PE ratio= Markert Cap/ NET PROFIT STEPS for coming up with IPO price band : 1) figure out the

comparable companies in the industry 2) calculate the PE Multiple for all these comparable companies 3) check for the net profit of the companies coming with the IPO 4) multiply industry PE range with the net profit of XYZ Companies which would give you the market cap range. 5) as a thumb rule give a discount of 20% on this estimated market cap range 6) divide the estimated market cap range with number of equity shares of XYZ Company to get the price band In financial model for any comparable calculation always use median Enterprise value/aggregate value = Market capitalization + net debt ( market price of long term debt + market price of short term debt + minority interest - cash) Capital Employed= Equity share capital + Reserve and surplus - Misc expenditure + Long term debt OR Fixed asset + Current asset - Current liabilities Capital Employed shows the real value and aggregate/enterprise value shows the estimated value. Valuation methodology: 1) PE RATIO 2) Agg Value/EBITDA The high Aggregate Value /EBITDA and low PE shows that company is good operationally but is high on debt. Forward PE = current market cap/net profit Forward PE of next year should be less than the current P/E because

the company would generally expect to make a profit in next year more than the current year.

Calculate for WACC Analysis :

1)Calculate lever beta from FACTSET/Bloomberg/Reuters/BSE Website 2) Calculate Debt equity ratio for all listed companies 3) Calculate unlevered beta from lever beta of these listed companies 4) Find the median of unlevered beta of all these companies which becomes industry median 5) Relever your unlevered beta to get the company specific beta 6) Calculate WACC for the private company

WACC= Ke* We/We+Wd + Ke* Wd/We +Wd