Top of the class: first annual BVR/SPU Valuation Challenge

“The First Annual BVR/SPU Valuation Challenge started because my friend, Adam Manson, BVR’s financial research manager, was curious,” says Prof. Herbert Kierulff (School of Business and Economics, Seattle Pacific University (SPU)). Why do university finance classes pay relatively little attention to the market method, when it is essential to the work of valuation and business professionals? Why don’t business school cases routinely adjust comps for size when compared with the target companies? “My response was that much of the data and many of the tools needed for dealing with these and other valuation issues are not publicly available,” Kierulff says, “and purchasing them on a per-student or institutional basis is expensive.”

Buffet would be proud. To bridge the perceived gap in the curriculum and make the data and tools available, this year the SPU School of Business and Economics and BVR co-sponsored the first annual BVR/SPU Valuation Challenge. After BVR made such tools asPratt’s Stats and the Duff & Phelps Risk Premium Report and Calculator available at no charge, the SPU students (senior undergraduate and graduate finance) formed four teams to appraise a company and compete for the best valuation presentations. In addition,Owen Dahl (Moss Adams) provided a “real world” (redacted) case study for the challenge, and Joel Mass (Synergetic Finance) lent valuable analytical tools.

The competition began in March, with the final presentation and reports due on May 31, when three senior valuation managers from Moss Adams will judge the student teams and decide the winner. So far, the competition has proved to be a “significant success,” Kierulff reports. “Our students are really into this. If you can imagine: they graduate in less than a month, it's spring, and they are working their tails off in finance. How about that?! I'm just delighted.” We think Warren Buffet would be, too.