In this short seminar we will give you a birds-eye view of an investment bank (IB) and map out the range of different roles it plays. In origination and markets IB’s linking businesses with the markets and investors that companies need to grow. They also provide hedging, risk management and access to money and FX markets. In M&A IBs advise on and arrange the sale of businesses. IB’s are both a ‘sell side’ client and a ‘buy side’: they often also have investment management businesses where they are consumers of debt and equity issued by their origination and markets divisions. So IBs are involved in the full cycle of investing.

How do investors and corporate financiers look at companies?

Lets take a tour of some different approaches and key metrics used by analysts in different industries, and discover the art of DCF. The aim of this session is to give you an overview of company valuation techniques. Valuation is a creative process requiring judgment and perspective. We will explore the practical problems of applying multiples and explain the necessary accounting adjustments. We'll discuss the difficulties in comparing companies directly, such as their growth profile and industry segmentation. Different industries have different bases for valuation. We'll also cover discounted cash flow valuation and how Private Equity investors approach companies.

Following on from their comparable company valuation in week 2, delegates will be introduced to discounted cashflow valuation. The second part of the case study will involve delegates in sensitising a Discounted Cashflow (DCF) model to value the main case study company.

Teams will present their valuation conclusions for the case study company, combining together the results of their DCF and comparable company analysis.

They will need to populate the DCF model with forecasted data—sales, profit margins, capital expenditure, and more—to arrive at a substantive valuation. The session will revolve around the articulation of their findings, with an emphasis on the rationale behind the numbers. Teams must identify and explain the primary factors influencing their valuation, from market size to competitive dynamics, and defend their conclusions.