The company that I decided to do my project on was Disney. I think that a cash
flow-based valuation approach would work best for this company because this
method will help to estimate the value of a company based on the future cash
flows. This is essentially coming up with what the company is worth in terms of
people investing based on the future sales. For Disney and a lot of the world
experienced was a decline in sales due to the pandemic. This method is a great
tool to use for this type of company because now that the world is going back
towards being more normal, we can look into the future cash flows for this
company to better get an idea of what the company is worth today. The best
valuation method that can be applied is the discounted cash flow. This method
helps to estimate the growth of the company. This method considers variables
that may or may not stay the same, like growth rates, margins, and debt
payoffs. Since the world has opened back up again after the pandemic, Disney
has had a slight decline in profits, and with how the world is currently, this
might also affect their earnings. This makes the discounted cash flow method
the best to use due to the uncertainty of the future.
