Financial Modelling: Corporate Performance and Acquisitions

Essential modelling techniques for corporate cash flow projection and corporate valuation

Course overview

This is a practical, hands-on course. Financial modelling is the result of combining a rigorous application of modelling best practice with an understanding of the relationships being modelled. Since participants may not be experts in technical areas of corporate accounting and valuation, individual tuition is available where necessary.

Participants on this course may also wish to attend Financial Modelling: Modelling Financial Instruments.

Programme

Guidelines for building better corporate models and forecasts

• Design structures for auditability and flexibility
• Combining economic, financial and accounting disciplines to generate forecasts and valuations
• Dealing with uncertain outcomes

Auditability

• Protecting your work and checking the integrity of the model
• Data validation with Excel

Addressing frequent modelling problems

• Circularity in calculating interest
• Contingent cash flows
• Reducing complexity

Maximising, minimising and optimising

• Using Goalseek and Solver
• Using the outcome of optimisation to refine the model and better understand real relationships

Projecting corporate cash flows

• Understanding the drivers
• Modelling capital expenditure and depreciation
• Modelling working capital investment
• Incorporating tax and dividends in each financial statement
• Debt and interest payments

Using cash flow projections for valuation

• Structure projections for use in valuation
• Mechanics of importing cash flow data with ensured integrity
• Ensuring correct valuation methodology

Acquisition case study

• Projecting a target’s financial performance
• Building a valuation model from projected performance
• Projecting performance of the proposed post acquisition combined entity incorporating the acquisition funding

Models to reflect uncertainty

• Incorporating uncertainty into a model
• Dealing with uncertain outcomes
• Creating a Monte Carlo simulation
• Displaying the outcomes of a model incorporating uncertainty

What you will gain

• Participants will gain a detailed understanding of how to structure corporate valuation models, the demands placed on them, how models’ integrity can be demonstrated and how they can be used as a basis for explaining recommendations to others. This will increase participants’ confidence in building and using models, ensuring increased productivity and reduced error rates.

Who will benefit?

• All those who use spreadsheets to calculate, model or explain corporate performance and valuation
• Professionals who want to increase the power, flexibility and transparency of their corporate valuation models
• Treasurers who need to deepen and broaden their understanding of corporate financial relationships, drivers and sensitivities.

Trainer

• Doug Williamson FCT. Ian Jakeways FCT.