Advanced Corporate Analysis, Valuation & Financial Modelling

Euromoney Learning Solutions

How long?

  • 3 days
  • in person

Euromoney Learning Solutions


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Who should attend

This new 3 day 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 & Venture
  • Capital Specialists
  • Business Analysts

About the course

A 3-day case study based workshop exploring issues in corporate valuation and financial modelling.

Corporate 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. This highly practical course will lead you quickly from the basics through to the more advanced valuation methodologies and modelling techniques.

Highlights include:

  • Building a comprehensive financial model.
  • Understanding business models.
  • Absolute valuation methods DCF, EVA and CFROI.
  • Developing an appropriate cost of capital.
  • Decomposing sources of return.
  • Using comparative valuation measures.
  • Understanding the basics of real options.
  • Dealing with intangibles.
  • Valuing fast growing companies.

Course Methodology

This hands-on programme is taught using a combined interactive approach which incorporates case studies and exercises to reinforce the concepts covered in each teaching session. Emphasis is placed on delegates gaining practical experience of the various valuation techniques. Case studies from recent deals are included, as are practical exercises involving problem areas in valuation. The programme 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.**


Day 1

Advanced Modelling

Forecasting the income statement

  • Detailed revenue and earnings forecasts
  • Fixed vs variable costs: operating leverage – how to model in Excel
  • Calculating underlying EBITDA(R) and net income - adjusting earnings for exceptionals, non-recurring items, discontinued items, joint venture earnings, operating leases and other items
  • Hedging policies
  • Impact on earnings of new IFRSs – IFRS 9, IFRS 15, IFRS 16

Taxation issues

  • Current tax vs deferred tax
  • Do deferred tax liabilities change the valuation?
  • Estimating the effective tax rate
  • Operating losses: carry-back and carry forward

Non-current Assets

  • Understanding capital intensity
  • Maintenance vs expansionary capex
  • Understanding asset lives
  • Forecasting disposals – cashflow and gains or losses on disposal
  • Impairment of assets – how does this affect valuation?
  • 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


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

Joint ventures, associates and investments

  • Accounting for joint ventures, associates and investments
  • Forecasting joint venture, associates and investment income

Day 2

Advanced modelling and Multiples Based valuation

Equity financing

  • The importance or not of the book value of equity to valuation
  • The impact on valuation of share buy-backs, rights issues, convertible bond and preference share issues
  • Non-controlling interests - impact on equity financing; dividend leakage
  • Forecasting dividends

Debt Financing

  • Linking cash flow and debt requirements
  • Different types of debt financing
  • Equity kickers
  • How do sovereign and corporate credit ratings affect valuation?
  • Advantages and disadvantages of increased debt funding

Assessing liabilities

  • How to define gross debt, financial assets and net debt
  • Dealing with non-available financial assets
  • Dealing with different kinds of provisions and deferred revenues
  • Dealing with pension liabilities
  • Dealing with hybrid financial instruments and derivatives
  • Adjusting for stock based compensation and options
  • Adjusting for off balance sheet liabilities eg contingent liabilities, receivables funding, operating leases
  • Moving between equity value and enterprise value

Advanced ratio analysis

  • Calculating and interpreting ratios for the income statement, balance sheet and cashflow statement
  • Which ratios for which sectors?
  • How to adjust valuations for different ratios

Scenario analysis

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

Equity multiples

  • What do equity ratios tell us?
  • Decomposing and interpreting P/Es: linking growth, cost of equity and RoE
  • Valuations using dividend yield
  • Valuations using net book value

EV multiples

  • When to use EV multiples
  • Calculating EV: core vs non-core
  • Adjustments required for EV multiples

Implied Valuation

  • The importance of qualitative factors (management, corporate governance, innovation, reputation, USPs etc)
  • Valuing a one business company
  • Valuing a conglomerate: sum of the parts valuation; valuing cross-holdings
  • Valuing cyclical and fast growing companies
  • Interpreting results and deriving an implied valuation for the target company

Day 3

DCF and Cost of Capital

Cost of Capital

  • Which cost of capital and whose cost of capital?
  • The elusive equity risk premium
  • Examining beta
  • Calculating the cost of debt
  • WACC in emerging markets
  • Valuing negative cash flows
  • Time Varying Cost of Capital

Forecasting unlevered FCF

  • Estimating normalised unlevered FCF
  • Pitfalls in calculating unlevered FCF
  • Forecasting of FCF for target company

Terminal value

  • TV using the perpetuity method – what terminal growth rate?
  • TV using exit multiples
  • TV using liquidation value
  • Can some firms generate excess returns in the long run?
  • 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

Advanced DCF methods

  • 3 stage DCF
  • Adjusted DCF
  • Compressed DCF
  • Recursive WACC
  • Cash flow return on invested capital (CFROIC)

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 fast growing companies

  • The concept of fades
  • Fading ROCE and growth
  • Choosing an appropriate fade period
  • Impact of fades on DCF valuation
  • Examination of the volatility and drivers of fast growth company valuations

Scenarios and real options

  • Normal distributions and DCF
  • When the world is not normally distributed
  • Real options: myth or reality- the valuation

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
  • Strategy

Valuing the target

  • As a standalone
  • Valuing synergies
  • Estimating the price premium – the value of control and voting rights
  • Do public M&A deals create value for buying and selling shareholders?

Financing the acquisition

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


Sarah Martin

Former Executive Director of CSFB and Lehman Brothers, the Course Director has spent seventeen years working as an investment banker in Europe and the US. She has principally worked in the credit markets and has experience of the US and European high grade and high yield markets, the European new...

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Advanced Corporate Analysis, Valuation & Financial Modelling at Euromoney Learning Solutions

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