Valuation of the Customer Equity

Nicklas Rørholt

Student thesis: Master thesis

Abstract

There is a consistent agreement that companies’ values consist of far more than just bottom line figures. Although this perception is widespread, the most extensive are the valuation models that are based on these exact parameters.
The aim of this thesis is to examine, if there is any applicable solution that valuates the companies accurately and whether this method is simple enough to apply in the future.
In relation to do this, an evaluation of the Customer Lifetime Value model will be conducted and compared to the most favorable valuation model i.e. Discounted Cash Flow. Furthermore, to ensure an in depth study of the Customer Lifetime Value, this thesis will focus on three different life stages regarding the growth of the firms. To obtain the most suitable results, an account of the models’ structure, and the parameters that make them applicable, is essential. In addition, an analysis of each parameter, for each company, and a discussion of the given results, will be included, which will lead to an evaluation of the companies. Finally, the conclusion will include a final discussion of the findings.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages96