Valuation Techniques (with Valuation Modelling) (ICAS)

Overview

This course aims to provide you with an understanding of the practical uses of different valuation methodologies, together with hands-on experience in applying them in practice. A particular focus is on the professional and credible presentation of your work in real-life scenarios.

No prior knowledge of valuation techniques is assumed. However the course content, reflecting the nature of the subject, is technical and you will require a familiarity with financial statements. We will conduct a knowledge check before the course begins and delegates without the requisite background will be asked to reschedule to allow them to cover the relevant material. In all cases, you should be numerate and feel comfortable with the basics of compound interest, which we will review.

Throughout we make use of example exercises in Microsoft Excel, with an incline of difficulty over the 2 days as the exercises become more unstructured to reflect the kind of data gaps seen in real life. The course has been designed for group work to allow delegates again to imitate the kind of real-life valuation scenarios they might come across in professional life. This is not a course in financial modelling using Excel (which is covered in: Introduction to Excel; and Financial Modelling - Comprehensive; however, it makes use of Excel as a tool to build confidence in this area.

Who is this for?

This course will be of benefit to anyone who needs to understand and apply valuation techniques, including equity analysts and fund managers, corporate finance professionals, accountants and business development/ M&A executives. Courses are limited to a maximum of twelve delegates, allowing each attendee to experience outstanding tutor support throughout the two days.

What will you learn?

• What is meant by the ‘value’ of a company?
  • Basic principles of value
  • Company valuation and deriving share price
  • Enterprise and equity values

• Discounted cash flow (DCF)
  • Introduction to DCF mathematics
  • Deriving pro forma free cash flow to enterprise (FCF)
  • Treatment of taxation, interest and inflation
  • Terminal value calculations
  • Company values and share prices
  • Discount rates
    • The cost of equity or ke
      • The capital asset pricing model (CAPM)
    • The cost of debt or kd
    • Weighted average cost of capital (WACC)
      • Identifying an appropriate discount rate
      • Multiples
  • Sensitivity analysis using Excel Data Table function

• Comparables analysis
  • Using multiples as valuation tools
  • Common adjustments made to multiples
  • Sources of multiples – CompAcs and CompCos
  • Price/earnings ratios, EV/ EBIT and EV/ EBITDA multiples
  • Use of other multiples such as sales multiples, price-to-book etc.

Please read the following guidance carefully, which applies if you are attending this course online live:

• In addition to the Online Classroom, you will need to have your own version of Excel open to complete the exercises
• It is difficult (but not impossible) to do this with only 1 screen as you will need to be regularly switching between open windows. We recommend to either:
  • Extend from a computer to a 2nd screen, or
  • Use 2 computers, or
  • Use a tablet for the online classroom and a computer for the Excel
• You are strongly recommended to perform the exercises on a PC rather than a MAC. Using a MAC is possible but the trainer will be unable to help you with the required shortcuts.