Euromoney Learning Solutions

Financial Statement & Business Analysis (Corporate Analysis and Valuation School)

Available dates

Feb 16—17, 2020
2 days
Dubai, United Arab Emirates
GBP 2935 ≈USD 3990
GBP 1467 per day
Jul 6—7, 2020
2 days
London, United Kingdom
GBP 2935 ≈USD 3990
GBP 1467 per day
Oct 26—27, 2020
2 days
London, United Kingdom
GBP 2935 ≈USD 3990
GBP 1467 per day
+3 more options

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About the course

This course comprises three days of training in corporate valuation techniques, followed by an additional, optional two days of training that cover more advanced concepts. The two day foundation training course is designed to provide delegates

This course forms Module 1 (two days) of the Corporate Analysis and Valuation School (5 days)

With an understanding of the following:

  • Financial analysis underlying corporate valuations
  • Valuation fundamentals
  • Multiple valuations
  • DCF valuations
  • Applying different valuation techniques using Excel

The subsequent two day training is designed to cover the following:

  • More advanced DCF techniques
  • The impact of capital structure on valuation
  • The impact of corporate finance transactions on valuation, including LBOs
  • Specific valuations eg. high growth, cyclical and distressed companies

Agenda

Day 1

Introduction to corporate valuations

Valuation fundamentals

  • Drivers of valuation – ROIC, WACC, growth, size
  • The FCF perpetuity valuation formula; single and double period
  • The key value driver valuation formula
  • Economic profit and enterprise value added
  • ROIC vs. WACC – computation and drawbacks

Case studies: valuing companies using the above formulae

Financial analysis for valuation

  • Cleaning up the reported results to derive underlying performance
  • Calculating key financial ratios to assess a firm’s performance relative to its sector
  • Enterprise value versus equity value – what to include in net debt
  • Adjusting for operating leases and other off balance sheet liabilities

Valuations based on multiples

  • Multiple valuations based on revenues, EBIT, EBITDA(R), Net income/EPS, NAV
  • Overview of following ratios: PE, PEG, EV/EBITDA(R), PB, NAV
  • Choosing comparable firms
  • Dividend yield valuations
  • Reconciliation of multiple valuations to the key value driver formula

Day 2

Financial analysis for valuation

Income statement analysis

  • Cleaning up the reported results to derive underlying performance
  • Adjusting for exceptional and non-core items – restructuring, provisions, impairments, discontinued items, MTM of financial assets and liabilities, disposal gains/losses, employee benefits (IAS 19), business combinations (IFRS 3), leases (IAS 17), customer loyalty programmes (IFRIC 13)
  • How failing to calculate the correct underlying earnings figure will materially distort your valuation
  • Revenues and earnings – sources, sustainability, growth outlook, main risk factors
  • The nature of the cost base including sources of volatility (commodity prices, currency, regulation, interest rates, tax rates and other risk factors)
  • The impact of hedging (currency, interest rate, commodity)
  • The impact of joint ventures, associates and NCI
  • Calculating key financial ratios from the income statement; calculating performance ratios

Cashflow analysis

  • Analysing the cashflow profile of the firm
  • What are the main risks to the cashflow?
  • What are the main sources and uses of cash?
  • Are new investments adding value?
  • Are earnings converted into operating cashflow?
  • The impact of net working capital changes and capital spending
  • What is the potential for paying dividends and for share buybacks?
  • Calculating key financial ratios from the cashflow statement

Day 2

Balance sheet analysis

  • The nature of the asset base: PP&E, intangibles, financial assets, joint ventures and investments
  • Understanding the firm’s capital intensity and operating leverage
  • Consolidation policies – is there any value in off balance sheet entities?
  • What to include in gross debt
  • What to include in net debt
  • Valuation adjustments for derivative assets and liabilities, operating leases, contingent liabilities, and other off balance sheet liabilities
  • Valuation adjustments for NWC, deferred taxes, pension deficits, provisions
  • What is the outlook for impairments or revaluations?
  • Is the book value of equity important to the valuation?
  • What is the impact of credit metrics (leverage, interest cover, interest rates, liquidity, covenant breaches) on valuation?
  • Calculating key balance sheet ratios to assess a firm’s financial position relative to its sector

Other topics

  • Overview of major new IFRS accounting standards (IFRS 9, 15, 16)
  • Accounting tricks to enhance profitability and operating cashflow

Overview of a forecasting model for valuation

  • Creation of key value drivers, including macro-economic and company specific
  • Building up the income statement and balance sheet
  • Deriving the cashflow statement
  • Deriving cash available for distributions
  • Dealing with circularity
  • Scenario analysis
  • Return analysis

Trust the experts

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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