I did a research project on discounted cash flow (DCF) valuations for college faculty. I evaluated valuation practices of professional equity analysts, with a focus on DCF valuations from equity research analyst reports on Fortune 500 companies & valuations affected by the COVID crisis.
My assumptions of what valuating research analyst reports really entailed changed while completing my STEP Signature Project. Originally, I did not really know what valuations were, but after completing this project, I have a much better idea about what equity researchers do and what research analyst reports look like. It has a lot of theory involved and makes many assumptions to derive its valuations on companies. Additionally while completing this project, I learned how crucial it was to balance my time and manage competing priorities because I had a lot of things on my plate. I also realized the importance of teamwork, collaboration, and peers.
The activities during my STEP Signature Project that led to the transformation I discussed is that I would go through multiple research analyst reports at a time that I started to get more familiar with the key indicators in valuations and where to look to find those indicators in those research reports. I also utilized Microsoft Excel to create databases of these valuation reports and their key indicators to analyze the trends in the various research analyst reports and the trends of Fortune 500 companies. I worked with many key indicators such as WACC, discount rate, beta, risk-free rate, market premium, EBITDA multiples, Revenue multiples, Earnings/Sales, etc. that made what I learned in my Corporate Finance classes come to life with real-world scenarios and examples.
For time management, I struggled with that at the beginning of the project but really prioritizing my time was key. I created a Google Calendar of all the key events, dates, and appointments I had to be mindful of. I also created weekly and monthly goals of all the things I wanted to accomplish so that it helped to keep me accountable. By creating a daily to-do list and schedule at the beginning of every day, it helped to structure my day better and properly allocate my time.
When working on these projects, especially when doing independent work, I would often come across roadblocks or when I was unsure of concepts. Having peers around me who I could go to when I had questions was great because they were also able to teach me new concepts, and I am able to teach them things as well. Having a support system of peers was very important so that I did not feel lost. Thus, I came to realize how important it is to establish and maintain relationships to help each other.
This transformation is valuable for my life because all of these transformations from a better understanding of valuations, time management, and teamwork have helped develop me both personally and professionally. Time management and teamwork will continue to be important throughout the rest of my life as I go into my career, and is relevant and applicable to anytime and anywhere needed. Now that I have a better understanding of valuations and research analyst reports on Fortune 500 companies, I know what this work entails, and it has helped me to figure out better which career path I want to pursue in the future as a Finance major.