Corporate Valuation

Monday, March 23

10.00 - 10.15 Welcome and Introduction

10.15 - 12.30 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

12.30 - 13.30 Lunch

13.30 - 17.00 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

Tuesday, March 24

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

Wednesday, March 25

09.00 - 09.15 Recap

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

• Free Cash Flow Analysis
  • The company’s value drivers
  • Deriving the free cash flows
  • Deriving the discount rate and the enterprise value
  • Analysis of shareholder value creation
  • Practical case study
  • Small exercise
• Residual Income Valuation
  • Calculating residual income
  • Economic Value Added, Market Value Added and the measures
  • The EVA™ Model
  • Practical case study
• Small exercise

12.00 - 13.00 Lunch

13.00 - 16.30 Valuation of M&A's and Restructurings

• Sources of Value Gains from Acquisitions
• Control Premiums and Minority Discounts
• Valuation as a Tool to Discover Restructuring Opportunities
• Valuing Leveraged Buy-Outs
  • Debt capacity analysis
  • The “cash sweep”
• Valuation for Divestures
  • The break-up valuation method
• Strategic Valuation
  • The option-based valuation method
  • Approaches to option-based valuation
  • Caveats and limitations

Evaluation and Termination of the Seminar