Financial Analysis and Valuation

Columbia Business School Executive Education

Training overview

3 days

6,350 USD

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Next start date: 12/16/2019 - New York City

Columbia Business School Executive Education

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Course description

Financial Analysis and Valuation for Strategic Decision Making

The main task of any executive is to create value. In order to do this, managers need to have the capability to assess the financial impact of their decisions which requires an understanding of valuation methods and financial analysis techniques. This course teaches you to evaluate the financial consequences of business decisions and how to value projects, businesses and companies.

The course requires attendees to have a basic understanding of the following:

Financial statements, including the balance sheet, income statement, and cash flow statement.
Time value of money and present value calculations.
How accrual accounting differ from cash accounting, including revenue recognition (realization principle), expense recognition (matching principle), and asset and liability measurement (historical cost, selective fair value).

Participants will be able to:

Reformulate the financial statements to facilitate an informative analysis.
Analyze the reformulated financial statements.
See how business decisions and activities are reflected in financial statements.
Develop cash flow forecasts and pro forma financial statements.
Estimate the cost of capital.
Value companies, businesses, and investment projects.
Assess the value of mergers, acquisitions, and strategic alliances.
Evaluate and manage business risks.
Understand how various strategic, operating and financing decisions and activities affect value.
Conduct scenario and sensitivity analyses.

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Who should attend?

This course is suitable for:

Upper- and senior-level executives and other professionals interested in deepening their knowledge of financial analysis and valuation. This is not an “entry level” program, so participants should have a basic understanding of financial analysis, including financial statements, balance sheets, income statements, cash flow statements, and accounting.
Executives in non-finance roles or in such departments as strategic planning, marketing, operations, product development, consulting, and sales who need a higher level of proficiency in understanding, evaluating, and making decisions based on the financial standing of their business unit, business, or organization.
Financial executives, financial analysts and portfolio managers.

Training Content

Course Contents

Basics of fundamental valuation

The value of any investment or asset (e.g., project, business, company, stock, bond) is the present value of the net cash flow that the asset is expected to generate or save
- Identifying and forecasting the net cash flow
- Estimating the discount rate
- The dividend discount model as an example

The discounted cash flow (DCF) model for equity valuation

Deriving the model

DCF value = present value of free cash flow (FCF) discounted at the weighted average cost of capital (WACC)
Enterprise value = DCF value + value of non-operating assets (e.g., investments in associates)
Equity value = enterprise value – value of net debt

Defining and measuring free cash flow

A review of financial reporting
Reformulation of the financial statements to facilitate the measurement of cash flows to the various claim holders (equity holders, debt holders, other stakeholders)

Forecasting free cash flow

Drivers of free cash flow: revenue growth, operating profit margin, net operating assets turnover, and their components
Analysis and forecasting of the drivers of free cash flow, including explicit forecasts, transition/convergence forecasts, and steady-state assumptions

Estimating WACC

Sources of financing (equity, debt, hybrid equity/debt, operating credit, leasing and other off-balance sheet financing)

Capital versus operating credit
Gross versus net capital
Current versus long-term or target leverage

Determinants of the availability and cost of the various financing sources

Earnings retention and payout policy (dividends, share repurchases)
Short- versus long-term debt
Asset-backed financing
Lines of credit vs. cash and other liquid funds
The effects of leverage on operations

Risk management
Forecasting financing activities and constructing pro forma financial statements

Terminal value

Constant growth (Gordon) formula
Exit multiples

From DCF value to value per share
Scenario and sensitivity analyses

Relative valuation models

Price multiples
Conditional price multiples

Implementing the framework

Valuing companies, businesses, and investment projects
Assessing the value of mergers, acquisitions, and strategic alliances
Analyzing the value implications of various strategic, operating and financing decisions

Costs

See the schedule above or use the request information form to learn the cost of this course.

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Certification / Credits

Upon completion of this program, you will earn three days towards a Certificate with select alumni and tuition benefits.

About supplier

Columbia Business School Executive Education - At the Very Center of Business

Business practices in every sector are influenced by the groundbreaking research conducted by the Columbia Business School's faculty members. They teach an ever-evolving and transformative curriculum that develops leaders that are ready and capable of creating opportunity in any environment....