Equity Valuation

Register Now

8-9 Jun 2015 London

Early Bird price until 17 Apr £1795 + VAT. Regular price £2095 + VAT. Group discounts available at all times: 5% for 2 and 10% for 3 people.

Course Description

This intensive 2 day course will equip you with the skills required to effectively evaluate companies and assets. Conducted by a former City banker the course starts with an overview of different equity valuation methods and explains fundamental framework. 

Working through models and case studies based on real companies you will have a chance to go through various ratios including cash flows, discount rates and periods, DCF, capital structure and understand the important parameters that can cause the valuation to break down if overlooked. 

 

What Will You Learn

 By the end of this course you will be able to:

  • Differentiate and apply the main types of equity valuation 
  • Evaluate balance sheet as well as profit and loss accounts and cash flow statements
  • Use comparative company valuation and calculate multiples in practice
  • Have an understanding of the DCF model structure and how it is used to value a company in practice
  • Learn the fundamentals of future cash flow valuation
  • Calculate the cost of capital and understand the basics of discounted rates and periods
  • Understand the basics of discounted rates and periods
  • Build the bridge between enterprise and equity valuation

Main Topics Covered During This Training

  • The core valuation approaches: enterprise and equity value
  • Calculating key multiples: EBITDA, EBIT, P/E, P/E/G
  • Calculating operating and credit ratios
  • Analysing trading and transaction comparables
  • Corporate analysis and financial statements review
  • Calculation and interpretation of key ratios
  • DCF valuation
  • WACC and terminal value calculation 
  • LBO Valuation in practice
  • Case studies and exercises throughout the programme

Who Should Attend

From Corporates, Banks and Financial Institutions, Investment Funds, Accounting, Consulting and Legal companies

  • Equity Research, Analysts and Sales
  • Equity Capital Markets
  • Investment Managers
  • Members of M&As Departments
  • Corporate Financial Managers
  • Corporate Development
  • Corporate Finance Lawyers
  • CFOs and Finance Directors and Managers
  • Accountants
  • Analysts 
Register Now

8-9 Jun 2015 London

Early Bird price until 17 Apr £1795 + VAT. Regular price £2095 + VAT. Group discounts available at all times: 5% for 2 and 10% for 3 people.

Delegates have to be from the same company and register at the same time.

1.1 VALUATION FUNDAMENTALS

The session intends to explain how to build a solid understanding of corporate valuation. The most common valuation methodologies are introduced, exercises are used throughout the session.

Key topics:

  • The importance of valuation 
  • Overview of the major valuation methods

             - Trading comparables analysis

             - Discounted cash flow analysis

             - Transaction comparables analysis

             - LBO analysis

  • Enterprise versus equity value
  • Book values versus market values
  • Derivation of enterprise values using market values

Case Study: Valuation of a UK SME based on different methodologies

 

1.2 TRADING COMPARABLES

Participants are introduced to preparing multiples using real company data and a case study including a range of international companies. We focus on how to select comparables, where to find data in published financials and equity research reports, how to clean the raw data, and how to document and check the output. 

Key topics:

  • Screening companies to identify a suitable comparable set
  • Calculating the company’s value

             - Number of shares and value of share options

             - Equity value

             - Net debt calculations

             - Enterprise value

  • Calculating the earnings numbers

             - Cleaning non-recurring items from earnings and resulting tax adjustment

             - Calendarization issues

             - Last-Twelve Months (LTM) analysis

  • Calculating a range of forward looking and historical earnings multiples

             - Revenue ; EBITDA ; EBIT ; P/E ; P/E/G

             - Industry-specific multiples

  • Calculating and using operating and credit ratios
  • Troubleshooting and checking the output
  • Applying the results

 

Case Study: Valuation of Danone

 

1.3 TRANSACTION COMPARABLES

Participants are introduced to preparing a transaction multiples matrix using LTM earnings. The rationale and components of control premium and its impact on valuation are discussed. 

Key topics:

  • Difference between trading multiples and multiples from precedent transactions
  • Selection of transactions and information gathering
  • Control premium and synergies
  • Practical issues with transaction comparables
  • Analysis and summary output

 

1.4 DCF VALUATION

Participants learn how to build a discounted cash flow valuation model. The session starts with an overview of the valuation methodology, and the steps required in setting up a valuation model. We then focus on the calculation of free cash flow. We analyze the weighted average cost of capital, calculate terminal values, using both the exit multiple method and the perpetuity growth method. We discount the free cash flows to arrive at enterprise values and calculate the implied share price. Once the valuation is complete participants perform several checks on the analysis using key ratios, and sensitivity and scenario analysis.

Key topics:

  • Calculating unlevered free cash flows

             - Drivers of cash flow

             - Ratio analysis

  • Weighted average cost of capital

             - Optimal capital structure using peer analysis

             - Establishing the company’s forward looking cost of debt

             - Cost of equity: understanding the risk free rate, the equity risk premium and beta

             - Unlevering and relevering the beta

             - Calculating WACC for the case company

  • Calculating the terminal value

             - Perpetuity growth (Gordon Growth model) method

             - Exit multiple method

  •  Building a discounting model

            - Mid-year adjustments

  •  Calculating enterprise and equity values
  •  Sanity checks

              - Reinvestment rate and ROIC

              - Implied multiples and growth rates

              - Percentage of value in the terminal period

Case Study: DCF Valuation of Danone

1.5 LBO VALUATION

Participants are introduced to the basic concepts underlying leveraged buyouts. The session starts by establishing why private equity firms can create value through leveraged buyouts and how the levered valuation fits into the valuation roadmap.  

Key topics: 

  • What an LBO is and how it can create value
  • LBO valuation as an alternative valuation methodology
  • Characteristics of suitable LBO candidates
  • Estimating cash flows available to capital holders
  • Estimating debt capacity
  • Simplified debt / equity split for entry capital structure
  • Sources and uses of funds
  • Debt structure
  • Estimating the exit value
  • Calculating the IRR
  • Sensitizing the model

 

Case Study:  LBO Valuation of Conagra

Serge began his career as a Credit Analyst at Banque Continentale in Luxembourg, where he conducted credit analyses for short and long-term credits and participations in loan syndications. He then worked as a Senior Auditor for Deloitte & Touche in Luxembourg, auditing and preparing financial statement for a variety of banks, insurance, investment funds, venture capital and commercial companies. 

Serge continued his career in Investment Banking at Citigroup (ex-Salomon Smith Barney) in London and New York where he worked on variety of M&A, LBO and debt offerings, mainly for financial services clients. Serge was involved in the EUR 20 billion public offer of Crédit Lyonnais by Crédit Agricole, one of the largest European banking transactions.

Serge then worked as a Vice-President in the internal M&A department of Barclays Bank in London where his experience included the acquisition of ABSA, one of the leading South African banks, the purchase of ING Private Banking in France and the failed acquisition of Banco Atlantico in Spain.

Serge founded and manages a property consultancy and is an experienced financial trainer in the fields of Corporate Finance (Valuation, M&A, LBO), Capital Markets and Regulatory Capital.

Serge has an MBA from the Kellogg School of Management in Chicago and a Bachelor of Science from the International Management Institute of Paris. 

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Equity Valuation <p>This intensive 2 day course will equip you with the skills required to effectively evaluate companies and assets. Conducted by a former City banker&nbsp;the course starts with an overview of different equity valuation methods and explains fundamental framework.&nbsp;</p> <p>Working through models and case studies based on real companies you will have a chance to go through various ratios includ ... London