Who should attend the course?
- New hires who have joined the firm late and missed the in-house program
- Individuals looking to fill a knowledge gap
- Experienced bankers looking to refresh their technical skills
- Teams employed in financial strategy roles from non-banking corporations
- Graduates preparing to interview for a role in the finance sector
- Students at business school and looking for a career in finance
The session lays the foundations to build a solid understanding of corporate valuation in the context of investment banking. The most common valuation methodologies are introduced, explaining the difference between a company's fundamental value and how much an acquirer would pay for the business. The concepts of enterprise value and equity value are explained, using simple but rigorous exercises. Finally, the basics of multiple valuation and discounted cash flow valuation are introduced. Exercises are used throughout the session.
- The importance of valuation in the investment banking industry
- Fundamental vs. transaction value
- Overview of the major valuation methods
- Trading comparables analysis
- Discounted cash flow analysis
- Transaction comparables analysis
- LBO analysis
- Enterprise vs. equity value
- Book values vs. market values
- Derivation of enterprise values using market values
- Derivation of enterprise values using a fundamental valuation approach
Participants are introduced to preparing multiples using real company data and a case study including a range of international companies. We focus on how to select comparables, where to find data in published financials and equity research reports, how to clean the raw data, and how to document and check the output. The most commonly used multiples are explained and complexities such as normalizing for non-recurring expenses / income are also covered. The session ends with practical exercises on the application of multiple analysis to value a company.
- Screening companies to identify a suitable comparable set
- Calculating the company’s value
- Number of shares and value of share options
- Equity value
- Net debt calculations
- Minority interests and equity method investments
- Enterprise value
- Calculating the earnings numbers
- Cleaning non-recurring items from earnings and resulting tax adjustment
- Calendarization issues
- Last twelve months analysis
- Calculating a range of forward looking and historical earnings multiples
- Industry specific multiples
- Calculating and using operating and credit ratios
- Troubleshooting and checking the output
- Applying the results
Participants learn how to build a discounted cash flow valuation model. The session starts with an overview of the valuation methodology, and the steps required in setting up a valuation model. We then focus on the calculation of free cash flow. A detailed ratio analysis is used to establish the reasonableness of the forecasts and to identify when the target company reaches steady state.
We analyze the weighted average cost of capital, calculate terminal values, using both the exit multiple method and the perpetuity growth method. We discount the free cash flows to arrive at enterprise values and calculate the implied share price. Once the valuation is complete participants perform several checks on the analysis using key ratios, and sensitivity and scenario analysis.
- Calculating unlevered free cash flows
- Drivers of cash flow
- Ratio analysis
- Weighted average cost of capital
- Optimal capital structure using peer analysis
- Establishing the company’s forward looking cost of debt
- Cost of equity: understanding the risk free rate, the equity risk premium and beta
- Unlevering and re-levering the beta
- Calculating WACC for the case company
- Calculating the terminal value
- Perpetuity growth (Gordon Growth model) method
- Exit multiple method
- Building a discounting model
- Mid-year adjustments
- Calculating enterprise and equity values
- Sanity checks
- Reinvestment rate and ROIC
- Implied multiples and growth rates
- Percentage of value in the terminal period
""The virtual classroom was engaging and it felt like a classroom training"" ~ HR, International Investment Bank
View video to get a flavour of the course
What is a Virtual Classroom?
Virtual Classroom training is a new and highly engaging way of delivering programs remotely with enhanced levels of interactivity compared to conventional webinars. In AMT’s Virtual Classroom participants are encouraged to activate their own webcams and mics throughout the class allowing for real-time engagement, both verbal and non-verbal, with fellow participants and their trainer. Participants can also share their screens to get instant assistance in any technical exercise; just like asking the trainer to walk over and help in the classroom! We have seen a step-change in participant engagement with this new technology. The trainer’s ability to see a selection of their participants’ faces in real-time, and to react to their verbal and non-verbal cues creates a remarkably realistic classroom-like experience. For an example of the technical requirements of for our Virtual Classrooms click here.
A working knowledge of the Financial Statements and Financial Modeling is desirable
This course is non-residential. The venue will provide light refreshments. AMT reserve the right to cancel or postpone sessions or change content if registrations are insufficient to continue 2 weeks prior to scheduled commencement date. Registrants will be given at least 5 business days’ notice of such changes.