[PDF] Module 1: Corporate Valuation & Financial Modeling - Econ UG Blog

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The Edge Corporation - Investment Banking Boot Camp - Corporate Valuation & Financial Modeling Module Curriculum

© 2012 The Edge Corporation. All Rights Reserved 1

The Edge Corporation™

2012 Investment Banking Boot Camp

Module 1: Corporate Valuation & Financial Modeling

October 27, 28 & November 3, 4

InvestmentBankingBootCampOverview:

TheEdgeCorporation'sInvestmentBankingBootCampseriesisanintensive,modulartrainingprogramdesigned toprovideindividualswithakeeninterestinpursuingcareersinfinance(IB,VC,PE,corporationfinance)withthe sametypeoftrainingandinstructiongiventoWallStreetinvestmentbankinganalystsandassociatesduringthe summertrainingprogramspriortostartofthefirstyearonthejob.Throughanumberofdifferentmodules(each runasaseparateworkshop),bootcampparticipantswilllearnthecoreskillsandsubjectmaterialnecessaryto performthedutiesofanIBanalyst(e.g.,corporatevaluation,financialmodeling,

M&Atransactionprocessingand

analysis,aswellaspreparationofpitchbooksandpresentations,informationmemoranda,andotherrelated tasks.).TheIBBootCamp,however,willnotbeofvaluejusttothoseseekingcareersinfinance,astheskillsand subjectmatterarehighlyrelevanttoanyoneseekingacareerinotherbusinessfields,suchasconsulting, accounting,andmarketing,operationsandmanagement.

IBBootCampCurriculum-'CorporateValuation

&FinancialModelingModule'CoreObjectives:

ReviewofcorporatefinanceandfinancialaccountingtopicsrelevanttoIBtransactionsandanalystresponsibilities,with

specialemphasisoncorporatevaluation(Conceptscovered:DCFmethodology,costofcapital,structureoffinancial

statements,workingcapital,cashflowcalculationandprojections,etc.)

IntroductiontofinancialmodelingusingMSͲExcel,includingconstructionoftheoperatingmodel,financialprojections

and valuationanalysis

Corporatevaluationtechniquesandbestpractices,withspecialemphasisonconstructionoftheDCFvaluationmodeland

comparablesanalysis TheEdgeCorpIBBootCamp,willdiffer,however,fromtheIBtrainingprogramsbyitscaseͲdrivenapproach, wherebyinstructionwillrevolvearoundatransactioninvolvingrealcompanies,aswellasitsexpandedcurriculum, whichwillincludeindustryandcompanyanalysisframeworksandmethodsthatareemployedbyconsultantsat leadingstrategicconsultingfirms.Inaddition,programparticipantswillbegiveninsightsonhowtoexcelinthe qualityoftheirworkproductandperformanceasIBanalystsorfinanceprofessionals,andtherebygaintheedge overtheirpeersstartingfromthejob/internshiprecruitmentprocessallthewaythroughjob performancereview andcareeradvancement. Lastly,thebootcampwillalsoincludepreparatorytrainingforthosewithlittlepriorknowledgeofaccounting, financeandExcel/modeling. October/November2012CorporateValuation&FinancialModelingModuleͲProgramOverview: Date:WeekendsofOctober27Ͳ28andNovember3Ͳ4(4sessionsheldonSaturdays&Sundays) Time:Saturdaysessions-9amto1pm;Sundaysession-2pmto6pm

Location:UCLAcampus(roomTBD)

Participantsmustbring:Laptop(withpowercord)andMicrosoftExcelinstalled

RegistrationDeadline:

Wednesday,October24(*Monday,October15deadlineforearlyͲregistrationrates) Note:seatslimitedduetocapon#participantsperworkshopͲregistrationsprocessedonafirstcome,first servedbasis. Formoreinformationontheprogramandregistrationcontact:info@edgecorp.com

The Edge Corporation - Investment Banking Boot Camp - Corporate Valuation & Financial Modeling Module Curriculum

© 2012 The Edge Corporation. All Rights Reserved 2 EdgeCorpIBBootCampͲCorporateValuation&FinancialModelingModuleCurriculum: [Actualcontentssubjecttochangebasedoninstructordiscretion] Part1-OverviewofCoreFinancialAccounting&CorporateFinanceConceptsforModeling&Valuation/ExcelͲ

Modeling101

Reviewoffundamentalconceptsinfinancialaccounting,corporatefinancenecessaryforfinancialmodelingand forecasting,andcorporatevaluation.WillalsoincludeandintroductiontoExcelforfinancialmodelingandthe fundamentalsoffinancialmodeling. Businessfoundationsandkeyterminology BasicGAAPAccountingfundamentals o Financialstatements-structureand relationship o Basicfinancialstatementanalysis CorporateFinancefundamentals o Timevalueofmoney/DCFo Costofcapital/WACC o CAPM o Cashflows(FCFs)andcorporatevalue o IRRs, NPV Excelbasics(introduction,setͲup,shortcuts) FinancialmodelingͲfundamentalrulesand guidelinesandbestpractices Part2-FinancialModeling&ForecastingPartI-ModelingGuidelinesandConstructingtheOperating

Assumptions/IncomeStatement

Valuation-PartIIofValuationandfinancialmodeling-willcompletefinancialmodelandtriangulateavalue usingthetrans/tradingcompanalysisandDCFfinancialmodel.Alsodiscussspecialtopicsinvaluationandpitfalls andtroubleshooting/qualityͲproofingthefinancialmodel. Reviewoffinancialmodelingguidelinesandbest practices BuildingtheOperatingAssumptionsandIncome

Statement

o OverviewoftheDCFvaluationmodel structureo Layingoutthefinancialstatement sheets o Buildingtherevenueandcostdrivers sheets Incomestatementdrivers [Revenuedrivers,COGS,SG&A, etc.] Part3-FinancialModeling&ForecastingPartII-Understanding/ModelingBalanceSheet(includingCapital

Structure)andCashFlows

ContinuationofDCFvaluationfinancialmodelfrompriorweek,focusingontheBalanceSheet BuildingtheBalanceSheet Balancesheetdrivers[A/R,

A/P,Currentassetsand

liabilities,etc.] o ModelingPP&EandCAPEXͲ

DepreciationBuildinginthevaluation

sheet Capitalstructureconsiderations o Sourcesoffinancingforanacquisition (equity,cash,debt) o Costofcapital/WACC Costofequity (CAPM, levered/unleveredbetas,etc.) Costofdebt Modelingofotherbalancesheetlineitemso Debt o Dividends o Goodwill o TaxesandNOLs,etc. ConstructingtheStatementofCashFlows(and theunderlyingrelationshipbetweentheIncome

StatementandBalanceSheet)

Specialaccounting/modeling topics: o PP&E,CAPEXanddepreciation o Debtamortizationschedules o Shareholders'equityand dividends/retainedearnings o Goodwill o Deferredtaxes o Options

The Edge Corporation - Investment Banking Boot Camp - Corporate Valuation & Financial Modeling Module Curriculum

© 2012 The Edge Corporation. All Rights Reserved 3 Part4-Valuation/FinancialModelingPartIII-Valuation,RatioandotherAnalyses InterconnectionofoperatingmodelpreparedoverpriortwosessionstoaDCFvaluationanalysis.Willexamine

acquisitionfinancingstructuresandimplicationsforcostofcapitalandtransactionaccretionͲdilution.Alsoanalyze

financial,leverageandotherratiosaswellasotheranalysesimportanttoanM&Atransaction(e.g.,NWC). Tyingitalltogether-theValuationandReturns analysissheet o DCFValuationsheet o Returnsanalysisandsensitivitytables Qualitycontrolandtroubleshootingfinancial models o Circularreferences/shortcircuiting o Formattingo Unbalancedbalancesheets o Sanitychecks(cashflows,NWC,growth andmarginsvs. industry,etc.) ModelingotherAnalyses: o Financialratios(profitability,leverage) o Balancesheetanalysis IBRecruiting(TimePermitting)ͲBreakingintotheIndustryandSuccessontheJob Timepermitting,sometimewillbespentattheendoftheworkshoptocovergeneralquestionsaboutcareersin finance,withaspecialemphasisontheIBAnalystcareerpath.ReviewoftheIBrecruitingprocessandwaysto maximizethechancesofsuccessfullylandingandinterviewthroughadequatepreparation, optimized resumes/coverletters,propercourseworkandinternships,interviewprep,etc.OverviewofIBanalystperformance reviewcriteriaandtipsforexcellingasanIBanalystabovepeers.Updatedresumes/coverlettersandformal businessattireforthissessionrequired.Mockinterviewswillbeconducted. CareersinIB/Finance o TheIBanalysttrack(length, compensation,lifestyle,etc.) o PostIBcareers LandinganIBinternship/job o Recommendedcourseworkand internships o Craftingtheresume/coverletter TheIB/financeInterview o OverviewofthestandardonͲcampusIB recruitingprocess o Behavioralinterviewquestionso Technicalinterviewquestions (financial/accounting,market,brain teasers) o Etiquette(properdress,interview behavioranddosͲdon'ts) SuccessontheJobͲKeyAnalystPerformance

Metrics

o Performancereviews/qualitiesͲcriteria forratings o Tipsforgaininganedgeoveryour peersandcoͲworkers

The Edge Corporation - Investment Banking Boot Camp - Corporate Valuation & Financial Modeling Module Curriculum

© 2012 The Edge Corporation. All Rights Reserved 4

LeadInstructor:

Jason Lee

ProfessionalCareer:

OaktreeCapitalManagement(PrivateEquitygroup),SeniorVicePresident UCLAAndersonSchoolofManagement,FinanceFacultyMember TheEdgeCorporation,CoͲFounder AscendInternational,FoundingPartner(Boutiquestrategicconsultingfirmformedia/entertainmentand

ITindustries)

Intersphere,Founder(Internationalbusinesstranslationfirm) Youbet [Nasdaq:UBET],DirectorofInternationalBusinessDevelopment&CorporateStrategy AmerixGroup,Inc.,ChiefFinancialOfficer(Internationalsemiconductordistributioncompany) JPMorgan,InvestmentBanking-Tech/Media/TelecomGroup 15yearsofcorporatefinance,investmentbanking,VC/PE,strategicconsulting&entrepreneurship experience

Education:

UCBerkeleyͲBS,BusinessAdministration UCLAAndersonSchool-MBA