Corporate Valuation in Practice – EY Academy of Business

Corporate Valuation in Practice

The ability to independently value an enterprise or its organized part and the ability to interpret valuation reports prepared by advisors or stock market analysts is an essential tool for making business and strategic decisions.

This two-day training workshop is addressed to:

  • Managers,
  • Statutory auditors,
  • Financial analysts and persons responsible for financial reporting,
  • Financial controllers,
  • Chief accountants,
  • Financial directors and employees of investor relations departments,
  • Employees of companies considering IPO as well as considering obtaining financing (banks, VC / PE funds),
  • Persons working in the corporate banking division,
  • Employees of financial and investment departments in companies,
  • Business owners or their representatives who would like to understand the valuation mechanisms in order to be able to estimate the value of their assets,
  • Advisors in consulting companies,
  • Employees of law firms and all persons interested in the subject of valuations.

Course objectives

  • Familiarizing participants with valuation methods,
  • Showing the presented methods on practical examples,
  • Identifying the main factors affecting enterprise value,
  • Discussion of the most important dilemmas and limitations related to corporate valuations.

1. Introduction to valuation

  • price versus value –  what is the difference
  • valuation – key terms and definitions
  • valuation methods: asset-based, discounted cash flows, relative
  • valuation perspectives – an objective or subjective process?
  • reasons behind conducting valuation
  • sources of information used for valuation purposes

2. DCF method (discounted cash flows)

  • cash flows according to DCF, what cash flows to apply?
  • FCFF (free cash flow to firm)
    • enterprise value – definition and methods of calculation
    • practical methods of mapping a business model and corporate strategy in excel and creating reasonable forecasts
    • valuation of growth, mature and cyclical companies
  • residual value – when can it be applied, what assumptions are reasonable
  • FCFE (free cash flow to equity)
    • shareholder value – definitions and calculation methods
    • adjustments between FCFF and FCFE (e.g. net debt, provisions, factoring, non-operating assets)
    • impact of group’s structure and consolidation methods on FCFF and FCFE
  • number of shares and necessary adjustments
  • application of DCF model to M&A (types of synergies, purchase for cash/debt versus share exchange)
  • advantages and disadvantages of DCF method and ways of its application
  • practical exercise, use of DCF method to value a company growing organically and conducting M&A

3. Cost of Capital

  • time value of money
  • cost of debt
  • cost of equity (CAPM), key elements
  • weighted average cost of capital (WACC)
  • optimal capital structure
  • practical exercise, WACC calculations

4. Peers comparison method

  • key characteristics, application possibilities, required assumptions
  • key valuation multiples based on market capitalisation and enterprise value (e.g. P/E, EV/EBITDA, P/BV, EV/Sales)
  • advantages and disadvantages of key multiples
  • criteria for choosing peers
  • advantages and disadvantages of the method
  • practical exercise: peers comparison valuation, discussion of the results

5. Alternative valuation methods

  • ‘sum-of-the-parts’ method
    • how to use operating segments in valuation
    • advantages, disadvantages and possibilities of application
    • practical valuation exercise
  • DDM method (discounted dividends model)
    • advantages, disadvantages and possibilities of application
    • practical valuation exercise
  • EVA® method (Economic Value Added)
    • what is economic value added
    • why is it the simplest and the hardest valuation method at the same time
    • assumptions, advantages and disadvantages of the method
  • real options
    • assumptions, advantages and disadvantages of the method
    • application of call and put options to valuation
    • practical exercise

6. Summary

  • limitations, subjectivism and dilemmas in valuation
  • valuation through the eyes of equity analyst – an example of an analytical report created by a brokerage house analyst, discussion on the content and perspective from which the valuation is created

Milena Olszewska-Miszuris - Milena specialises in valuations as well as financial and non-financial analysis and possesses over a dozen years of experience on the capital markets. She holds three international designations: CFA, ACCA and FSA Credential.

Corporate Valuation in Practice

The ability to independently value an enterprise or its organized part and the ability to interpret valuation reports prepared by advisors or stock market analysts is an essential tool for making business and strategic decisions.

For whom?

This two-day training workshop is addressed to:

  • Managers,
  • Statutory auditors,
  • Financial analysts and persons responsible for financial reporting,
  • Financial controllers,
  • Chief accountants,
  • Financial directors and employees of investor relations departments,
  • Employees of companies considering IPO as well as considering obtaining financing (banks, VC / PE funds),
  • Persons working in the corporate banking division,
  • Employees of financial and investment departments in companies,
  • Business owners or their representatives who would like to understand the valuation mechanisms in order to be able to estimate the value of their assets,
  • Advisors in consulting companies,
  • Employees of law firms and all persons interested in the subject of valuations.
Objectives and advantages

Course objectives

  • Familiarizing participants with valuation methods,
  • Showing the presented methods on practical examples,
  • Identifying the main factors affecting enterprise value,
  • Discussion of the most important dilemmas and limitations related to corporate valuations.
Programme

1. Introduction to valuation

  • price versus value –  what is the difference
  • valuation – key terms and definitions
  • valuation methods: asset-based, discounted cash flows, relative
  • valuation perspectives – an objective or subjective process?
  • reasons behind conducting valuation
  • sources of information used for valuation purposes

2. DCF method (discounted cash flows)

  • cash flows according to DCF, what cash flows to apply?
  • FCFF (free cash flow to firm)
    • enterprise value – definition and methods of calculation
    • practical methods of mapping a business model and corporate strategy in excel and creating reasonable forecasts
    • valuation of growth, mature and cyclical companies
  • residual value – when can it be applied, what assumptions are reasonable
  • FCFE (free cash flow to equity)
    • shareholder value – definitions and calculation methods
    • adjustments between FCFF and FCFE (e.g. net debt, provisions, factoring, non-operating assets)
    • impact of group’s structure and consolidation methods on FCFF and FCFE
  • number of shares and necessary adjustments
  • application of DCF model to M&A (types of synergies, purchase for cash/debt versus share exchange)
  • advantages and disadvantages of DCF method and ways of its application
  • practical exercise, use of DCF method to value a company growing organically and conducting M&A

3. Cost of Capital

  • time value of money
  • cost of debt
  • cost of equity (CAPM), key elements
  • weighted average cost of capital (WACC)
  • optimal capital structure
  • practical exercise, WACC calculations

4. Peers comparison method

  • key characteristics, application possibilities, required assumptions
  • key valuation multiples based on market capitalisation and enterprise value (e.g. P/E, EV/EBITDA, P/BV, EV/Sales)
  • advantages and disadvantages of key multiples
  • criteria for choosing peers
  • advantages and disadvantages of the method
  • practical exercise: peers comparison valuation, discussion of the results

5. Alternative valuation methods

  • ‘sum-of-the-parts’ method
    • how to use operating segments in valuation
    • advantages, disadvantages and possibilities of application
    • practical valuation exercise
  • DDM method (discounted dividends model)
    • advantages, disadvantages and possibilities of application
    • practical valuation exercise
  • EVA® method (Economic Value Added)
    • what is economic value added
    • why is it the simplest and the hardest valuation method at the same time
    • assumptions, advantages and disadvantages of the method
  • real options
    • assumptions, advantages and disadvantages of the method
    • application of call and put options to valuation
    • practical exercise

6. Summary

  • limitations, subjectivism and dilemmas in valuation
  • valuation through the eyes of equity analyst – an example of an analytical report created by a brokerage house analyst, discussion on the content and perspective from which the valuation is created

Price

PLN 2300 net (EUR 525 net)

Contact us about organising this course in-house!

Location

Online

Date

New date will be announced

Contact

Natalia Medyńska

Course coordinator

  • +48 789 407 645
  • natalia.medynska@pl.ey.com