

Estimating the Discount Rate

Capital Asset Pricing Model (CAPM)

Arbitrage Pricing Model (APM)

Comparison of APT and CAPM

Summary – Discount Rate

Review Questions

Chapter 5 - The complete model - Value equals estimated cash flow divided by the discount rate

Conclusion

Review Questions

Glossary