Certificate

Public Investment Fund - Advanced Financial Modeling Program 2020

Issued to:	Harshit Krishna
Issued date:	September 14, 2020
Issued by:	AMT Training

DCF valuation

Participants learn 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. Once the valuation is complete participants perform several checks on the analysis using key ratios, and sensitivity and scenario analysis.

M&A analysis fundamentals

This session covers the basic steps of analyzing an acquisition - covering the impact of a deal on the financial statements with a particular focus on EPS, PE and contribution analysis. By the end of the session, the class builds an accretion / dilution model using EPS forecasts and acquisition assumptions, proforma leverage ratios and a proforma balance sheet.

M&A modeling

During this session, participants build a fully integrated merger model which combines financial statement forecasts for the acquirer and the target. Practical consolidation issues are addressed. The deal analysis focuses on the financing structure, pricing, earnings and credit impact and value creation.

LBO analysis fundamentals

Participants are introduced to the basic concepts underlying leveraged buyouts. The session starts by establishing why private equity firms can create value through leveraged buyouts and how the levered valuation fits into the valuation roadmap. Using a simple free cash flow forecast and targeted IRR, participants establish how much a financial buyer could pay for the target company. Participants then build a simple LBO model.

LBO short form modeling

The LBO short form model focuses on an operating forecast to drive a finessed debt structure using a cash sweep model.  The short form model concentrates on understanding the modeling and deal implications of the finance structure.