← Financial Modeling and Company Valuation

DCF and multiples valuation

Module 03 / 5 · 65 min

Value a company from its free cash flow, a cost of capital and a terminal value, bridge to equity per share, and cross-check with P/E, EV/EBITDA and P/B when Ethiopian comparables are scarce.

In this module you will learn to

Compute free cash flow to the firm from a three-statement forecast
Discount cash flows at WACC and estimate a terminal value with the growing perpetuity method
Bridge enterprise value to equity value and value per share
Apply P/E, EV/EBITDA and P/B and choose peers sensibly when few Ethiopian comparables exist

Built on

Erudite Africa training module: Ethiopian Context, topic 3.a Financial Modeling and Company Valuation, Levels 1 and 2 and the Level 3 outline (October 2026)
Erudite Africa Training Module: Ethiopian Context, programme overview and regulatory register (October 2026)
Income Tax Proclamation No. 979/2016 as amended by Proclamation No. 1395/2025; Value Added Tax Proclamation No. 1341/2024; Financial Reporting Proclamation No. 847/2014 (status to confirm)
NBE directives as listed in the lessons: FXD/01/2024, FXD/04/2026, SBB/95/2025, SBB/78/2021 (reported); NBE Monetary Policy Committee release No. 7 (July 2026)
ECMA public offer directive (reported as No. 1030/2024) and the ESX Rulebook (December 2024)
The FAST modeling standard and IFRS (IAS 16, IAS 29, IFRS 16) as general professional references

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.