Corporate Valuation

Day One

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Introduction to Corporate Valuation

• Objectives of Corporate Valuation
  • Fund raising
  • Mergers and acquisitions
  • Investment analysis
• Overview of Corporate Valuation Techniques

Financial Statement Analysis

• The Financial Reporting System
  • The Balance Sheet
  • The income Statement
  • The Statement of Shareholders Equity
  • The Cash Flow Statement
• Analysis of Assets and Liabilities
  • Analysis of Inventories
  • Analysis of Long-dated Assets
• Case Study
• Exercise

12.00 - 13.00 Lunch

13.00 - 16.30 Financial Statement Analysis (Cont’d)

• Analysis of Cash Flows
  • Reconciling cash flow statement, income statement and balance sheet
• Financial Shenanigans
  • How Management Can Manipulate Earnings and other Financial Information
• Case Study and Exercise

Historical Earnings Valuation

• Recast of Historical Financials
• Debt-Paying Ability
• Capitalization of Earnings/Cash Flows
• Gross Income Multipliers/Capitalization of Gross Income
• Dividend-Paying Ability
• Exercise

Day Two

09.00 - 09.15 Recap

09.15 - 12.00 Asset-Based Valuation

• Book Value and Price/Book Value
• Liquidation Value
• Tobins Q
• Pitfalls in Using Assed-Based Valuation Techniques
• Case Study
• Exercise

Market-Based Valuation

• Comparing P/E Ratios
• The Comparable Sales Method
• Rules of Thumb/industry Averages
• Other Comparables
• Risk-Adjusted Valuation
  • CAPM and other models
• Case Study
• Exercises

12.00 - 13.00 Lunch

13.00 - 16.30 Future Earnings and Cash Flow Valuation

• Discounted Cash Flow Models
  • Introduction to DDM models
  • The zero growth model
  • The constant growth model
  • A two-stage growth model
  • Multi-stage growth models
  • Deriving growth rates from accounting ratios
  • Estimating the discount rate
  • The relationship between risk (beta) and the P/E ratio
  • Sensitivity analysis
  • Case study
  • Exercise

Day Three

09.00 - 09.15 Recap

09.15 - 12.00 Future Earnings and Cash Flow Valuation (Cont’d)

• Introduction to Free Cash Flow Analysis
• The Company’s Value Drivers
  • Sales growth
  • Operating profit margin
  • Taxes
  • Working capital investments
  • Fixed capital investments
• Free Cash Flow to Equity vs. Free Cash Flow to Firm
• Deriving the Free Cash Flows
• Deriving the Discount Rate and the Enterprise Value
• Analysis of Shareholder Value Creation
• Practical Case Study
• Small Exercise

12.00 - 13.00 Lunch

13.00 - 16.30 Future Earnings and Cash Flow Valuation (Cont’d)

• Residual Income Valuation
  • Residual income models vs. DDM models
  • Calculating residual income
  • Economic Value Added, Market Value Added and the measures
  • The EVA™ Model
  • Residual income models: strengths and weaknesses
  • Practical case study
• Small Exercise

Evaluation and Termination of the Seminar