Football Fields and Presenting a Valuation Range

Chapter 10 walked through DCF, LBO, M&A model, and comps as four separate methodologies. In a real engagement, an analyst doesn't present four disconnected numbers — they synthesize them into a single, standard chart. This deep dive covers that synthesis.

The football field chart

A football field (named for its shape) is a horizontal bar chart where each row represents one valuation methodology, and the bar spans that methodology's implied value range — low to high — for the company's share price or enterprise value. Stack a DCF range, a trading comps range, a precedent transactions range (comps based on actual past M&A deals for similar companies, rather than public trading multiples), and sometimes a 52-week trading range, one above the other, and a clear visual pattern emerges: where the ranges overlap (a real convergence across independent methods, a much stronger signal than any single method alone), and where they diverge (worth understanding why before presenting the chart, not just noting that they disagree).

Why a range, never a single point

Chapter 10 already flagged that "a DCF is only as good as its assumptions." A football field makes that humility structural rather than just a verbal caveat — every methodology produces a range (from a low-case to a high-case set of assumptions), not one falsely precise number, and the final chart is honest about the real width of reasonable disagreement across methods and assumptions.

Sensitivity tables — showing how the range was actually built

A sensitivity table (also called a data table) shows how a DCF's implied value changes across a grid of two varying assumptions at once — most commonly WACC across one axis and terminal growth rate across the other. Reading one is a genuinely useful skill: the diagonal pattern shows how much the output value swings for a given change in input assumptions, which is exactly the information an investor needs to judge how much confidence to place in a single headline number. A DCF whose implied value swings 40% across a reasonable WACC range is telling you something different than one that only moves 10% — and only a sensitivity table makes that visible.

Weighting the methodologies — a judgment call, not a formula

There's no universal formula for how much weight to give each methodology in reaching a final view — it's a genuine analytical judgment, informed by context: a DCF might be weighted more heavily for a stable, predictable-cash-flow business where long-term assumptions are more trustworthy; trading comps might dominate for a business in a well-covered, liquid sector with genuinely comparable peers; precedent transactions matter most specifically in an actual M&A context, since they reflect real prices real buyers have actually paid (including any control premium, Chapter 11's takeover-premium concept), which a pure trading comps set doesn't capture at all.

The actual skill this teaches

Anyone can run a DCF formula. Being able to look at a football field showing a DCF range of $40-55, comps at $35-45, and precedent transactions at $50-65, and give a coherent, reasoned view on where the real business is likely worth within that overall spread — and why — is the actual synthesis skill valuation work is ultimately for. The individual methodologies from Chapter 10 are inputs to this judgment, not the final answer on their own.