Full Course Name: Enhanced Core Comprehensive: Financial Modeling and Corporate Valuation
5 Day Core Comprehensive Financial Modeling and Corporate Valuation course explores the modeling and valuation techniques commonly used by Wall Street firms. The proven curriculum provides practical application of the standards and methods that a practitioner needs to be a top performer. Led by our team of experienced instructors, all of whom are former practitioners, the primary focus of the program is to teach participants the practical applications of the theoretical methodologies. Participants will blend accounting, finance, and Excel skills into the construction of three interactive models from “scratch” (3 statement, M&A, and LBO) over the course of 5 intense days of training.
The new Enhanced program incorporates robust features that have traditionally only been available to our on-site training clients. These newly available features include:
Note: The accounting pre-instruction assessment ties back to specific pages in the Fundamentals of Financial Accounting and Analysis self-study for follow-up and reinforcement
- TTS Resource Center – Through their unique login, each participant will have access to our web based learning environment, which includes; access to training content (including over 500 support videos), online assessments, and a classroom portal that enhances instructor and student interaction.
- Performance Tracking - Through the Resource Center, participants have the ability to track and compile a record of their personal performance throughout training. This record of performance can be provided to the participant’s sponsoring firm.
- Fundamentals of Financial Accounting and Analysis SmartBook® – Participants will be provided with access to the course prior to training. This allows participants to be “level set” prior to live instruction; serving as a refresher for some participants and getting those with little to no accounting background up to speed. These materials also serve as an excellent reference post training.
- Online Assessments – Prior to training, participants will complete an accounting pre-instruction assessment to ensure a base level of accounting skills*. Throughout live training, daily mastery quizzes ensure that participants are on track, retaining important learning objectives. Once live classroom instruction is complete, TTS will administer a comprehensive final examination to measure the participant’s overall learning.
- Online Video Content – Participants will have 24/7 access to core video content, knowledge check videos, and advanced video content via the TTS Resource Center.
- Evening Homework Assignments – Homework will be graded with instructor’s comments and feedback. A Teaching Associate will be present to answer questions on these assignments.
- Post Training Support – Once participants leave the classroom, the learning continues. Participants will have access to the TTS Core Video Library through March 31st of the following year. So when its late in evening and they can’t remember how to calculate diluted shares outstanding using the Treasury Stock Method, there is a reliable, 24/7 resource to get what they need.
Before Live Instruction
Prior to the start of the course, each participant will need to complete the following:
What to Bring
- Accounting pre-instruction assessment – This exam will be administered via the Resource Center, prior to class, and will take approximately 2 hours to complete.
- Adaptive Accounting Pre-work – Based on their pre-instruction assessment score, each participant will receive an individual learning path within Fundamentals of Financial Accounting and Analysis SmartBook®. Designed to ensure they have the foundational skills to gain the most from the live instruction. Completion times range from 2-15 hours based on score band.
- Case study prep – TTS provides a pre-reading exercise designed to familiarize participants with the case company and its related financial documents. This exercise takes generally takes ~3 hours to complete.
Each participant will need the following:
Thinking of bringing a Mac? Using a Mac for Financial Modeling presents several issues; the keyboards are different causing many of the shortcuts to be unavailable, as well as the functionality of Excel itself. It is highly recommended that all participants bring a PC to the session. If a Mac is the only option, we would recommend running Windows on your Mac.
- PC Laptop with an English version of Microsoft Excel, Word, and Adobe Acrobat Reader
- USB memory stick ability (for file sharing and distribution)
Core Comprehensive Outline:Day 1 –Public & Acquisition Comparables and Discounted Cash Flow Analysis
Overview of valuation methodologies and fundamental concepts
Public Comparables Analysis:
- Choosing the appropriate peer group
- Gathering public information
- Calculating market and enterprise value
- Normalizing for non-recurring items
- Calculating latest twelve months (LTM)
- Calculating relevant multiples
- Deriving an implied valuation range
- Analyzing multiples and a comparables universe
- Exercise: “Spreading public comparables” for the case company
Overview of Acquisition Comparables Analysis:
- Choosing the appropriate deal list
- How control premiums and synergies impact multiples
- Sources of public information
Discounted Cash Flow Analysis:
- Strengths and considerations of a DCF analysis
- Deriving a weighted average cost of capital (WACC)
- Discounting unlevered free cash flows
- Estimating the terminal value (exit multiple vs. perpetuity growth rate approach)
- Determining the valuation range based on DCF analysis
- Exercise: Adding DCF output to a 3-statement model for the case company
Day 2 & 3–Financial Modeling & Advanced Sensitivity Analysis
- Imputing valuation ranges
- Creating a “Football field” for the case company based on different valuation methodologies
Mastery Quiz: Comparables and DCF
Overview and introduction to financial modeling
Excel best practices and efficiencies
Construction and Application of:
- Core statements
- Working capital schedule
- Depreciation schedule
- Amortization schedule
- Other long-term items schedule
- Equity schedule
- Shares outstanding schedule
- Debt and interest schedule
Troubleshooting the Model:
- Understanding and controlling for circular references
- Balancing the model
- Making the model “deal ready”
Utilizing the Finished Product:
Advanced Sensitivity Analysis:
Day 4 –Merger Consequences Analysis Mastery Quiz:
- Adding scenarios to the model
- Creating a toggle for cases and naming cells
Merger Consequences Analysis:
Day 5 –Leveraged Buyout Analysis
- Concept of affordability analysis
- Overview of SFAS 141/142 and IFRS 3
- Purchase accounting overview
- Creation of goodwill and write-ups, including possible incremental D&A
- Opening balance sheet and purchase accounting adjustments
- Pro forma income statement
- Accretion/dilution analysis
- Credit rating considerations
- M&A transaction considerations(stock vs. cash, social issues, etc)
- Asset vs. stock purchase
- Tax deductibility of goodwill
- Section 338 election
- Exercise: Building an M&A model for a potential acquisition of the case company
Mastery quiz: Merger consequences
Leveraged Buyout Analysis:
- What makes a good LBO candidate?
- Concept of value creation via de-leveraging, operational improvements and “multiple expansion”
- Sources of funding for an LBO
- Differing viewpoints for LBO constituents
- Purchase price determination
- Debt capacity and financing options (Pro rata facilities, institutional facilities, mezzanine capital)
- Sponsors equity and internal rate of return (IRR)
- Fundamentals of “recapitalization accounting”
- Mechanics of constructing an LBO model
- Exercise: Constructing an LBO model for the case company