Financial Modeling and Valuation Course

Lesson 1 • Reading Financial Statements

Decode income statements, balance sheets, and cash flow statements as interconnected data sources. Accurate model inputs depend on correct statement interpretation.

Lesson 2 • Model Architecture and Design

Structure a model with separate input, calculation, and output sections. Good architecture makes models transparent, scalable, and easy to audit.

Lesson 3 • Core Accounting Concepts for Modelers

Apply accrual accounting, depreciation methods, and working capital mechanics to model inputs. These concepts drive the accuracy of every projection built later.

Lesson 1 • Building the Cash Flow Statement

Derive operating, investing, and financing cash flows from the income statement and balance sheet. The cash flow statement validates model consistency and reveals liquidity.

Lesson 2 • Scenario and Sensitivity Toggles

Embed base, upside, and downside scenarios using dropdown toggles and offset functions. Scenario flexibility transforms a static model into a decision-support tool.

Lesson 3 • Projecting the Income Statement

Forecast revenue, COGS, and operating expenses using driver-based assumptions. Revenue projection methods set the foundation for all downstream financial outputs.

Lesson 4 • Balancing and Circular References

Resolve the revolver plug and manage interest expense circularity using iterative calculation. Mastering this step is essential before adding valuation outputs.

Lesson 1 • Terminal Value Methods

Estimate value beyond the explicit forecast period using perpetuity growth and exit multiple methods. Terminal value typically represents the majority of total DCF value.

Lesson 2 • Enterprise to Equity Value Bridge

Convert enterprise value to equity value per share by adjusting for net debt and diluted shares. This bridge connects the DCF output to a per-share price target.

Lesson 3 • Weighted Average Cost of Capital

Estimate the discount rate by blending cost of equity and after-tax cost of debt by capital structure weights. WACC anchors the entire DCF valuation output.

Lesson 4 • DCF Sensitivity and Scenario Analysis

Build two-variable data tables to test valuation across WACC and growth rate combinations. Sensitivity tables communicate valuation uncertainty to decision-makers.

Lesson 1 • Benchmarking and Statistical Analysis

Summarise peer multiples using mean, median, and quartile statistics to identify the target's positioning. Statistical context prevents over-reliance on any single data point.

Lesson 2 • Selecting the Comparable Universe

Screen for peers by business model, size, geography, and growth profile. Peer selection quality directly determines the reliability of the resulting valuation range.

Lesson 3 • Spreading Trading Multiples

Collect and standardise EV/EBITDA, EV/EBIT, and P/E multiples across the peer set. Consistent spreading methodology ensures apples-to-apples comparisons.

Lesson 1 • Sourcing and Screening Transactions

Identify relevant M&A deals using databases, press releases, and regulatory filings. Transaction relevance depends on industry, deal size, and time period proximity.

Lesson 2 • Deriving Valuation from Transactions

Apply transaction multiple ranges to the target's financials to produce an acquisition value estimate. This output anchors the high end of a valuation football field.

Lesson 3 • Calculating Transaction Multiples

Compute EV/EBITDA and EV/Revenue multiples using deal value and target financials at announcement. Accurate multiple calculation requires careful treatment of deal structure.

Lesson 1 • Debt Scheduling and Amortisation

Build a debt schedule tracking principal repayment, cash sweeps, and interest expense by tranche. Accurate debt modelling drives the equity return calculation at exit.

Lesson 2 • Exit Assumptions and Returns

Model exit at a target multiple and holding period to calculate IRR and cash-on-cash return. Return sensitivity to entry price and exit multiple guides deal pricing decisions.

Lesson 3 • Credit Metrics and Deal Feasibility

Evaluate leverage ratios, interest coverage, and debt capacity to assess deal creditworthiness. Lender constraints set the upper bound on debt financing and deal structure.

Lesson 4 • LBO Transaction Structure

Model the sources and uses of funds, including debt tranches and equity contribution. The capital structure at entry defines the risk-return profile of the entire deal.

Lesson 1 • Accretion and Dilution Analysis

Compare pro forma EPS to standalone acquirer EPS to determine deal impact on earnings. Accretion or dilution drives board and shareholder approval decisions.

Lesson 2 • Merger Model Architecture

Design the combined model with separate acquirer, target, and pro forma sections. Clear architecture prevents errors when integrating two distinct financial profiles.

Lesson 3 • Synergy Modelling

Quantify revenue synergies, cost savings, and one-time integration costs with phased timing. Synergy assumptions are the most scrutinised inputs in any merger analysis.

Lesson 4 • Contribution and Exchange Ratio Analysis

Assess relative value contribution of each party and implied exchange ratios across valuation methods. This analysis determines whether deal terms are fair to both sets of shareholders.

Lesson 1 • Sum-of-the-Parts Valuation

Value each business segment independently using the most appropriate method per segment. SOTP reveals hidden value in diversified companies that blended multiples obscure.

Lesson 2 • Capital Allocation and Returns Analysis

Evaluate ROIC, ROCE, and reinvestment rates to assess management's value creation track record. Capital efficiency metrics contextualise valuation multiples and growth assumptions.

Lesson 3 • Football Field and Valuation Synthesis

Compile DCF, trading comps, transaction comps, and LBO outputs into a single valuation summary. The football field chart communicates the full valuation range to stakeholders.

Lesson 4 • Investment Thesis and Recommendation

Synthesise financial analysis into a structured buy, hold, or sell recommendation with a price target. A compelling thesis connects quantitative outputs to qualitative business drivers.