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Data Monetisation and Data Valuation Training Course

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  1. Data Valuation Downloads
  2. Why we need to put a dollar value on data

    Data valuation 101: why you need hard numbers to succeed
    4 Topics
  3. Setting the scene - a Finance 101
    What are some financial metrics your management will care about?
    3 Topics
  4. The four categories of data value
    4 Topics
  5. Establishing a baseline
    The value of intangible assets
  6. Data valuation 102: how much is your data worth today?
    4 Topics
    |
    1 Quiz
  7. Fail-Proof Data Valuation Techniques
    An introduction to data valuation models
  8. Enhance Experience - how data can win you more business
    2 Topics
    |
    1 Quiz
  9. Wheelspin Wipeout - Put a price on waste and rework
    2 Topics
    |
    1 Quiz
  10. Eliminate ambiguity - how to drive productivity across your enterprise
    3 Topics
    |
    1 Quiz
  11. Opportunity knocks - where can we sell or barter our data?
    4 Topics
  12. Data Debt - the high cost of doing nothing
    2 Topics
    |
    1 Quiz
  13. Infonomics - a practical review
    7 Topics
    |
    1 Quiz
  14. How much does it cost to be wrong?
    1 Quiz
  15. Using data valuations
    How do we use these data valuations?
  16. Mapping data valuations to Enterprise value
  17. Running Data Monetisation Workshops
  18. Growing data value through time - Bill Schmarzo's Economic Value of Data
  19. Next steps
    1 Quiz
Lesson Progress
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What is Enterprise Value?

So as we said in that last lesson, enterprise values a more comprehensive metric to look at than just the market capitalisation alone.

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Let’s take a look at enterprise value and what we need to do is work out what our market cap is, which is outstanding shares multiplied by the value per share and then we add on the debt that that business has on its books today. But we take off any of the cash that it might have lying around at the bank to give us a total picture of the acquisition cost of that business.

Who uses Enterprise Value?

Why is this important? Well, boards and other financial investors use this to make decisions on investments and whether or not they should acquire a company. And if we can relate our data work to the enterprise value, how much is that boosting the value of our company by it makes it much easier for those senior people to understand the value of our work.

A real-world example: McDonald’s vs Shake Shack

So let’s make this practical, and we’ll go back to McDonald’s as an example here that we can use to understand it.

At the time of recording, McDonald’s had 247 dollars and ten cents as a value per share. And if we look at one of their competitors, Shake Shack was only worth $78.28 per share.

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That doesn’t tell us a lot about the economic value.

Market Capitalisation

So what else do we need to know? Well, here we can compare them side by side, and you can see here that the market capitalisation..

And Yahoo Finance has done the sums – for McDonald’s is 184.15 Billion, whereas obviously, the smaller Shake Shack is only 3.19 Billion. That gives us more understanding of the value of these businesses than the share price alone.

Enterprise Value

Beneath that, they’ve also calculated enterprise value. And again, you can see how that differs from the market capitalisation because of the fact we have to add on the debt and take away the cash from these businesses. But what you can also see down at the bottom is that there is a relationship between the enterprise value of the businesses and their revenue, and there’s a relationship between the enterprise value and their profitability, or EBITDA.



Linking Enterprise value with the value of data



This image has an empty alt attribute; its file name is mcd-vs-shack-market-cap-1-1024x843.png

We will come back to how we use these metrics later on. All you need to know right now is that they are important and they’re a way that we can look at cost reduction and revenue enhancements and translate that into enterprise value, which is a number that board members and the C-suite should really care about.

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