Adroit Valuations Senior Technical Manager Interview Questions, Process, and Tips

Valuation is the process of determining the worth of an asset or company.

• Valuation involves analyzing various factors such as financial performance, market conditions, and future potential.

• Common methods of valuation include discounted cash flow, comparable company analysis, and precedent transactions.

• Valuation is important for making investment decisions, mergers and acquisitions, and financial reporting.

• The value of ...read more

Various methods can be used in valuation such as income approach, market approach, and asset-based approach.

• Income approach: Based on the present value of expected future income or cash flows generated by the asset.

• Market approach: Compares the asset to similar assets that have been sold recently in the market.

• Asset-based approach: Values the asset based on its underlying assets and liabilities.

• Cost approach: Determine...read more

Obsolescence refers to the process of becoming outdated or no longer in use due to advancements in technology or changes in market demand.

• Obsolescence can occur due to technological advancements making older products or systems obsolete.

• It can also happen when there is a shift in consumer preferences or market demand for newer products.

• Planned obsolescence is a strategy used by companies to intentionally make products ...read more

There are three types of obsolescence: technological, functional, and economic.

• Technological obsolescence occurs when a new technology makes the current one outdated.

• Functional obsolescence happens when a product is no longer useful due to changes in consumer preferences or needs.

• Economic obsolescence occurs when the cost of maintaining or using a product outweighs its benefits.

Commonly used indices in valuation include price-to-earnings ratio, price-to-book ratio, and discounted cash flow.

• Price-to-earnings ratio (P/E ratio) compares a company's current share price to its earnings per share.

• Price-to-book ratio compares a company's market value to its book value.

• Discounted cash flow (DCF) estimates the value of an investment based on its future cash flows.