Course dates
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, hands on programme 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 delegates gaining practical, hands-on experience of the various valuation techniques. Case studies from recent deals are included, as are practical exercises involving problem area in valuation.
The seminar also includes critiques of the conventional techniques and considers suitable alternatives to be deployed in differing circumstances as well as an update on the latest valuation reporting guidelines and their interpretation.
Course objectives
The course is aimed at participants with solid accounting knowledge who wish to explore the more advanced aspects of financial modelling and explore alternative valuation methodologies.
The format will be interactive throughout and participants will create their own excel-based valuation models, which will be used to value a real life company.
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:
- Investment bankers
- Equity analysts
- M&A professionals
- Fund managers
- Treasurers and finance directors
- Commercial bankers
- Private equity and venture capital specialists
- Business analysts
Day 1
Advanced modelling
Overview
The main structure
Review of initial model for target company
Forecasting the income statement
Taxation issues
Fixed assets
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Understanding capital intensity
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Maintenance vs. expansion Capex
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Understanding asset lives
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Forecasting disposals
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Impairment of assets
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Dealing with intangible assets
Working capital
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Components of cash and non-cash working capital
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Working capital ratios and their interpretation
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The relationship between working capital and margins
Provisions
Associates and investments
Equity financing
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Minority interest- impact on equity financing
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Common shareholders- forecasting dividends and retained earnings
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Share buy-backs and rights issues
Debt financing
Scenario analysis
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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
Assessing liabilities
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Dealing with different kinds of provisions
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Dealing with pension liabilities
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Hybrid financial instruments
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Options
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Off balance sheet liabilities
Equity multiples
EV multiples
Interpreting ratios
Implied valuation
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Valuing a one business company
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Valuing a conglomerate: sum of the parts valuation
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Valuing cyclical and fast growing companies
Interpreting results and deriving an implied valuation for the target company
Cost of capital
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What the theory says
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The elusive equity risk premium
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Is Beta a reliable measure of risk?
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Which cost of capital?
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Whose cost of capital?
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WACC in emerging markets
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Valuing negative cash flows
- Time Varying Cost of Capital
Day 3
DCF
Forecasting FCF
Forecasting FCF for target company
Terminal value
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TV using the perpetuity method: volatility
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Uses and misuses of the exit multiples’ approach
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Liquidation value
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Why the value drivers method gives more stable and meaningful results
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Running sensitivities
Review of FCF model for target company
Understanding returns
The link between ROCE and ROE
Distortions in calculating ROCE
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The impact of changing asset lives
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The invisible assets: valuing intangibles
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Historic capitalisation
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Estimating the current value of intangibles
Day 4
Absolute valuations: Advanced issues
EVA as an alternative to DCF
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Definition
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Why use DCF and not DCF
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The mathematical equivalence of EVA and DCF
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Using EVA to better understand value creation
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The potential pitfall of EVA
Building an EVA model
Valuing the tax shield: APV
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What is adjusted present value
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Why value the tax shield separately
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Appropriate discount rates
CFROI
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What is cash flow return on investment?
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Why use IRR to measure return
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IRR compared to accounting ROCE
- Using IRR to value a project
Valuing fast growing companies
Day 5
Alternative methods and M&A issues
Scenarios and real options
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Normal distributions and DCF
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When the world is not normally distributed
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Valuing companies using binomial distribution
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Real options: myth or reality- the valuation
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Building a binomial model for a biotech company
Valuing distressed assets
Mergers and Acquisitions
The drivers of M&A
Valuing the target
Financing the acquisition
Modelling acquisitions
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Accounting issues
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New developments
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Calculating goodwill
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Proforma balance sheet
- Merging income statements
Centrally located hotel in Paris, Paris, France
This programme takes place on a non-residential basis at a hotel in central Paris. 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, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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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.
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.
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