**Before registering on this course please email us directly to complete a pre course questionnaire. This is to ensure that the course fits your exact requirements**

Company valuation is used for the purposes of investment, M&A or as part of internal measures of financial control. It is extensively applied when companies issue new shares, divest operations or acquire other companies. The rapidly growing private equity industry is also dependent on solid analysis. There are many different approaches to the analysis and valuation of companies and it is paramount to know when and how to apply what method. It is also essential to understand that company analysis is not an absolute science but also based on interpretation and judgment. This highly practical course will lead you quickly from the basics through to the more advanced valuation methodologies and modelling techniques. methodology

This practical Euromoney Training course is taught using formal lectures combined with practical and interactive case studies and exercises to reinforce the concepts covered in each teaching session. Emphasis is placed on you gaining hands-on experience of the various valuation techniques.

How will this course assist you?

This 5-day case study based workshop exploring advanced issues in company valuation and financial modelling will feature:

• Building a comprehensive financial model.
• Complexities in using comparative valuation measures.
• Absolute valuation methodologies: DCF,EVA.
• Developing an appropriate cost of capital.
• Decomposing sources of return.
• Building a fade model.
• Capitalising Intangibles.
• Introduction to real options.
• Merger and acquisition issues.
• Understanding LBOs.
• Valuing distressed assets.

Who should attend?

This course is aimed at those with a solid financial background who wish to explore the more advanced aspects of financial modelling and valuation methodologies including:

• Equity Analysts
• Investment Bankers
• M&A Professionals
• Fund Managers
• Treasurers and Finance Directors
• Commercial Bankers
• Private Equity & Venture
• Capital Specialists
• Business Analysts

Supported by:

 

Day 1:

Advanced Modelling

Overview 

• Why create a model.
• Review of good modelling practices.

The main structure 

• Historic P&L information.
• Restating historic information.
• Non-recurring items.
• Historic B/S information.
• Non-core assets.
• Review of initial model for target company.

Forecasting the income statement 

• Detailed revenue forecasts.
• Fixed vs variable costs: operating leverage.
• Hedging policies.

Taxation issues  

• Current vs deferred tax.
• Estimating the effective tax rate.
• Operating losses: carry-back and carry forward.

Fixed Assets 

• Understanding capital intensity.
• Maintenance vs expansion Capex.
• Understanding asset lives.
• Forecasting disposals.
• Impairment of assets.
• Dealing with intangible assets.

Working Capital  

• Components of cash and non-cash working capital.
• Working capital ratios and their interpretation.
• The relationship between working capital and margins.

 Provisions  

• The different types of provisions and their accounting.
• Impact of provisions on valuation.

Associates and investments  

• Accounting for associates and investments.
• Forecasting associates and investment income.

Equity financing  

• Minority interest- impact on equity financing.
• Common shareholders- forecasting dividends and retained earnings.
• Share buy-backs and rights issues.

Debt Financing 

• Linking cash flow and debt requirements.
• Different types of debt financing.

Scenario analysis  

• What are scenarios?
• Developing flexible scenarios with excel.
• Review of completed model for target company.

Day 2

Multiples Based valuation and Cost of Capital

Advanced ratio analysis  

• Equity vs Enterprise value multiples.
• Definitions.
• Calculating EV: core vs non-core.

Assessing liabilities 

• Dealing with different kinds of provisions.
• Dealing with pension liabilities.
• Hybrid financial instruments.
• Options.
• Off balance sheet liabilities.

 Equity multiples 

• What do equity ratios tell us?
• Decomposing P/Es: linking growth, Cost of equity and RoE.
• Free cash flow yield.

 EV multiples  

•  What do EV multiples tell us?
• Choosing the most relevant multiples.
• Theoretical EV ratios.

 Interpreting ratios  

• Which ratios for which companies?
• Different ratios different answers?

 Implied Valuation  

• Valuing a one business company.
• Valuing a conglomerate: sum of the parts valuation.
• Valuing cyclical and fast growing companies.

• Interpreting results and deriving an implied valuation for the target company.

Cost of Capital  

• What the theory says.
• The elusive equity risk premium.
• Is Beta a reliable measure of risk?
• Which cost of capital?
• Whose cost of capital?
• WACC in emerging markets.
• Valuing negative cash flows.
• Time Varying Cost of Capital.

DAY 3:

DCF

 Forecasting FCF

• Pitfalls in FCF calculation.
• Estimating normalised FCF.

• Forecasting of FCF for target company.

 Terminal value

• TV using the perpetuity method: volatility.
• Uses and misuses of the exit multiples’ approach.
• Liquidation value.
• Why the value drivers method gives more stable and meaningful results.
• Running sensitivities.
• Review of final dcf model.

Understanding returns  

• Understanding ROCE.
• Components of Capital Employed.
• Decomposing ROCE.
• The ROCE “frontier”: trade-off between higher margins and higher asset turnover.
• The link between ROCE and ROE.

 Distortions in calculating ROCE

• The impact of changing asset lives.
• The invisible assets: valuing intangibles.
• Historic capitalisation.
• Estimating the current value of intangibles.

Day 4: 

Absolute valuations: Advanced issues

 EVA as an alternative to DCF

• Definition.
• Why use DCF and not DCF.

The mathematical equivalence of EVA and DCF 

• Using EVA to better understand value creation.
• The potential pitfall of EVA.
• Building an EVA model.

 Valuing the tax shield: APV  

• What is Adjusted Present value.
• Why value the tax shield separately.
• Appropriate discount rates.

CFROI  

• What is Cash Flow Return on Investment?
• Why use IRR to measure return.
• IRR compared to accounting ROCE.
• Using IRR to value a project.

 Valuing fast growing companies  

• The concept of fades.
• Fading ROCE and growth.
• Choosing an appropriate fade period.
• Impact of fades on DCF valuation.

Day 5:

Alternative methods and M&A issues

 Scenarios and real options

• Normal distributions and DCF.
• When the world is not normally distributed.
• Valuing companies using binomial distribution.
• Real options: myth or reality- the valuation.
• Building a binomial model for a biotech company.

 Valuing Distressed assets  

• Why DCF is not appropriate.
• Estimating default risks.
• Distressed assets as options.

 Mergers and Acquisitions

• The drivers of M&A.
• Horizontal and vertical integration
• Price.
• Strategy.

  Valuing the target

•  As a standalone.
• Valuing synergies.
• Estimating the price premium.

  Financing the acquisition   

• Using shares or cash.
• EPS accretion and dilution: does it reflect value added?

  Modelling acquisitions   

• Accounting issues.
• New developments.
• Calculating Goodwill.
• Proforma balance sheet.
• Merging income statements.
  

Course summary and close
  

• Sophie Blanpain-Forder

  Sophie Blanpain-Forder was the Global Head of Equity Research at Morley Fund Management, the third largest UK asset manager and one of the largest property fund managers in Europe. Prior to that she worked as Senior Analyst for the European Investment product division at Citibank N.A. where her main responsibilities included the design of new investment products and asset allocation. She also worked for Credit Lyonnais Securities, Credit Suisse First Boston and Lehman Brothers. Sophie graduated in 1990 from Institut d’Etudes Politiques de Paris with highest honours. She studied Economics and Finance specialising on Financial Tax Systems, Accounting and Financial Mathematics. She is also a retained speaker for the CFA institute.

  Courses run by this instructor

  • Company Analysis: Valuation, Forecasting and Modelling

Advanced Company Analysis Valuation and Financial Modelling

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

Company Analysis: Valuation, Forecasting and Modelling

12-16 Mar 2012 (London, UK)
2-6 Jul 2012 (London, UK)
3-7 Dec 2012 (London, UK)

This 5-day course will provide you with a wide range of fundamental analytical and forecasting skills, which will be of relevance in today's business, banking and financial services world.

London School of Corporate Finance

23-27 Apr 2012 (London, UK)
1-5 Oct 2012 (London, UK)

A 5 day practical "how to" financial training course taught by an internationally renowned corporate finance expert. The course takes you through all the forms of Corporate Finance from M&A to IPO's to LBO's. Strategy, structuring and valuation are key themes throughout, and upon return to your organisation you will be fully prepared to put your learning into practice.

Private Equity

25-27 Jun 2012 (London, UK)

This 3-day financial training course is about analysing, valuing and financing private equity deals

Financial Modelling in Excel

21-23 Mar 2012 (London, UK)
16-18 Jul 2012 (London, UK)
12-14 Nov 2012 (London, UK)

This 3-day course looks at constructing financial models and analysing their applications and uses

Mergers and Acquisitions

21-24 Aug 2012 (London, UK)

A 4-day training programme looking at structuring and financing M&A deals

Mergers & Acquistions Modelling

22-25 May 2012 (London, UK)

This 4-day comprehensive modelling course is designed to teach delegates the best practices of developing and using M&A financial models as well as analysing, pricing and structuring LBO transactions.

IPOs: Managing, Underwriting and Pricing

3-6 Jul 2012 (London, UK)

A 4-day intensive programme about arranging, managing and pricing successful IPO's

Oil & Gas Valuation

14-17 Feb 2012 (London, UK)

This 4-day course provides the necessary practical skills to model and value oil and gas companies, from the perspective of an investor, an equity analyst or as part of a corporate transaction.

 

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