Introduction to Business Valuations - A Practical Workshop

Course Overview:

This seminar will give participants a thorough grounding in all of the basic techniques that need to be comprehended when valuing a business.

The mechanics of discounted cash flow arithmetic will be covered including the structuring of a model and participants will also gain a grasp of the issues surrounding the choice of the discount rate.

The course will also cover earnings based methods which are commonly used in valuing businesses in a variety of differing circumstances and will also address the alternative valuation techniques that may be deployed.

Participants will be required to bring a laptop with a USB port to the course.

Course Content:

Business Accounting Model – Collecting the Correct Data

• Basic accounting model
• Importance of cashflow in business performance
• Ingredients of profit and loss account statement
• Creative accounting problems
• Review of the different perspectives of valuation

Relative Valuation Techniques

• Using the dividend growth model approach
• Variations on the growth model
• Linking the dividend model with the price earnings (PER) ratio
• Understanding the key drivers of PER – risk and growth assumptions
• Relative sector per’s and the implications for future value
• Concept of EBIT and EBITDA multiples of enterprise value (EV)
• Cashflow multiples – EV / FCF, price / cashflow per share
• Sales, asset and other multiples used for valuation
• Understanding why different multiples are used for different valuations
• Benefits and drawbacks of relative valuation techniques

Discounted Cashflow Valuation

• Investment appraisal theory and principles of net present value
• Forecasting the cashflow of the firm
• Free cash flow (FCF) calculation
• Free cash flow to the firm (FCFF) and free cash flow to equity (FCFE)
• Estimating the cost of capital to apply as a discount rate
• Calculating the terminal value
• Limitations of the model

What our clients are saying about the course

“An excellent course by an experienced & very enthusiastic trainer”

“Real life examples”

“An excellent summery of issues”