Equity Valuation

City Training UK
Course summary
3.5 hours
500 - 750 GBP excl. VAT
Full time
London, Online courses
Professional Training

Course description

Equity Valuation

By the time they have completed this Equity Valuation course, participants will have a full understanding of how to value a corporate under different methodologies.

Participants will understand the main valuation methodologies based on the different industries. They will also learn how to perform all the key valuation methodologies on Excel including Discounted Cash Flows and trading multiples based on annual company reports and forecasts.

Suitability - Who should attend?

  • Financial analysts and associates in investment banks
  • Asset managers
  • Equity research
  • Strategy and Corporate Development professionals
  • All other interested Finance professionals

Training Course Content

Session 1

Valuation Fundamentals

The session lays the foundations to build a solid understanding of corporate valuation in the context of investment banking. The most common valuation methodologies are introduced, explaining the difference between a company's fundamental value, and how much an acquirer would pay for the business. The concepts of enterprise value and equity value are explained, using simple but rigorous exercises. Finally, the basics of multiple valuation and discounted cash flow valuation are introduced.

  • The importance of valuation in the investment banking industry
  • Fundamental vs. transaction value
  • Overview of the major valuation methods
    • - Trading comparables analysis
    • - Transaction comparables analysis
    • - Discounted cash flow analysis
    • - Net asset value
  • Enterprise vs. equity value
  • Book values vs. market values
  • Derivation of enterprise values using market values
  • Derivation of enterprise values using a fundamental valuation approach

Case study: Basic valuation of a food producer using different methodologies

Session 2    

Trading Comparables

The participant is introduced to preparing multiples using real company data and a case study including a range of international companies. We focus on how to select comparables, where to find data in published financials and equity research reports, how to clean the raw data, and how to document and check the output. The most commonly used multiples are explained and complexities such as normalizing for non-recurring expenses / income are also covered. The session ends with practical exercises on the application of multiple analysis to value a company.

  • Screening companies to identify a suitable comparable set
  • Calculating the company’s value
    • - Number of shares and value of share options
    • - Equity value
    • - Net debt calculations
    • - Minority interests and equity method investments
    • - Enterprise value
  • Calculating the earnings numbers
    • - Cleaning non-recurring items from earnings and resulting tax adjustment
    • - Calendarization issues
    • - Last-Twelve Months (LTM) analysis
  • Calculating a range of forward looking and historical earnings multiples
    • - Revenue
    • - EBITDA
    • - EBIT
    • - P / E
    • - P / E / G
    • - Industry-specific multiples
  • Calculating and using operating and credit ratios
  • Troubleshooting and checking the output
  • Applying the results

Case study: Calculation of key EV and equity multiples for a food manufacturer taking into account its associate and non-controlling interests position

Session 3

DCF Valuation

The participant learns how to build a discounted cash flow valuation model. The session starts with an overview of the valuation methodology, and the steps required in setting up a valuation model. We then focus on the calculation of free cash flow. A detailed ratio analysis is used to establish the reasonableness of the forecasts and to identify when the target company reaches steady state. We analyze the weighted average cost of capital, calculate terminal values, using both the exit multiple method and the perpetuity growth method. We discount the free cash flows to arrive at enterprise values and calculate the implied share price.

  • Calculating unlevered free cash flows
    • - Drivers of cash flow
    • - Ratio analysis
  • Weighted average cost of capital
    • - Optimal capital structure using peer analysis
    • - Establishing the company’s forward looking cost of debt
    • - Cost of equity: understanding the risk free rate, the equity risk premium and beta
    • - Unlevering and relevering the beta
    • - Calculating WACC for the case company
  • Calculating the terminal value
    • - Perpetuity growth (Gordon Growth model) method
    • - Exit multiple method
  • Building a discounting model
    • - Mid-year adjustments
  • Calculating enterprise and equity values
  • Sanity checks
    • - Reinvestment rate and ROIC
    • - Implied multiples and growth rates
    • - Percentage of value in the terminal period

Case study: Valuation of a multinational using a DCF model and comparison with current trading levels

Why choose City Training UK

100% specialised on Corporate Finance with more than 20 different topics

Hundreds of participants trained from heads of departments to recent graduates

10 specialised trainers at minimum VP-level in leading financial institutions

About provider

City Training UK

City Training is a highly-distinguished supplier of premium public courses, in-house training, and courses for universities and schools. The company focuses solely on financial training and covers the areas of financial accounting, corporate finance, valuation, credit analysis, regulatory capital, mergers and...

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Contact info

City Training UK

100 Pall Mall, Saint James
SW1Y 5NQ London

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Average rating 4.8

Based on 13 reviews

Highly recommended for anyone looking to improve their valuation skills. The training breaks down models into core, easy-to-understand components. The course was practical and tailored to our classes' ability.
Alex K. - Financial Analyst, investment bank
Good to have a broad overview of corporate valuation and modelling
Sandrine G. - Banking research team
The trainer is a very knowledgeable presenter with both technical and practical experience
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