Valuation modelling training – 2 day course

This valuation training course is an applied program where participants work in groups to use Excel in DCF modelling and multiple/ comparable company analysis.

Valuation training course day 1 - DCF (discounted cash flow) modelling

• The starting point for DCF valuation
  • Forecasting from financial statements and getting to cash flow
  • Modelling integrated financial statements
  • What makes a good model?
  • Model structure
  • The benefits of integrated financial statements for valuation
  • Key forecast ratios

Modelling – integrating financial statements.  Under the course tutor's guidance, participants work in teams to complete a partially-developed financial model for the case study which integrates P&L, balance sheet and cash flow, and use this to forecast cash flow for a DCF valuation

• Case study: stand alone valuation
  • Absolute valuation
  • Calculating free cash flow before financing
  • Understanding and calculating WACC
  • Conducting a DCF valuation

Modelling – valuation.  Course delegates work as a group to calculate the cost of capital and complete a DCF valuation for a case business

• Discussion – calculating WACC:
  • Sources for beta estimates
  • Obtaining a peer group
  • Obtaining interest rates
• Calculating terminal value
• Defining firm value
  • How should we define firm value?
  • How do we reconcile to “debt free cash free” valuation?

Modelling – firm value.  Course delegates work from enterprise value and use financial statements to calculate equity value

Valuation training course day 2 – multiples/ relative/ comparable company analysis

• Introduction: valuation camps
  • Comparable valuation in context
  • Introduction to and discussion of common valuation techniques
  • Comparison of comparable with absolute (DCF) valuation
  • Pros & cons of comparable valuation

• Choosing comparable companies
  • Manipulating comparable company analysis
  • Issues in choosing comparable companies
  • Stepping through comparable company analysis – the process
  • Sources of info
  • Keys to selecting comparables
  • Comparable analysis: pitfalls

• Selecting multiples
  • Overview of common multiples
  • Which strip out variability? Which are more volatile?

• Normalising earnings and source data
  • Key issues in source data: getting to harmonised and maintainable earnings, making use of data available to the market
  • Cleaning the numbers
  • Key adjustments
  • Discontinued operations
  • One off & exceptional items
  • Tax effects
  • Pensions and other items that look like finance costs
  • The role of judgement & detective work

Case exercise – cleaning the numbers.  Delegates work from a set of accounts and adjust to get to underlying profitability

• Summary: cleaning the numbers – a check list

• Defining firm value and calculating multiples
  • Enterprise vs. shares value
  • Routes to valuation/ applying it in practice
  • Key adjustments e.g. provisions and minority interests
  • Overview of common multiples

Case exercise – equity to enterprise value.  Course delegates work from a set of accounts to reconcile equity and enterprise value, adjusting for debt, cash, provisions and minority interests

• Discussion – valuation multiples – which are more volatile?  Which is best when?
  • Applying it in practice.

Enquire about an in-house valuation training course

Our valuation course feedback is consistently high. If you have 4-5 staff who are interested in a valuation course, in-house training will prove cost-effective for your company. To enquire about an in-house valuation course for a small group of your firm's employees, please use Financial Training Associates' company contact details at the top right.

Book on the valuation course

The valuation training course is next running May 2012. To book on the valuation program please click on the red "book course" button below.

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