BUSINESS VALUATION MODEL USING DISCOUNTED CASH FLOW METHOD AND RELATIVE VALUATION FOR DIGITAL STARTUP IN LPIK ITB: CASE STUDY OF PT. XYZ

• Main Author: Ayu Savitri, Sekar
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/45926
• Institution: Institut Teknologi Bandung

In recent years, startups have begun to develop in Indonesia. Seen that the market in Indonesia has been able to develop business in the field of information technology. Indonesia is in fifth place with the most startups in the world. The startup growth that occurred in Indonesia is directly proportional to the population of internet users throughout Indonesia. As for the internet as a source of unlimited income, this is related to the meeting between sellers and buyers online without having to meet in person to make transactions. Technological developments related to the number of internet users are also followed by the rapid growth of this industry, such as e-commerce companies engaged in Business-to-Customer (B2C) and Customer-to-Customer (C2C), online media, and digital startups that are beginning to be seen its presence in this technology. PT. XYZ is a digital startup that under LPIK ITB incubation. The value of this startup lies entirely in its future growth potential. Having a good financial report is one way of seeing the company's future, whether it's getting better or not. A good company is a company that has value. This is the purpose of company valuation (business valuation) to carry out the calculation process to obtain an estimate of the value of the company. Discounted Cash Flow (DCF) is one of the basic approaches to valuation and is the foundation of all other valuation approaches. DCF analysis requires a discount rate that takes into account the time value of money (the risk-free rate) plus the risk-return they take. The DCF using Free Cash Flow to the Firm (FCFF) generate a company value of Rp 236.937.926.393 for WACC of 8.18% and Rp 10.044.235.970 for WACC of 50%. Besides using the DCF Method, this study also using Relative Valuation. Relative Valuation calculation is also used to compare PT. XYZ with the industry where the company is located. The tool used to calculate relative valuation is price multiples. The equity value (future value) for this company using relative valuation is Rp 8.273.382.003. PT. XYZ has good financial performance. This can be influenced by the company's superior performance when measured for new companies. The value of the equity value can attract the attention of investors to start investing in PT. XYZ by considering company performance. From the calculation of relative valuation, PT. XYZ has a company value far above other companies in the same sector. This has become the concern of investors who want to invest in this company or attract the attention of large companies who want to acquire PT. XYZ. This study also does risk management using Monte Carlo either using WACC at 8.18% or 50%, PT. XYZ shows that the company has a possibility of this business can meet the target of venture capital (investors) and acquirers is above 90%. It can also be confirmed that this business is financially feasible. This company has a potential business value below zero of around 10%. Besides using Monte Carlo, this study also does the scenario analysis with three scenarios. Other than that, this study does a sensitivity analysis to find out the most sensitive variable that affects the valuation calculation. This study also provides output in the form of a valuation template that will be used for companies to conduct valuations in the future.