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Introduction to Valuation Course

Aims

The aim of the course is to teach delegates the principle practical techniques used in company valuation for equity analysis and corporate finance valuation. During the two days delegates will use both DCF and comparables to value a business and will be introduced to best practice establishing key variables such as Beta and terminal growth rates. The course will focus on the key issue of achieving consistency and robustness in valuation. To this end delegates will:

  • carry out the key accounting adjustments needed to normalise and calendarise metrics for use in comparable ratios
  • calculate a range of valuation metrics and argue their relevance or any weighting to be used in the final valuation
  • build a DCF valuation model for a corporate and sensitise the valuation to key value drivers
  • infer implied growth rates from multiples and sense check their DCF valuations against the market implied multiples
  • leverage and deleverage Betas to create a sector rather than a stock specific beta
  • look at the practical problems in using precedent transactions
  • build a valuation “football field” for the case study company and review a fairness opinion

Who should attend?

  • Equity analysts
  • Corporate finance trainees
  • Trainee bond and credit analysts
  • Investment professionals
  • Finance directors
  • Corporate treasurers
  • Business owners

Content

  • The formal role of valuation in markets – IPOs, Public M&A, Private M&A and fairness opinions
  • Equity valuation vs. Firm or Enterprise Value (EV), the core valuation metrics – P/E and EV/EBITDA
  • Cleaning up metrics to make multiples comparable, adjusting for JVs and associates
  • Financial metric normalisation – key adjustments for pensions and exceptional items
  • Precedent transactions, control premia and non-controlling stakes
  • Discounted cash flow analysis – calculating Free Cash Flow to the Enterprise
  • Cost of Capital – the Capital Asset Pricing Model, terminal values, Beta
  • Deconstructing terminal values – deriving G from multiples, and EVA analysis
  • LBO valuation