Company Valuation: Principles, Methods, Applications

Friday and Saturdays
9:00 am - 5:00 pm

Valuation is at the heart of almost all finance courses. Most business people that deal with securities and companies directly deal with valuation issues. Even traders who live or die by the profitability of their trades lean heavily on valuation. Given the attention that valuation has received in recent years with the number of companies that have gone bankrupt, this module is designed to provide participants with a survey of the most popular valuation methods, their uses and practical applications.

The module focuses on company valuation, starting with accounting-linked valuation methods, with specific emphasis on the concepts of “relative valuation” using multiples, their application as well as shortcomings. From there, it then examines the principles of “discounted cash flow” valuation, the intellectual foundation of most valuation methods, with detailed discussion on the concept of “cash flow” and how to adjust accounting numbers to arrive at usable “cash flow” estimates.

Successful completion of this module enables the participant to:

    1.    Appreciate the importance of understanding “firm value” and how
             it is determined;
    2.    Understand and apply “relative valuation” and
             “discounted cash flow” techniques;
    3.    Learn the mechanics of determining “free cash flows”;
    4.    Examine the risk factors that affect cash flows and construct the
              appropriate discount rate;
    5.    Assess corporate value through cash flow analysis;
    6.    Value an IPO (Initial Public Offering); and
    7.    Learn other firm valuation approaches and when to apply these
              techniques.

This module is highly recommended for investment bankers, business professionals and entrepreneurs, and other finance practitioners involved, one way or another, in valuing companies or dealing with issues related thereto. Those familiar with or have adequate working knowledge of business acquisitions, cost of capital, capital structure, dividend policy and capital budgeting as well as basic business statistics, specifically, regression and variance analyses, standard deviation, etc., will find this module most meaningful and beneficial.

The module, which employs lectures, interactive discussions, case studies and practical application exercises, covers the following areas:

• Accounting-linked valuation methods
• Discounted cash flow valuation
• “Cash flow” concept and estimation; adjustment of accounting numbers
• Construction of appropriate discount rates
• Review of cost of capital and weighted average cost of capital (WACC) estimation
• The use of “adjusted present value” method as an alternative valuation approach     
                 —  when leverage is significant
                 —  when there are interest subsidies
                 —  when costs of bankruptcy are significant
                 —  when a constant debt ratio cannot be met

is a consultant for ATR-KimEng for Private Equity / Infrastructure. His professional experience has been in major infrastructure projects throughout the Southeast Asian Region.