Whether the objective is to value a company for an investor or for a Merger & Acquisition (M&A) transaction, the program covers all aspects of valuation using real-life case studies and valuation models.
Learning objectives
Understand the drivers of corporate value: cash, growth & risk
Understand components of a company’s enterprise value
Calculate equity value from enterprise value (EV) and vice versa
Calculate a company’s weighted average cost of capital (WACC) and its components
Learn and apply discounted cash flow valuation tools
Learn and utilize multiples-based valuation tools
Perform scenario and sensitivity analysis for valuation outputs
Who should attend
Professionals and graduate students working or aspiring to work in the field of asset management, investment banking, sovereign wealth funds, private equity, corporate finance, portfolio management and equity research.
Agenda
Day 1
Introduction to corporate valuation
Difference between Enterprise value and Equity Value
Understanding and calculating Enterprise Value and its components
MV of Equity – incorporating ESOPs dilution and in calculating NOSH
Balance Sheet Debt and Off Balance Sheet Debt – Leases
Joint ventures and associates
Non-Controlling Interests
Cash & Equivalents
Exercise: Delegates will calculate EV for two comparable large publicly traded company in excel using the data from their annual report
Introducing the case study company
Model design and structure for the case study company
Know the key model outputs and their drivers
Understand the requisite inputs
Developing cell styles for model transparency and review
DCF Valuation
Understanding FCFF and FCFE
Choice of forecast horizon and forecasting key drivers of free cash flows
Understanding the key inputs and calculating WACC
Cost of Equity:
Choice of risk free rate
Beta (raw and adjusted)
Market risk premium
Cost of debt:
yield vs coupon
pretax or after tax
Choice of weights:
target capital weights Vs current
Day 2
Calculating and performing sanity check for the terminal value using:
growth rate method
multiple method
Calculating the enterprise value of the company:
PV of future free cash flows
terminal value
Calculating Equity value form Enterprise Value : EV to equity bridge
Performing sanity checks to the equity value derived from the DCF value
Adding scenario and sensitivity analysis tools to the DCF value
Exercise: Delegates will provided with an existing excel valuation template, wherein they will input the right set of numbers for a publicly traded company and perform the DCF valuation and its sanity check
Multiples based valuation:
Different types of valuation multiples:
P/E
P/B
P/S
EV/EBITDA
EV/Sales
Drivers of valuation multiples – Why some companies trade at premium, others at a discount
Cash, growth and risk analysis
Selecting the right set of multiple to value the subject company – price based or EV based
Selecting the right set of peer groups to value the subject company
Cleaning and normalizing the operating metrics (EPS, EBITDA, etc.) for the comparable universe before calculating the multiples
Using historical (TTM) or forward looking multiples
Calculating cleaned set of multiples for the peer group and using the same to value the subject company
Converting EV to Equity value when using EV based multiples
Using prior transaction multiples
Exercise: The delegates will perform trading multiples based valuation for the subject company from day 1 for which they have already performed the DCF based valuation
Upcoming dates
Currently there are no public classes/sessions scheduled for this course yet. For any in-house or private training, please contact us.
