Day 6 - Valuation Fundamentals and Trading Comparables

Day 6 a.m. - Valuation Fundamentals

The session lays the foundations to build a solid understanding of corporate valuation in the context of investment banking. The most common valuation methodologies are introduced, explaining the difference between a company's fundamental value, and how much an acquirer would pay for the business. The concepts of enterprise value and equity value are explained, using simple but rigorous exercises. Finally, the basics of multiple valuation and discounted cash flow valuation are introduced. Exercises are used throughout the session.

Key topics:

• The importance of valuation in the investment banking industry
• Fundamental value versus how much an acquirer will pay
• 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
• How to calculate enterprise value using market values
• How to calculate enterprise value using a fundamental valuation approach

Day 6 p.m. - Trading Comparables Fundamentals

Once participants understand the different approaches to valuation they are then introduced to the details of comparable company analysis. Multiples are calculated on both a historical and forecasted basis and participants will assess the value of the case company based on a given set of comparables. Public information books (“PIBs”) are used throughout the session.

Key topics:

• 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
• Calendarization issues
• Last-twelve months analysis
• Calculating a range of forward looking and historical earnings multiples
• Revenue
• EBITDA
• EBIT
• PE
• PEG
• Other value driver metrics
• Applying the results