Sales Training

Tel: 0845 8901701*

Sales Training BrochureFacebookTwitterLinkedin

Valuation Modelling Course

This financial training course is conducted as a workshop where delegates work tvalue a target business of their choice, using DCF and comparable/ relative valuation multiples.

The course provides participants with a comprehensive review of company valuation, the main techniques and their inter-relationships. The review will cover sourcing data for valuation, “cleaning” source numbers, defining and calculating firm value (enterprise vs. equity value), calculating reference multiples, applying them ttarget companies and valuing target companies using various valuation techniques.

Just like they might have tin their jobs, delegates start with a set of publicly available accounts they have brought tclass. During this training course delegates:

Use publicly available accounts tcalculate recurring underlying earnings for their target company
Determine comparable businesses that might form part of the target’s peer group and where they could source information relating tthose other businesses
Using publicly available data, calculate an appropriate series of valuation multiples for the target business
Learn how twork from equity tenterprise value and back again
Value the target business.

Detailed case study work: Participants will value a target company using both DCF (Discounted Cash Flow) and comparable/ relative/ multiples based methods. The course will be punctuated with detailed case work and exercises, frequent opportunity for discussion as well as “hands on” application of the principles introduced on the course


Session 1 - introduction tthe case study

  • Modelling integrated financial statements
  • What makes a good model?
  • Model structure
  • Dwe really need integrated financial statements?
  • Key forecast ratios
  • Sourcing and cleaning historic data
  • Getting tunderlying profitability
  • Common adjustments – a check list
  • Checking the integrity of the forecast data

Modelling – integrating financial statements: participants complete a partially-developed financial model for the case study which integrates P&L, balance sheet and cash flow. This model is used tanalyse an acquisition by the business

Session 2 - case study: calculating free cash flow

  • Comparative valuation
  • Calculating free cash flow before financing
  • Understanding and calculating WACC
  • Conducting a DCF valuation

Modelling - valuation: delegates calculate free cash flow before financing for the case study

Session 3 - case study: calculating WACC

  • Discussion – calculating WACC:
  • Sources for beta estimates
  • Levering and re-levering beta
  • Obtaining a peer group
  • Obtaining interest rates

Modelling – delegates calculate the cost of capital for their case business

Session 4 - case study: calculating shares value

  • Defining firm value
  • How should we define firm value?
  • How dwe reconcile t“debt free cash free” valuation?

Modelling – firm value: delegates work from enterprise value and use financial statements tcalculate equity value


Session 5 - structuring a new deal – sources & uses of funds

  • Introduction tthe fundamental principles of deal structuring
  • Exploring “sources & uses” - a key learning concept for the course
  • Concentrating on the key levers without getting bogged down in complex models

Case study: delegates develop their own deal structure for a transaction, drawing on information contained in public documents

Session 6 - consolidating accounts

  • Acquisition modelling – consolidating accounts
  • Key adjustments
  • Working from the post-acquisition balance sheet
  • How tmodel and consolidate accounts
  • Modelling pr-forma accounts

Modelling –consolidated accounts: participants build an acquisition structure for a new deal and analyse the impact of the form of consideration

Session 7 - financing acquisitions

  • Clear, simple and concise explanation of different debt instruments:
  • Senior debt
  • High-yield debt
  • Mezzanine
  • Payment-in-Kind
  • Understanding the nature of different financial instruments and risk profiles
  • Modelling waterfall structures
  • Estimating and optimising debt capacity

Modelling – debt structure: delegates develop a debt structure for the case study and start tflex the structure within given constraints. How much debt could the business support? How big a target could it contemplate acquiring? What impact does changing the debt structure have on debt capacity?

Session 8 – keeping finance providers happy

  • Key considerations for debt holders - keeping finance providers happy
  • Typical covenant tests for a bank
  • Conditions of default
  • Covenant trends
  • Typical tests employed by rating agencies

Exercise: - delegates consider how S&P would rate debt in a real business


Session 9 - modelling stand-alone valuation

  • Valuation methodolgies
  • What dinvestment banks d?
  • What methodologies could we use?
  • Overview: comparative vs. absolute valuation:
  • Benefits and risks of comparative valuation
  • Which multiples are more volatile?
  • Are revenue multiples ever appropriate?
  • How dwe get tunderlying business value?

Session 10 - choosing comparable companies - manipulating comparable company analysis

  • Issues in choosing comparable companies
  • Stepping through comparable company analysis – the process
  • Sources of info
  • Keys tselecting comparables
  • Comparable analysis: pitfalls

Session 11 - selecting multiples 

  • Overview of common multiples
  • Which strip out variability? Which are more volatile?

Session 12 - normalising earnings and source data 

  • Key issues in source data: getting tharmonised and maintainable earnings, making use of data available tthe market
  • Cleaning the numbers
  • Key adjustments
  • Discontinued operations
  • One off & exceptional items
  • Tax effects
  • Pensions and other items that look like finance costs
  • The role of judgement & detective work

Case exercise – cleaning the numbers. Delegates work from a set of accounts and adjust tget tunderlying profitability.

  • Summary: cleaning the numbers – a check list

Session 13 - defining firm value and calculating multiples - enterprise vs. shares value

  • Routes tvaluation/ applying it in practice
  • Key adjustments e.g. provisions and minority interests
  • Overview of common multiples

Case exercise – equity tenterprise value. Delegates work from a set of accounts treconcile equity and enterprise value, adjusting for debt, cash, provisions and minority interests.

  • Discussion – multiples – which are more volatile? Which is best when? 
  • Applying it in practice.


Site Search

Course Finder


Contact Us


Free Training Downloads

Sales Training Brochure