corporate-valuation-modeling-santo-domingo



Corporate Valuation and Modeling  

The Fundamentals and Foundation to Guide Better Decisions

12-14 March 2025 in Santo Domingo

We have designed this course for finance and accounting professionals, as well as analytically-inclined non-finance management executives, seeking greater perspective and an enhanced understanding of the underlying principles of corporate finance, and methodology and practices of corporate valuation. 

Attendees for this course will typically be working in following roles:

  • CFOs, Controllers, Finance Managers, and Financial Analysts.
  • General Managers and Business Development executives.
  • Management Consultants and Corporate Finance professionals.
  • Equity Research Analysts and Fund Managers.
  • Planning and Strategy professionals.
  • Corporate and Investment Bankers.
  • Make investment decisions that enhance business value.
  • Learn the principles and practices of capital structure decision-making.
  • Link strategic decision-making with value creation.
  • Tie your strategic decision-making to value creation.
  • Understand robust and widely-practiced valuation techniques.
  • Master and apply simple, tested, rules of thumb consistently.
  • Calculate discount rates in environments where data is elusive.
  • Apply financial analysis to project future company performance.
  • Build reliable cash flow based valuation models.
  • Gain unique insights offered by the Economic Value Added approach.
  • Learn how to critically analyze investment and financing proposals.
  • Be better equipped and prepared to negotiate acquisitions.
To make better business decisions, clear understanding of the forces driving the value of a project or a company is essential. Too many decision-makers rely on rudimentary rules of thumb. This leads to familiarity and organizational habit, rather than a robust economic rationale, driving their choices.

We will learn that the determinants of value are a company's ability to generate cash and the inherent timing of and risk to cash flow. We will weave a thorough understanding of how corporate financing decisions impact value, particularly in the context of the idiosyncrasies of emerging economies. Leveraging these insights, we develop and demonstrate a valuation methodology flexible enough to deal with a variety of business models. For privately-owned companies in emerging economies, particularly valuable is discussion of a comprehensive approach to calculating the cost of capital. We will also discuss commonly-used multiples to quickly value a business and will apply techniques to considerably improve efficacy of the multiples.

Throughout the course we explore how key strategic and financial decisions impact valuation. By design we begin with basic concepts, making the course accessible to analytically-inclined general management executives, and as we progress to completion, challenge attendees' enhanced understanding.

1. Valuation Principles

Gaining clarity on the underlying drivers of value.
Centrality of cost of capital.
How Present Value quantifies drivers of value.
Understanding, simplifying, and communicating the Net Present Value (NPV) rule.
How strategic competitive advantage drives cash flow.
The inherent risks in using IRR.
Constructing terminal values.

2. Making Multiples Robust

Conceptual knowledge underlying multiples.
Equity versus enterprise multiples.
Constructing and deconstructing multiples with fundamental data.
Improving their efficacy.

3. The Big Picture of DCF and Adjust Present Value (APV) Approaches

Three perspectives of corporate valuation.
Defining and measuring cash flow.
Matching cash flow with discount rates.
Why valuation of equity cash flow may be error prone.
How to best capture the effects of financing on valuation.
Adjusted Present Value (APV) approach to individually value business operations and financing effect.
Financing effects in the context of different tax structures.
Argument for disregarding financing effects in base valuation.

4. Capital Structure and Cost of Capital in Emerging Economies

Principles of capital structure.
Defining and measuring business risk.
Understanding what drives risk.
How capital structure impacts risk.
Framework for calculating cost of capital in emerging economies.
Estimating betas for private companies and business units.
Capturing leveraged risk in equity beta.
Measuring market risk premium.
Adjustments for risk by country.
Why using Unlevered Cost of Equity may be preferable to WACC.

5. Cash Flow Modeling

Building a financial statements-driven framework.
Forecasting future performance as financial ratios.
Issues in forecasting project cash flow.
Forecast horizon and choices in terminal values.
Sensitivity analysis.

6. Insights from Economic Value Added Approach

Equivalence of DCF and Economic Value Added valuation approaches.
Disaggregation of valuation into Current Business and Future Growth values.
Why this disaggregation is more insightful than terminal value weight in DCF.
Reversing the valuation into performance expectations, for business planning and target-setting.

7. Acquisition Valuation

Valuation and pricing framework for M&A.
Empirical evidence on pricing acquisitions.
How control "creates" value.
Adjusting acquisition valuation for control and illiquidity.
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