Advanced Corporate Valuation Analysis & Methodology

3 days 1-3 May 2018, London UK £3,395.00 + VAT* Download brochure Add to basket
3 days 10-12 Oct 2018, London UK £3,395.00 + VAT* Download brochure Add to basket

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This course represents module 2 of Corporate Valuation School: Techniques, Modelling & Valuation.


Company valuation is used for the purposes of investment, M&A or as part of internal measures of financial control. It is extensively applied when companies issue new shares, divest operations or acquire other companies. The rapidly growing private equity industry is also dependent on solid analysis. There are many different approaches to the analysis and valuation of companies and it is paramount to know when and how
to apply what method. It is also essential to understand that company analysis is not an absolute science but also based on interpretation and judgment. This highly practical course will lead you quickly from the basics through to the more advanced valuation methodologies and modelling techniques.


This practical course is taught using formal lectures combined with practical and interactive case studies and exercises to reinforce the concepts covered in each teaching session. Emphasis is placed on you gaining hands­-on experience of the various valuation techniques.


We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

Sarah Martin

Former Executive Director of CSFB and Lehman Brothers, the Course Director has spent seventeen years working as an investment banker in Europe and the US. She has principally worked in the credit markets and has experience of the US and European high grade and high yield markets, the European new issue markets, the Asian convertible bond markets and of corporate restructurings of distressed credits. She specialised in the telecoms sector and was closely involved in the structuring, raising and/or trading of bank and public debt for telecoms companies in many countries, including Europe, South Africa, Asia and Latin America. She also has extensive experience of corporate finance transactions, including mergers, disposals, privatisations, IPOs and capital raisings. Until 2003, she was an Executive Director at Lehman Brothers in Fixed Income Research in London, having also worked for CS First Boston and Kleinwort Benson. She now works on an independent basis advising the legal and private equity professions on credit analysis and company valuation. She has a degree in economics from the London School of Economics and stock exchange qualifications from London and New York.



Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date. If you need help booking accommodation for your visit to our training courses, please contact and one of our partners will help you get the best rate possible.

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Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:

Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.


We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:

Read more about our offering or complete a call back request to speak to a learning specialist.



Day 1

Advanced financial analysis and modelling

Forecasting the income statement

  • Detailed revenue and earnings forecasts
  • Fixed vs variable costs: operating leverage – how to model in Excel
  • Calculating underlying EBITDA(R) and net income - adjusting earnings for exceptionals, non-recurring items, discontinued items, joint venture earnings, operating leases and other items
  • Hedging policies
  • Impact on earnings of new IFRSs – IFRS 9, IFRS 15, IFRS 16

Taxation issues

  • Current tax vs deferred tax
  • Do deferred tax liabilities change the valuation?
  • Estimating the effective tax rate
  • Operating losses: carry-back and carry forward

Non-current assets

  • Understanding capital intensity
  • Maintenance vs expansionary capex
  • Understanding asset lives
  • Forecasting disposals – cashflow and gains or losses on disposal
  • Impairment of assets – how does this affect valuation?
  • Dealing with intangible assets

Net working capital

  • Components of cash and non-cash net working capital
  • Working capital ratios and their interpretation
  • The relationship between working capital and margins


  • The different types of provisions and their accounting treatment
  • Impact of provisions on valuation

Joint ventures, associates, investments

  • Accounting for joint ventures, joint arrangements, associates and investments
  • Forecasting joint venture, associates and investment income and cashflow
  • The impact of joint ventures valuation

Related parties

  • What are related parties?
  • How related parties can distort results, cause accounting scandals and sharp valuation declines

Day 2

Advanced financial analysis and modelling (continued)

Equity financing

  • The importance or not of the book value of equity to valuation
  • The impact on valuation of share buy-backs, rights issues, convertible bond and preference share issues
  • Non-controlling interests - impact on equity financing; dividend leakage
  • Discounts to apply to NCI valuations
  • Forecasting dividends

Debt financing – impact on valuation

  • Different types of debt financing (Bank debt, RCF vs term loans, private placements, public debt, equity linked debt, commodity linked debt, debt maturity profile, project finance, debt structure and subordination)
  • Derivative liabilities and hedging
  • Equity kickers
  • How do sovereign and corporate credit ratings affect valuation?
  • Defining gross debt, financial assets and net debt
  • Dealing with non-available financial assets
  • Dealing with different kinds of provisions and deferred revenues
  • Dealing with pension liabilities
  • Adjusting for stock based compensation and options; calculating dilution
  • Adjusting for off balance sheet liabilities eg contingent liabilities, receivables funding, operating leases, vendor funding, recourse financing, letters of credit, performance guarantees etc
  • Moving between equity value and enterprise value

Advanced ratio analysis

  • Calculating and interpreting ratios for the income statement, balance sheet and cashflow statement
  • The importance of ROIC – is the firm creating value?
  • Impact of vertical integration and accounting treatments on ratios
  • Which ratios for which sectors? Performance linked ratios
  • How to adjust valuations for different ratios
  • Scenario analysis
  • What are scenarios?
  • Developing flexible scenarios with Excel
  • Review of completed model for target company

Key qualitative considerations

  • Examining recent major valuation swings underpinned by qualitative factors
  • Management, corporate governance, M&A failures, innovation, reputation, customer concentration, rapid technological obsolescence, geo-political risks etc
  • How brand value recognition can cause re-valuations

Multiples based valuations

Equity multiples

  • Overview of equity multiples – PE ratios, PEG ratios, dividend yield, NAV
  • Drawbacks and advantages of equity multiples
  • Adjusting for net derivatives, provisions, contingent liabilities
  • What drives equity multiples? Variations across time, sectors and countries

EV multiples

  • Overview of EV multiples – EV/EBITDAR, EV/EBIT, EV/revenues etc
  • Review of adjustments required for EV multiples
  • What drives EV multiples? Variations across time, sectors and countries

Case studies: Valuing firms in different sectors using a range of multiples


Day 3

DCF and cost of capital

Advanced considerations for cost of capital

  • Historic and implied equity risk premium
  • ERPs for firms with international operations
  • Examining beta; calculating betas for private firms
  • Calculating a bottom up beta
  • Calculating the cost of debt and quasi-debt
  • Is it possible to estimate an optimal capital structure?

Forecasting unlevered FCF

  • Estimating normalised unlevered FCF
  • Pitfalls in calculating unlevered FCF
  • Forecasting of unlevered FCF for target company

Terminal value

  • TV using the perpetuity method – what terminal growth rate?
  • TV using exit multiples
  • TV using liquidation value
  • Can some firms generate excess returns in the long run?
  • Should ROCE equal or exceed WACC in the long run?
  • Running sensitivities
  • Review of final DCF model

Understanding returns

  • Understanding ROCE
  • Components of capital employed
  • Decomposing ROCE
  • The ROCE “frontier”: trade-off between higher margins and higher asset turnover
  • The link between ROCE and ROE

Distortions in calculating ROCE

  • The impact of changing asset lives
  • The invisible assets: valuing intangibles
  • Historic capitalisation
  • Estimating the current value of intangibles

Advanced DCF methods and EVA

Advanced DCF methods

  • 3 stage DCF; modelling the fade timeframe
  • Adjusted present value DCF
  • Drawbacks of using time adjusted WACC
  • Compressed DCF
  • Recursive DCF
  • Calculating debt and equity values directly
  • Cash flow return on invested capital (CFROIC)
  • Reversing into the terminal growth rate

EVA as an alternative to DCF

  • Definitions
  • The mathematical equivalence of EVA and DCF
  • Using EVA to better understand value creation
  • The potential pitfalls of EVA
  • Building an EVA model

Valuing fast growth firms

  • Examination of the volatility and drivers of fast growth company valuations
  • Overview of fast growth firm successes and failures
  • Fading ROCE and growth; choosing an appropriate fade period

Valuing EM companies

  • Sovereign risk premia
  • Adjustments to the WACC – CDS spreads and standard deviations
  • Competitive advantages and disadvantages of EM firms
  • Reliability of macro and firm data
  • Currency risk and macro-economic risks

Valuing a conglomerate

  • Sum of the parts valuation; holding company adjustments
  • Valuing cross-holdings
  • How to improve the valuation of a conglomerate

Valuing distressed assets

  • Using DCF, forward multiples and NAV
  • Estimating default risks
  • The impact of refinancings and new equity offerings
  • Forecasting creditor behaviour
  • Distressed assets as options

Illiquidity discounts

  • For private firms
  • For non-controlling stakes

Scenarios and real options

  • Normal distributions and DCF
  • When the world is not normally distributed
  • Real options: how they can impact valuation

Mergers and Acquisitions

Background to M&A valuations

  • Recent M&A trends
  • The main rationale behind M&A activity

Valuing the target

  • On a standalone basis; as a break-up candidate; in combination with the offeror
  • Valuing synergies
  • Operational and financial synergies; cost and capex savings
  • Estimating the price premium – the value of control and voting rights
  • Do public M&A deals create value for buying and selling shareholders?

Financing the acquisition

  • Using shares or cash or other instruments eg contingent value rights
  • EPS accretion and dilution

Course summary and close


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