Course dates
An intensive, 4-day course with added sessions on financial modelling in Excel.
Topics covered in the course include:
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Valuation mistakes and the financial crisis
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Corporate finance techniques – discounted cashflow and multiples
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Company valuation and mergers & acquisitions
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Project finance structure and risk analysis
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Mathematical risk analysis versus judgmental risk analysis
- Debt pricing, credit spreads and credit analysis
Course Summary
In today's turbulent and constantly changing global economy, financial executives are challenged with managing financial performance. Creating and maintaining shareholder value is no longer an option. Simply being 'profitable' is no longer sufficient.
The successful companies of the future - both in developed and emerging markets - must be skilled in creating and managing shareholder value. Appropriate financing decisions will, more than ever, be crucial in ensuring that corporate strategic and shareholder value objectives are achieved. Increasingly vocal shareholders are already demanding and will continue to demand assurance that appropriate low cost financing and balance sheet risk controls are in place.
Moving from the strategic 'big picture' to 'how to' tools and techniques, this programme will equip you with an expanded range of essential financial management skills, and teach you how these can be used to underpin value-creating corporate and business strategies. The programme is applicable both to developed and emerging market organisations and, through examples and case-studies, covers the full range of industrial, retail, financial, government and service sector organisations.
Who Should Attend?
The course will be of value to professionals in the following areas:
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MBA / Business Graduates wishing to gain a clearer insight into the practical aspects of international finance
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Commercial and International Bankers
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Corporate Treasurers and Financial Controllers
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Corporate Account Handlers
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Strategic Planning Executives
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Corporate Financiers
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Accountants
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Financial and Strategy Consultants
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Privatisation Officers
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Financial Investment Analysts
Teaching Methodology
This intensive programme draws on the knowledge and practical expertise of a series of academics, management consultants, corporate financiers and senior bankers.
The faculty use tried and tested teaching methods based around lectures, practical exercises, syndicate work, computer simulations and case studies which make use of relevant, real life examples. In teaching this course in the past, we have found that some participants are interested in the practical mechanics of Excel. Added sessions will be held after 5pm to provide instruction on many practical Excel topics.
Course Level
This is an intermediate course for people with several years experience in finance who want to reinforce and diversify their knowledge of the underlying frameworks and approaches in different areas of financial management. The course puts participants on a steep learning curve, hence the fundamentals of each subject will be covered very rapidly before moving onto more complex areas. To gain maximum benefit out of the course, participants should be familiar with the principles of discounted cash flow techniques and have some prior training or experience of financial statement analysis, budgeting and project appraisal.
Day 1
Valuation and introduction
The course begins by reviewing lessons on valuation, risk assessment and forecasting that can be derived from the financial crisis. A lecture and discussion reviews mistakes made in valuing sub-prime loans compared to other famous valuation errors. This introduction demonstrates that real valuation errors were not made by wrongly estimating items like Beta, the weighted average cost of capital or wrongly measuring surplus cash.
Instead, mistakes in evaluating value drivers, effects of surplus capacity and lack of independent analysis has driven most valuation problems. Review of valuation lessons at the beginning of the course provides context for other subjects in the course.
The first day of the course introduces key themes and concepts that will be used throughout the five day session. Measuring and managing risk as well as translating risk into valuation for decision making will be emphasised along with strategic and economic drivers of value. Valuation covers mechanical aspects of valuation, the meaning of financial ratios used in valuation, appropriate use of multiples (P/E versus EV/EBITDA), choosing among alternative techniques and assuring that the valuation techniques make sense.
Topics include:
Overview of course and major themes
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Fundamental economic drivers of value
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Tension between judgment and quantitative analysis
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Use of free cash flow in decision making versus debt capacity and equity cash flow
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Importance of models in risk assessment and decision making
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Conflict between enterprise valuation and equity valuation
Financial statement analysis and financial ratios in valuation
After reviewing the economic theory behind value creation, the course moves to use of financial statements in measuring value. Participants will discuss the rational behind valuation ratios and what really drives ratios in different industries. A case study will be used that demonstrates how various ratios are used in valuation of debt and equity.
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Financial statement review
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Financial indicators of value
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Price earnings ratio, return on investment and value creation
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Free cashflow
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Case study
Valuation overview and mechanics
Before delving into the details of valuation models, general categories of valuation models will be introduced and a foundation in valuation mechanics will be established. The discussion will focus on how value is created by a company.
Valuation Overview and Modelling
In this section participants learn the state of the art in valuation theory and practice. The discussion and case studies focus on which valuation method is most appropriate for alternative business circumstances.
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Valuation using multiples
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Valuation using discounted free cashflow
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Rationale for alternative terminal value approaches
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Valuation from earnings growth
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Case study on implementation of valuation
Cost of Capital and Adjusted Present Value
After analysing valuation techniques, application of cost of capital is discussed with emphasis on application of discount rates in real world circumstances. The final topic addresses adjusted present value where all-equity cost of capital is applied.
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Survey of cost of capital techniques
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Cost of capital used in M&A
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Weighted average cost of capital
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Application of CAPM
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Adjusted net present value and arbitrage pricing model
Day 2
Financial Modelling
The second day covers financial modelling for valuation. Topics covered include:
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Modelling overview and major themes
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Efficient corporate financial model structure and objectives
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Avoiding bad practice in creating financial models
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Design and building of a corporate model from A to Z
Corporate model structure
Forecasting models are the centrepiece of most valuation, merger and acquisition and project finance analyses. Therefore, the course begins with by establishing a solid foundation in modelling. Some of the common errors made in valuation from corporate models will also be discussed. The errors do not address mechanical aspects of the model but rather conceptual and logic mistakes from a business perspective. In discussing model structure, the course covers:
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Model objectives
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Review of actual models
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Mistakes in modelling (base case definition, ignoring financial ratios, capital expenditure consistency, growth rates, business cycles)
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Model structure for alternative transactions (corporate models, project finance models, leveraged buyout models and merger and acquisition models)
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Model layout (inputs, working analysis, debt structure, financial statements)
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Financial statement analysis for modelling
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Model complexities (depreciation, taxes, circularity, minority interest, deferred taxes)
Construction of a corporate model
So as to become proficient in interpreting financial statements and financial models and in order to be comfortable in using template models, participants will construct a corporate model from a to z. The model exercise includes a discussion of spreadsheet conventions such as the positive number convention, organisation of spreadsheets, use of range names and construction of “cork screw” accounts.
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Objectives of well designed models
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Model organisation (sheet order, repeating inputs, sheet colours, sheet columns)
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Spreadsheet conventions (positive number, switches, cork-screws, switches)
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Simple formulas (formula length, max and min statements, range names)
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Model documentation (macro names, column titles, units)
- Auditing and error checking
Model construction case study
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Construction of working analysis, debt
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Structure and financial statements
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Calculation of debt and cash plugs
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Use of history in forecast
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Scenario and sensitivity analysis
- Template corporate model
Day 3
Valuation in mergers and acquisitions
The third day of the course addresses valuation in the context of mergers and acquisitions. As mergers can produce significant marketing, cost and strategic synergies but they also can be very costly to shareholders, the most appropriate analytical techniques are discussed.
M&A topics covered in the course include:
Introduction to M&A
The M&A discussion begins by describing M&A terms and reviewing alternative types of Transactions. Since M&A is at its heart a valuation problem with accounting, strategic valuation and tax issues, the valuation discussion from prior analysis provides a foundation. Topics in the introduction to M&A include:
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History of M&A and merger terms
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Studies of mergers and economic efficiency
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Factors that drive successful mergers
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Earnings accretion and dilution vs. premium and synergy
Share exchange, premiums and accretion / dilution
A key question for management in M&A is whether the transaction increases or decreases earnings per share. The earnings analysis is introduced in the context of a share exchange transaction:
Consolidation analysis and case study
Analysis of an M&A transaction involves assessing the financing of the transaction as well as the effects on earnings per share. Modelling an M&A transaction involves incorporating goodwill, asset write-ups, pro-forma balance sheets and other complexities. A significant component of the M&A discussion involves how the accounting and strategic issues are incorporated in a model:
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Analysis with integrated model
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Development of transaction assumptions
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Computation of goodwill and proforma balance sheet
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Integrated model of financial statements
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Case study of M&A structuring and strategic analysis
Leveraged Buy-out model exercise
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Discussion of case / objectives of LBO Analysis
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Construction of cashflow Waterfall and Debt structure
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Pro-forma Balance Sheet Analysis
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Calculation of terminal value and IRR on alternative securities
- Financial ratios in LBO’S
Merger and acquisition structuring model case study
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Discussion of case / objectives of M&A modelling
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Sources and uses of funds
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Goodwill calculation
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Comprehensive pro-forma Balance sheet
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Consolidated financial projections
- Use of template M&A model
Synergy valuation
The final topic addressed in the M&A portion of the course is valuation of revenue, cost and capital expenditure synergies. Emphasis is on real-world synergy measurement and how the ultimate costs and benefits of a merger can be assessed:
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Theory of synergies
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Identifying synergies
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Valuation of synergies
- Case study of synergies
Day 4
Valuation of debt and equity in project finance
In the fourth day of the course addresses valuation in project finance applications. Project finance is a unique financial product with significant financial management implications related to risk analysis, debt sizing, contract valuation and options analysis. Topics included in the project finance part of the course include:
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Structured finance overview and terms
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Debt structuring and debt sizing in project finance and leveraged buyouts
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Contract valuation in project finance
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Probability of loss, loss, given default and yield spread
Project finance overview and terms
The discussion of project finance begins with introductory comments about the costs and benefits of project finance with an emphasis on measuring and valuing risk. A case study is used to introduce a number of subjects
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Overview of project finance terms
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Applications and contracts in project finance
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Project finance case study
Valuation and risk analysis in project finance
Valuation and credit analysis in project finance differs from corporate finance because of the emphasis on cash flow and measuring specific risks. The manner in which valuation and credit analysis is performed by lenders and sponsors of projects is addressed in the second section.
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Overview of project finance models
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Free cash flow and equity cash flow
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Equity and project IRR
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Debt service coverage and LLCR
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Debt sizing case study
Debt structure and waterfalls in project finance debt
Debt structure in project finance can be quite complex and affected by a number of credit enhancements including covenants, debt service reserves, waterfalls and contracts. Credit enhancements are addressed using a case study and a comprehensive project finance model template.
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Credit enhancements in project finance
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Debt service reserves
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Project finance covenants
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Senior and subordinated debt
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Liquidated damages
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Case study of debt valuation
Valuation case study in project finance
After working through project finance issues, participants work through a comprehensive case study to value a project and determine the credit quality of the debt tranches. The case includes establishing economic drivers, revenues and expenses and the financial structure of the project.
Istanbul Hotel, Istanbul, Turkey
This programme takes place on a non-residential basis in a central Istanbul Hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation.
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Ed Bodmer
Edward Bodmer has created innovative forward pricing, productivity measurement and investment valuation software for consulting clients throughout the United States. He has taught energy economics and finance throughout the world, and formulated significant government policy and corporate strategy in the U.S.
Mr. Bodmer's consulting clients include investment banks, commercial banks, research institutions and government agencies on a wide variety of complex valuation and advisory matters. He has constructed a unique framework for electricity price forecasting and valuation using production cost modelling techniques combined with option price theory and Monte Carlo simulation.
Mr. Bodmer is also an adjunct professor at leading University where he teaches courses in microeconomics. Along with his practical experience that covers a multitude of major advisory projects, he has taught specialised courses in financial modelling, electricity pricing, option valuation, mergers and acquisitions and contracting to investment banks, commercial banks, industrial corporations and electric utility companies.
Mr. Bodmer was formerly Vice President at the First National Bank of Chicago where he directed analysis of energy loans and also created financial modelling techniques used in advisory projects. He has used the models in providing expert testimony on subjects ranging from capital structure to investments in multi-billion dollar nuclear plants to complex valuation of new investments.
Mr. Bodmer received an MBA degree specialising in econometrics (with honours) from the University of Chicago and a BS degree in finance from the University of Illinois (with highest university honours). He has written many articles and is in the process of completing a textbook on valuation of electricity assets.
Courses run by this instructor
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.
26-28 Sep 2012 (Paris, France)
Delegates will leave this intensive three-day financial modelling in Excel training course with the ability to effectively apply modelling techniques in a wide range of practical scenarios. Featuring: Design & structure different models and translate them into Excel; Calculate free cash-flow; Use Monte-Carlo simulations; Identify decisions tree - problems & solutions; Develop models incorporating risk, sensitivity, optimisation and forecasting using solver.
28-30 May 2012 (Amsterdam, Netherlands)
15-17 Oct 2012 (Amsterdam, Netherlands)
This 3-day interactive workshop offers a practical study of the techniques of valuing and financing acquisitions.
2-6 Jul 2012 (Geneva, Switzerland)
As a result of the recent banking crisis in the West, the Accord has evolved into what was called Basel II.5 and is now called Basel III. This intensive, 5-day course will discuss, in detail, the significant changes to the Accord, and how they will impact on the business model of your bank.
24-27 Sep 2012 (Paris, France)
This comprehensive, 4-day training course allows delegates to analyse and practice a range of corporate valuation techniques, their appropriate application and their advantages and disadvantages.
18-20 Jun 2012 (Paris, France)
19-21 Nov 2012 (Paris, France)
A 3–day training course dedicated to the valuation, structuring, financing and negotiating of merger and acquisition transactions.
3-6 Dec 2012 (Prague, Czech Republic)
Excellent 4-day course teaching you how to build a successful corporate banking strategy and how to raise the performance of your institution. The course will teach you how to use the planning process to set goals, control costs and to increase the profitability of clients and sales channels.
18-22 Jun 2012 (Paris, France)
3-7 Dec 2012 (Paris, France)
A 5 day intermediate training programme on fixed income securities, fixed income derivatives and fixed income structured products.
24-27 Nov 2012 (Prague, Czech Republic)
Bank Valuation is a comprehensive, 4-day valuation course for banking experts.
18-22 Jun 2012 (Paris, France)
10-14 Dec 2012 (Paris, France)
A 5-day, case-study based workshop exploring more advanced issues in company valuation and financial modelling.
21-24 May 2012 (Paris, France)
19-22 Nov 2012 (Paris, France)
This 4-day training programme deals with the range of corporate governance issues that have so occupied financial circles and stakeholders in the recent past.
24-27 Sep 2012 (Prague, Czech Republic)
A 4 day financial training course, Financial Modelling for Mergers and Acquisitions is an intensive hands-on course in which you receive comprehensive instruction on modelling economic, financial and strategic issues associated with mergers and acquisitions. This course will take place in Prague, Czech Republic.
17-20 Sep 2012 (Prague, Czech Republic)
This 4-day course provides a comprehensive look at the most important recent trends and developments in bank reporting. It will improve your analysis skills, giving you the toolkit for better decision making, helping safeguard your organisation.
4-6 Jun 2012 (Paris, France)
3-5 Dec 2012 (Paris, France)
A 3-day course designed to provide a complete overview of the venture capital industry and its workings. Participants will gain a thorough understanding of the role and operations of a venture capital fund, and the complex financial engineering methods it uses.
24-27 Sep 2012 (Prague, Czech Republic)
A 4 day intensive, practical training programme combining a review of the latest valuation theory with real life case studies and team negotiation role plays. Advanced Private Equity & Valuation Workshop will take place in Moscow, Russia.
9-13 Jul 2012 (Paris, France)
17-21 Dec 2012 (Paris, France)
A 5-day practical programme with case studies and integrated cash flow modelling for analysts, investors, financiers, developers and advisors. This advanced programme is designed as an integrated series of modules which will increase participants’ understanding of today’s complex and sophisticated process of real estate investment and finance.
24-27 Sep 2012 (Istanbul, Turkey)
This 4-day training programme deals with the range of corporate governance issues that have so occupied financial circles and stakeholders in the recent past.
4-6 Sep 2012 (Oslo, Norway)
This 3–day course will provide delegates with all the necessary practical skills to model and value oil and gas companies, from the perspective of an investor, an equity analyst or a participant in a corporate transaction, whether a corporate or an advisor.
9-13 Jul 2012 (Geneva, Switzerland)
An intensive 5-day training course, the Private Banking School is designed to provide you with skills and techniques to implement robust growth strategies. This event features a multitude of case studies and presentations from practitioners guest speakers.
22-24 May 2012 (Vienna, Austria)
A 3-day, high-level negotiation course for senior managers in banking and finance.
18-21 Jun 2012 (Istanbul, Turkey)
This 4-day, interactive course explores the best-practice business strategies and management methods adopted by leading banks and how delegates' banks could upgrade their approaches to these high standards.
15-18 Oct 2012 (Prague, Czech Republic)
This 4-day workshop takes a hands on approach to a comprehensive set of financial modelling and valuation techniques with computer based case studies.
25-27 Jun 2012 (Oslo, Norway)
An intensive, 3-day, computer-based, practical training course with case studies and worked examples.
21-24 May 2012 (Prague, Czech Republic)
A 4-day project and corporate financing course covering modelling and valuation, with added sessions on financial
modelling in Excel
24-26 Sep 2012 (Vienna, Austria)
A 3-day high-level negotiation course for senior managers in banking and finance.
15-17 Oct 2012 (Prague, Czech Republic)
This 3-day course is designed to give delegates a comprehensive overview of the latest techniques and methodologies to successfully manage a corporate banking and SME network.
21-24 May 2012 (Istanbul, Turkey)
The course takes you through all the applications of corporate finance from M&A to IPO's to LBO's. However, a key element is that the course demonstrates how the many different applications draw upon a common core framework based upon the principles of financial economics that is reviewed on the first day.
16-25 Jul 2012 (Prague, Czech Republic)
An in-depth, 8-day financial training course based on case studies and model building.
The course is designed to provide an in-depth overview of the main areas in finance, including recent controversies and regulatory issues.
The course delivers in-depth exposure to all the main corporate finance disciplines including the main company funding areas such as debt and equity issuance, valuation, M&A, leveraged buy-outs and restructuring as well as the associated model-building.
21-25 May 2012 (Baku, Azerbaijan)
This unique 5-day training course examines the latest structuring, funding and cashflow modelling techniques.
25-29 Jun 2012 (Prague, Czech Republic)
The overall aim of this 5-day, top-level school is to explore how leading banks are led and managed strategically, and how the delegates' banks could upgrade their own approaches.
27-29 Aug 2012 (Vienna, Austria)
Upon completing this 3-day workshop, delegates will understand how to build a flexible analysis model to restructure existing debt.
10-13 Sep 2012 (Barcelona, Spain)
Plan, evaluate and monitor all financial aspects of the restructuring process.
24-26 Sep 2012 (Belgrade, Serbia and Montenegro)
This 3 day programme focuses upon how the toolkit of managerial accounting can be linked sequentially and logically with the principles of financial economics. It will provide critical insight into how the tools and techniques of management accounting can be adapted and used to be consistent with achieving value growth.
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Course dates