Course Objectives
By the end of the course, participants will be able to:
- Apply time value of money concepts
- Perform and interpret financial analysis
- Apply cost of capital calculation techniques
- Construct forecasted financial statement models and perform sensitivity analysis
- Use the free cash flow technique in determining the value of a project or a company
- Develop financial models using different Excel modelling techniques
Course Outline
Financial calculations: Applications
- Time value of money:
- Present value and net present value
- Internal rate of return and Multiple IRR (MIRR)
- Using XNPV and XIRR
- Amortization of loan schedule
- Effective yields and returns
Corporate financial analysis
- Profit and loss versus balance sheet analysis
- Comparable company analysis
- Building block analysis
- Vertical, trend, and horizontal analysis
- Liquidity
- Current, quick, and cash ratios
- Asset management and activity
- AR and AP Turnover
- Cash conversion cycle
- Asset turnover
- Solvency, leverage and gearing
- Debt, equity, and times interest earned ratios
- Assessing profitability management
- Profit margin, gross margin, return on assets, return on equity
- Market and valuation
- Price-earnings and earnings per share ratios
- Modeling the DuPont identity
- The three-step models
Calculating cost of capital and capital structure
- The Gordon dividend model
- Supernormal growth
- Calculating cost of equity and cost of debt
- Computing the expected return on the market
- Computing weighted average cost of capital
Financial statement modeling
- How financial models work
- Modeling income statement
- Modeling balance sheet
- Free Cash Flow measurement (FCF)
- Using FCF to value the firm and its equity
- Sensitivity analysis
- Discounted cash flow analysis
- Developing an integrated financial model
Model construction techniques
- Data tables design
- Assumptions and input variable rules
- Array functions and formulas
- Spinner data modeling
- List box data modeling
- Option box data modeling
- Acquiring and updating data from the text, access database, SQL, and the web