Valuation

This session lays the foundations to build a solid understanding of corporate valuation. The most common valuation methodologies are introduced, explaining the difference between trading values and transaction values. The concepts of enterprise value and equity value are explained, using simple but rigorous concepts. Finally, the basics of multiple valuation and discounted cash flow valuation are introduced. Numerical exercises are used throughout the session.

This program focuses on the analysis of returns. First, the importance of returns in relation to value creation is illustrated. The concept of invested capital is then introduced and practical examples are used to show how to calculate the return on invested capital, and what its advantages and disadvantages are. We then show how to incorporate explicit returns assumptions in a DCF model, by using the value driver formula to calculate the terminal value. The relevance of returns in an M&A context is also discussed.

During this session, participants learn how to handle certain items that can generate complexities when valuing a firm. Minority interests, equity method investments (associates/affiliates), leases, pensions and provisions are covered; the related financial statements analysis issues are reviewed and the valuation impact (multiples and discounted cash flow method) is analyzed. Both enterprise value and income statement adjustments are covered for these topics.

How does Basle 2 impact commercial bank valuation? Participants will incorporate key regulatory and accounting issues into bank analysis, moving from how a bank works to calculating maximum dividends payable annually.

Participants learn how insurance companies work, both life and non-life companies, in order to construct financial models of forecasted performance and valuation. Topics include insurance accounting, regulatory impact, modeling loss payout, and determining the “sum of parts” valuation for a diversified company.

Participants review standard valuation methodologies and discuss the impact of returns on company valuation. Participants will review the application of EVA® in the context of management evaluation and company analysis.

Building on the basic WACC calculations, this session will review the added complexity of companies operating in emerging markets. In addition, this program will assess the WACC of companies operating and financed across different jurisdictions.

To understand the theory behind more advanced valuation techniques used in company valuation, participants start with simple models, mainly in Excel. The advanced techniques are then applied to real company situations. The session identifies where the different techniques are most applicable and also where not to use them.

Participants evaluate how much a financial buyer could pay for a business. The session starts by establishing why private equity firms can create value through leveraged buyouts and how the levered valuation fits into the valuation roadmap. Using a simple free cash flow forecast and a back of the envelope calculation participants establish how much a financial buyer could pay for the target company. Participants will then build a one page model focusing on the main drivers of an LBO.

This session focuses on the different approaches of terminal value calculations. Participants will model a 2 stage steady state terminal value and understand how returns fade to WACC over time.