The Fundamentals of Accounting & Valuation

5 days 21-25 Aug 2017, London UK £4,995.00 + VAT* Download brochure Add to basket

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Overview

This programme of courses is made up of 2 individually bookable parts, book the whole academy and save £1,995:

This course represents the first part of the Corporate Finance Academy (link to full course) which made up of 2 individually bookable parts. Choose to attend the module most relevant to you or book the whole academy and save £1,995.

Part 1 of the Corporate Finance Academy, the Fundamentals of Accounting and Valuation, delivers in-depth exposure to all the main corporate valuation techniques including special case companies after introductory sessions on all the key accounting topics necessary for valuation analysis and performance appraisal

The course is built around actual case studies illustrating current practices including:

  • Burlington Resources
  • Orange Telecom
  • Air Arabia
  • AZ  Electronics
  • Woodside Petroleum
  • Felix White
  • Aer Lingus
  • Tommy Hilfiger
  • Phelps Dodge M&A valuation
  • SAB Miller

The case study work will include excel modelling

 

Course objectives
The course delivers in-depth exposure to all the main corporate valuation techniques including special case companies after introductory sessions on all the key accounting topics necessary for valuation analysis and performance appraisal.

 

Teaching techniques

  • The course is delivered by means of a combination of short lecture sessions followed by practical case studies some of which involve using excel models
  • The sessions are highly interactive and questions and attendee participation is encouraged
  • Case study work involves accounting, valuation and modelling

The concepts taught, the exercises and the case studies are designed to be of practical benefit to attendees and are immediately usable in the workplace

Instructors

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.

London
Paul Richards

The Course Director has taught Masters students at leading business schools in the UK (Cranfield and Cass Business Schools) for more than 15 years. He has also trained successfully for Euromoney for 5 years in more than 100 courses many of which have been customized courses delivered in-house for major banking institutions (eg Barclays, HSBC and other international banking institutions).

He has more than 20 years investment banking experience specialising in domestic and international corporate finance at UBS (Warburg), HSBC and Map Securities (part of Skandia Insurance and Mapfre, Spain). He was also the chief executive of the London merchant banking operation of Credit Industriel et Commercial, a major French banking group.

As a result of this experience, he has extensive first hand experience of: mergers and acquisitions; IPOs; bond issues; secondary market issues; privatisation; debt syndications; corporate treasury; equity valuation; investment analysis; security and derivative valuation; private equity; modelling; corporate governance; and compliance. His consulting and training clients have included a wide range of organisations such as Bowring, Industrial Development Company and Association of Corporate Treasurers and he has also been involved in expert witness work.

Currently, he is CFO at Affinity Real Estate Private Equity and he also undertakes training assignments for Euromoney. He is a non-executive director of Energy Invest Group, a resource financing company.

He won the 2004 Wincott Foundation Prize for his article "Lessons in shareholder value" on the boom and bust in new economy stocks, published in Professional Investor (the journal of the UK Society of Investment Professionals - the UK member society of the CFA Institute).

He has been a member of the FTSE Indices Committee, a member of the Accounting Standards Board working party on Operating and Financial Review and has 12 years’ experience as a non-executive director of a listed UK company.

He is a graduate of Cambridge University and London Business School. He is also a CFA charter holder, an Associate of the Chartered Institute of Bankers, a Member of the Association of Corporate Treasurers and a Fellow of UKSIP.

Venue

London

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.

Related Courses

Inhouse


 

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.

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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.

 

Agenda

The Fundamentals of Accounting and Valuation 

Day 1: 21st August 2017

Major Accounting Statements


Session 1: Excel tools and commands 

  • Using Excel to model financial statements 
  • Basic Excel model building principles 
  • Key Excel commands 
  • Planning the layout of financial information 
  • Manipulating financial information

Case Study: Exercise in calculating the interest charge and loan repayments arising on bank debt


Session 2: The income statement 

  • Double entry as a principle 
  • Debits and credits 
  • Measuring revenues 
  • Computing the cost of goods sold 
  • Calculating depreciation 
  • Accrual accounting

Case Study: Preparing a profit and loss account


Session 3: The balance sheet 

  • Fixed versus current assets 
  • Measuring stock 
  • Working capital 
  • Share capital 
  • Borrowings 
  • Minority interests

Case Study: Preparing opening and closing balance sheets


Session 4: The cash flow statement 

  • Difference between cash and profit 
  • What consumes cash 
  • Deriving the cash flow statement from the income statement 
  • Changes in financing sources

Case Study: Preparing a cash flow statement


Day 2

Assessing Financial Performance


Session 1: Managing working capital

  • Measuring the working capital investment
  • Key business risks in working capital 
  • Impact on the profit and loss 
  • Impact on balance sheets

Case Study: Measuring the cost of goods sold

Session 2: Assessing profitability and performance 

  • How efficient is the company? 
  • Margin analysis 
  • Return on capital employed 
  • The effect of gearing on performance ratios 
  • Measuring productivity 
  • Assessing dividends and dividend policy 
  • Dupont analysis

Case Study: Assessing the performance of a major retailer

Session 3: Assessing the balance sheet, key credit ratios 

  • Measuring financial health 
  • Measuring liquidity 
  • Measuring gearing 
  • Interest coverage ratios 
  • Managing working capital 
  • Fixed charge cover 
  • Debt cover 
  • Net worth

Case Study: Analysing the balance sheet for a major manufacturer

Session 4: Accounting scams 

  • The nature of accounting - science or alchemy 
  • Manipulating the balance sheet 
  • Window dressing 
  • Off-balance sheet items and their significance 
  • Revenue recognition and how to make sales 'take-off' 
  • Maximizing profit by minimizing costs and expenses 
  • Fraud - can it be detected?

Case Study: Discussion of an SEC report into a fraudulent accounting scheme


Day 3

Valuation using cash flows


Session 1: Investment Appraisal Techniques 

  • Time value of money 
  • Appraising investment projects 
  • Alternative measures of value 
  • Payback period 
  • Discounted payback period 
  • NPV 
  • Discount factors 
  • Assumptions behind the process 
  • IRR 
  • Introductory sensitivity analysis 
  • Scenario analysis

Case Study: Comparing alternative investment opportunities and developing sensitivities of returns to variations in key project parameters

Session 2: The Dividend discount model (DDM) 

  • The Gordon growth model 
  • Key assumptions 
  • Key weaknesses 
  • Company approaches to dividend policies 
  • Forecasting dividends 
  • A two-stage dividend discount model 
  • A three-stage dividend discount model 
  • Using the DDM to value the whole equity market 
  • Relationship between retention/pay-out rate and dividend growth

Case study: Using the DDM for a valuation

Session 3: WACC/DCF based company valuation 

  • Capital structure 
  • Weighted average cost of capital (WACC) 
  • Cost of equity and debt 
  • Valuation using WACC 
  • Capital asset pricing model (CAPM) 
  • Estimating beta and the equity risk premium 
  • Computing a forward-looking risk premium 
  • Alternative models to CAPM 
  • Unquoted company valuation approach 
  • Size effect

Case Study: Calculating WACC, Calculating cost of equity, regearing beta

Session 4: WACC valuation 

  • Definition of free cash flow (FCF) 
  • Difference between free cash flow to firm (FCFF) and free cash flow to equity (FCFE) 
  • Preparing cash flows 
  • Estimating the cash flows in the terminal value period 
  • Growth rates in the terminal value period 
  • Growth versus cash flow

Case study: Calculating free cash flows for an international company


Day 4

Valuation using multiples


Session 1: The terminal value calculation
 

  • The steady state as a benchmark 
  • Steady state assumptions 
  • Modelling the impact of an investment on cash flows 
  • Assessing the impact on key credit ratios 
  • Mandatory capex versus discretionary capex 
  • Corporate taxation 
  • Checking the assumption about capital structure

Case Study: WACC enterprise valuation

Session 2: Using WACC to value an acquisition target 

  • Developing a model of cash flows 
  • Estimating the terminal value 
  • The steady state scenario 
  • Sensitivity analysis of the terminal value 
  • Checking assumption integrity 
  • Preparing a sensitivity table to model growth rates and WACC values

Case Study: Valuation of an acquisition prospect using WACC

Session 3: Non-controlling interests (= minorities) 

  • The impact of a minority on the WACC process 
  • Including the minority cash flows 
  • Excluding the minority cash flows 
  • Using an enterprise multiple to second guess the terminal value 
  • Including an enterprise multiple in a sensitivity table 
  • Including non-operating assets in the valuation

Case study: Company valuation with large minority

Session 4: Price earnings ratios (PER) 

  • Definition of the PER 
  • Derivation of the PER 
  • Links to the DDM 
  • Key attributes of earnings 
  • Problems with PERs 
  • Impact of gearing 
  • Impact of fast short term growth 
  • Using the PEG ratio

Case study: valuation of an international company


Day 5

Valuation using multiples


Session 1: Enterprise multiples 

  • Multiples based on enterprise values 
  • Theory behind the ratios 
  • Key earnings related multiples: EV/EBIT(DA) 
  • Cash flow based multiples 
  • Selection of comparable companies 
  • Dealing with minorities 
  • Multi-activity companies

Case Study: IPO valuation

Session 2: Non-earnings based multiples 

  • Alternative ratios to use when earnings are unavailable 
  • Price/sales 
  • Price/book 
  • Price/proxy 
  • Industry or sector multiples 
  • Asset valuations: forced sale v. going concern 
  • Valuation of asset based companies 
  • Property companies 
  • Investment companies 
  • Resource company valuation 
  • Discounts and their explanations

Case study: airline valuation

Session 3: Real options approach to valuation 

  • Projects as options 
  • The valuation of flexibility 
  • Introduction to option valuation methodology 
  • Payoff charts 
  • Put and call option parity 
  • The binomial model 
  • Black and Scholes (provided in a spread sheet)

Case study: Volatility measurement

Session 4: The option to defer, to expand, to delay 

  • The value and cost of delay 
  • Impact of the time horizon: limited exploitation license life 
  • Using option valuation methodology to value the delay option 
  • Value in uneconomic discoveries as an option 
  • Using the option valuation methodology for mines 
  • Valuing the option to walk away 
  • Using existing market values to obtain valuation benchmarks 
  • Using a combined approach to valuing producing assets and discoveries

Case study: Valuing mineral reserves in the ground before extraction

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product