International School of Corporate Finance

The school provides comprehensive coverage of all the key issues and challenges in corporate finance in ten modules covered over five days. All key areas of corporate finance theory are covered together with their practical application in such areas as project appraisal, M&A, buy-outs, private equity, corporate restructuring and value based management. When putting together any corporate finance deal, the potential creation of value is a key consideration. Corporate finance techniques and structures offer many companies the opportunity for value creation, but problems occur when they are either not fully understood or the wrong strategy is implemented. The development of a sound theoretical and practical understanding of corporate finance is a key feature of the school, with financial economics and a focus upon value being key themes throughout. Upon return to your organisation you should be fully prepared to put your learning into practice. This five day Corporate Finance School will cover: Core principles and major applications of corporate finance Valuation methodologies and techniques, their uses and abuses Cash flow approach vs. accounting approach Cost of capital and capital structuring M&A: public company takeovers and private company acquisitions The key characteristics of successful M&As How to analyse financial statements using the tools of corporate finance How to analyse and incorporate synergies in M&A analysis Restructuring and divestment as an important part of the corporate finance toolkit, specifically when to divest and the alternative ways of divesting a business. Leveraged finance and management buy-outs What are the essential features of leveraged buyouts and how are they structured? Financing alternatives and typical financing structures What is different about the strategic buyer and the private equity perspective? Entrepreneurial finance Value based management Who should attend? Corporate Financiers Financial Analysts, Planners and Corporate Decision makers Strategic Planning Executives Corporate Treasury Executives Accountants Management Consultants Lawyers Financial / Investment Analysts Investment Managers Materials Participants will be provided with a package of materials, including articles and sample documentation from transactions concluded. The workshop will include real case studies, hands-on exercises, and will give participants the opportunity to demonstrate their understanding through group work and plenary discussions.
Day 1 Introduction - Corporate Finance Decision Making: Basic concepts of corporate finance and illustrations of their importance The ultimate goal of a company - creation of value and total shareholder returns (TSR) Time value of money, discounted cash flow (DCF), the cost of capital (WACC) and their central importance to corporate finance Capital budgeting and overview of applications Valuation and overview of applications Risk management and overview of applications Theoretical Fundamentals of Corporate Finance: The foundations of corporate finance Discounted cash flow (DCF), capital budgeting and project appraisal - Tools of project appraisal - payback period, return on investment (ROI), net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) - Dealing with inflation, taxation, risk and uncertainty -relevance of the principles of finance - Fisher Effect - Tools and techniques for analysing and assessing risk and uncertain - Capital project proposals - analysis, interpretation and evaluation Capital structure and debt -overview of the optimal capital structure debt: debt versus equity - Importance of gearing/leverage - Capital structure and debt capacity - Valuing debt instruments and estimating the cost of debt - Yield to redemption - Credit spread Equity, dividend policy and the cost of equity - Supply and demand estimates - using dividends versus required investor returns - Review of: - Dividend Valuation Model (DVM) - Capital Asset Pricing Model (CAPM) - Risk free rate - Betas - Equity risk premium Case study: Estimation the cost of capital of a publicly traded company Financial Planning, Long-Term and Short-Term Funding: Understanding financial planning issues Case study: Developing and analysing a financial plan Day 2 Financial Accounting & Financial Statement Analysis: How to interpret information behind the numbers Case study: Analysing a financial plan by applying the DuPont framework Ratio analysis - Classification of ratios - Profitability ratios - Liquidity ratios - Working capital, including the importance of working capital management and the cash conversion cycle - Debt ratios - Market ratios - Capital structure and solvency - Cash flow analysis - Z-score analysis Earnings quality, creative accounting and fraud Case study: Analysing the financial statements of a publicly traded company using the conventional tools of financial analysis Performance measurement, income statement analysis and economic profit Introduction to economic profit analysis - What it is? - Why it is important? - How it is calculated? - How it relates to SVA (Day 1) Case study: Analysing a publicly traded company using economic profit analysis Valuation: Valuation tools and techniques Brief review of equity valuation methods: - Asset valuation - book, replacement and liquidation - Dividend and earnings valuation - Multiples and market relatives - Peer group selection - Earnings multiples - EAT, EBIT and, EBITDA - arguments for and against the use of each - Discounted cash flow (DCF) methods and fundamental analysis - Enterprise versus equity - Value driver analysis - Market signals analysis - 2 versus 3 stage models - Terminal value estimation - Real options Using different methods to triangulate and improve valuations Debt instrument valuation Case studies: Applying the different valuation methods: Multiples case DCF case Comprehensive case Day 3 Mergers & Acquisitions: All steps involved in the M&A process The M&A process Key success factors Estimating synergies - valuing existing businesses on a stand-alone basis and comparing them with the value of the combined businesses Importance of understanding different perspectives – control premium, valuation of synergies and perspective Valuing the acquisition target with synergies Potential acquisition defences - actions that a target can use to defend against a potential acquisition Case study: Estimating the value of synergies from an acquisition Due diligence - Review of due diligence - Types of due diligence - Linking due diligence with value driver analysis Structuring a deal Making mergers and acquisitions work - Why mergers and acquisitions fail - Characteristics of successful mergers and acquisitions - Key steps in successful integration Corporate Restructuring: The most important aspects of corporate restructuring Types of restructuring - Portfolio - Management - Financial Pressures to restructure - Business turbulence - Debt problem - Assessing vulnerability- financial ratios, Z scoring and A scoring How to restructure - Liquidations - Divestitures - Asset sales - Spin-offs Multi-business restructuring - Understanding the value of a portfolio - Understanding conglomerate discount - Assessing the value of the parts - Applying peer group analysis - Debt capacity and restructuring Case study: Debt capacity and the potential for financial restructuring Day 4 Entrepreneurial Finance: Concepts and institutions involved in entrepreneurial finance Understanding the challenges associated with entrepreneurial finance - The difference between corporate finance and entrepreneurial finance - The basic principles of entrepreneurial finance (staging of investments, ratchets, etc.) - How to value unquoted companies - How to structure a deal in a highly uncertain environment (types of equity, combination of (quasi) equity and debt (mezzanine) Understanding the difference between the corporate (strategic) and deal (financial) perspectives Buyouts - Review of types of buyouts - Management buyouts (MBOs) - Management buy-ins (MBIs) - Leveraged buyouts (LBOs) - Evaluating a buyout candidate - Financing a buyout candidate - Key practical issues Case studies: Evaluating a buyout target and assessing buyout financing as the most appropriate option Private equity - Key issues and priorities: - Creating a funding structure - Valuation - Due diligence - Negotiation - Legal issues and documentation Day 5 Value Based Management: Understand strategy and interpret financial information Managing for value and Value Based Management (VBM) - Definition and principles - Managing for both short-term profit and long-term value - Link between managing for value and operational plans - Value shifts and conglomerate discount - Examples, including 'parenting' of strategic business units - Consolidated versus business perspective - sum of the parts analysis - How to use the corporate valuation toolkit to value strategic business units - Deriving the strategic business unit cost of capital and the use of competitive analysis to establish required information - Managing business units to grow value - Importance of value perspective - Importance of relative valuation - Link with merger and acquisition analysis Case study: Excel based case study requiring: Calculation of the strategic business unit cost of capital Calculation of strategic business unit value Re-evaluation of the whole company comprising 4 different business units International Finance: Making corporate financial decisions in an international context Hedging risks - foreign exchange and currency International (financial) risk assessment Cross-border valuation - methodologies - 'strong' currency denominated - local currency and international fisher effect Course summary and close