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Course Overview:
Program Aim
Starting with basic modeling functions, the course will progress through complex modeling skills, including lookups, indexing and valuation approaches. In addition to discussing the mechanics of how to build a model it will also cover techniques and calculations specific to corporate finance. Throughout the course we focus on various methods to valuing assets. Best practices of both design and implementation are covered.
Prior to attending, Participants should have a solid knowledge of financial statements, the basics of corporate finance, such as TVM, cash flows, and discounting, as well as ExcelTM.
Learning Objectives
Students will be able to:
- Develop hands-on, pro forma modeling skills using Excel
- Calculate the cost of capital and determine WACC
- Create DCF models and determine NPV at varying levels of cost of capital
- Valuation for M&A transactions with sensitivity analysis
Course Contents
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Session I
Introduction
- Overview of class, objective and subject outline
- Discussion of practical applications
Some useful Excel tips for modeling
- Modeling best practices
- Tips & tricks that will help you speed up your modeling
- Creating your own formats, custom lists, etc.
Practical and Hands-On
- Linking sheets
- Drilling down
- Logical tests (“IF” statements)
- Build an amortization schedule
- Summing & counting functions
- IS functions
- Errors & warnings
- Control sheets, naming cells & arrays
- Vlookups, Hlookups, Choose functions
Session II
Pro-Forma Modeling
Case Study Exercises – Analyze Financial Model
- Estimating sales growth, aggregating domestic and international sales
- Financial ratio analysis
- Complete a DCF valuation model.
Compare your results to the most recent traded price of select company.
Session III
Cost of Capital and CAPM
- Exercise 1 Return on equity
- Calculate the beta of a selected company
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Session IV
Accrual Accounting Valuation
- Exercise 1 Accrual accounting valuation of a selected company #1
- Exercise 2 Seven steps using CAPM to determine the cost of capital
- Exercise 3 Implied risk premium in the current P/E multiple
- Exercise 4 Four steps using the P/E multiple to determine the cost of capital
- Exercise 5 Accrual accounting for selected company #2
- Valuation Using Multiples
Session V
Discussion
- Control premiums and minority discounts
- Acquisition transactions
- Adjustments for non-operating assets and
- non-recurring items
Special Valuation Issues
- Valuing high growth stocks
- PEG ratio and PSG ratio
- Determine implied profit margins
- Three-stage valuation model
- Valuation of internet stock
Session VI
Warrants and Executive Stock Options
Warrant pricing model
Warrants issues
- Exercise 1 Warrant valuation
- Exercise 2 Value a selected company's outstanding warrants
- Exercise 3 Debt rating analysis
- Bond valuation
- Exercise 4 Expected debt return
- Exercise 5 Expected cash flow and return on debt
Presentation of selected company’s Valuation, and Conclusion
- DCF assumptions and valuation
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