Understanding company valuation is a key competitive advantage in M&A and is fundamental in corporate investment decision making. In this 3-day Valuation program we cover valuation from all aspects: from successful application of the Net Present Value Rule in capital budgeting to obtaining reasonable estimates of firm value in an M&A context using either the multiples or the discounted cash flow method. You will be exposed to several up-to-date valuation techniques and lots of practice in valuing projects and entire corporations. You will learn how to obtain reasonable cash flow estimates, how to estimate the “continuing value” used in company valuations, and how to estimate the cost of capital. We will discuss how financing affects value and what role it plays in valuations. Investments and M&A can also affect the company’s ESG rating. Time permitting, we will discuss the effect of a firm’s ESG rating and its sustainability investments on valuation. Furthermore, the effects of central banks’ policies on valuation may be included.
How you will benefit
- During this short period of time you will gain valuation skills that allow you to identify valuable investment opportunities, to estimate their value to the firm, and critically evaluate them.
- You will learn how firms are valued in financial markets and what drives their value. This allows you to better evaluate the value impact of any corporate decision that you are involved with.
- After the course you are able to participate in all aspects of your firm’s financial decision making.
‘The Value of Valuation | A View from the Classroom’ with professor Matti Suominen.
|Day 1||09:00 – 17:00|
|Day 2||09:00 – 17:00|
|Day 3||09:00 – 17:00|
One of the most important tasks of top management of companies is to make sound investment decisions when investing e.g. in new product lines or factories. We discuss:
- How to perform capital budgeting professionally
- How to assess whether and how much any given investment decision creates value to the shareholders
- The merits of several different methods to evaluate investments, including Internal Rate of Return (IRR)
Valuing Entire Companies
We first provide an overview of the most popular methods used in valuing entire companies. In particular, we will examine the multiples method and the enterprise free cash flow method (also commonly known as the WACC method). We will learn each method’s basic framework, and their pros and cons. In particular we:
- Focus on understanding the logic in how the financial market sets the market values for firms
- Apply the learning to several real valuation cases
- Emphasize methods to spot potential forecasting inconsistencies, such as excessively optimistic assumptions about profitability of new investments
- Discuss how to obtain an appropriate Weighted Average Cost of Capital (WACC)
Valuation Techniques: Cases
We practise valuation techniques again in connection with new cases, in particular we will:
- Learn more about the valuation techniques applied in mergers and acquisitions and leveraged buyouts
- Discuss the role of corporate governance in valuation
- Discuss company valuation and market forces, such as industry trends, barriers to entry, corporate strategies and financial market conditions
Valuation is designed for those who desire to obtain essential skills and knowledge about the theory and practice of financial valuation. The material covered is highly relevant for wide range of professionals – e.g. general managers and advisors as well as finance specialists – particularly those involved in capital budgeting decision-making. Bankers, consultants, lawyers and professionals in other fields can all enhance their professional knowledge with an understanding of the principles of valuation.
For those who wish to gain a deeper understanding of corporate finance or valuation methods, this program can be used as a stepping stone to other AIF courses.