Module One
Financial Analysis, Modelling & Valuation
Summary
This module is a comprehensive foundation course in corporate financial analysis.
It can be customised for basic, intermediate, or advanced levels to align with the audience's existing knowledge base.
Target Audience
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Early-career buy-side or sell-side equity research analysts with 0-3 years of experience.
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An advanced section on financial manipulation and red flags is most relevant for experienced research analysts.
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This module can be tailored for M&A departments at investment banks, as well as Private Equity and Venture Capital firms.
Certificate
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This module is certified by the Chartered Institute for Securities & Investment (CISI) and endorsed as Continuous Professional Development.
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This module is certified by the Chartered Institute for Securities & Investment (CISI) and endorsed as Continuous Professional Development.
Course Format
Duration
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Minimum of 8 hours
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25 hours if delivered in greater depth
Delivery
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Video conferencing (Zoom, Webex)
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In person at our clients' offices
Region
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We are based in London, UK
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The module can be delivered globally
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We have delivered this course to professionals in the USA, France, Hong Kong and India
Class Size
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Typical class size is 10 participants (min of 3)
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For individual mentoring, please contact us directly
Training Mandate
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The program is typically offered to in-house research analysts as part of:
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Learning & Development schemes
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Graduate Training Programs, or
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Research Management initiatives.
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Customisation
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We tailor each session to be relevant, practical, and aligned with your investment research approach and learning & development goals.
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For each delivery, we will determine together the optimal format, including:
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The duration
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The relevant sections
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The depth of subjects
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The level of interaction with participants
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The delivery style (coaching or teaching)
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The amount of assessment and feedback to management
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Expected Results
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Participants can expect to gain a deeper understanding of:
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Building a company model with relevant forecasts
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Analysing and comparing a company's operational and financial performance against peers
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Valuing a company and interpreting market valuation
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Analysing potential financial manipulations and red flags
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Syllabus
Section 1
Industry Analysis
How to conduct a thorough and relevant industry analysis
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Top-down analysis, macro-environmental analysis
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End markets and supply chains
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Fragmentation vs. consolidation
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Key players, positioning and market share
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Industry life cycle, consolidation curve
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Key growth drivers
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Regulations
Section 3
Financial Analysis
How to appraise a company’s financial performance through long-term ratio analysis
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P&L analysis
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Cash flow analysis
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Balance sheet analysis
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Financial ratio analysis
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Returns and intensity ratios
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Solvency & liquidity ratios
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Activity ratios
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Section 5
Valuation Analysis
How to build an effective valuation analysis and build a target valuation
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Relative valuation analysis
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Valuation multiple tool kit
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Sector-specific comparables
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Sum-of-the-Parts analysis
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Intrinsic valuation analysis
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Discounted Cash Flow (DCF) model
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Competitive advantage period
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Section 7
Unit Economics
How to model revenue growth through unit economics
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What is unit economics?
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Unit economics by sector
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Telecoms
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Brick and mortar retail
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Ecommerce
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SaaS
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Manufacturing/mining
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Section 9
Earnings Adjustments
How to adjust companies' reported earnings
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Understanding a company's 'adjusted earnings'
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Key adjustments to reported numbers
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M&A-related adjustments
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Provisions and impairments
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Restructuring and one-off costs
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IFRS 16
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Stock-based compensation
Section 2
Business Analysis
How to analyse a business and assess the sustainability of its operational performance
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Company history
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Activities
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Positioning and competitive advantage
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Company growth and maturity cycle
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Threats, disruption and sustainability of market share
Section 4
Company Model
How to build a company model with meaningful earnings forecasts
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Introduction to company models
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Eleven key steps to building a company model
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Meaningful forecasting
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Detailed analysis of past performance
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Using market data
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Closely analysing management strategy
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Conversations with the company
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Section 6
M&A Model
How to model an M&A transaction and assess its value creation
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Global M&A context and trends
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Drivers of M&A
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Rationale of the deal
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Real management motivation
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Funding and integration risks
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Analysing the value creation of an M&A deal
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How to build an M&A model
Section 8
Rights Issue
How to model rights issue
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Routes to access public equity
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Rights issue dynamics and adjustments
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Rights issue modelling
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How the market reacts to capital increases
Section 10
Financial Manipulation
How to identify red flags in financial statements
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Most common motives
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IPO
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Secondary equity issuance
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High debt levels
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Reputation
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Stock-based compensation
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Management incentives
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Specialist Instructors
Dr. Levon Babalyan, CFA. Levon has more than 20 years of experience in investment research. After his doctorate in Economics/Finance on earnings management, he joined Kepler Cheuvreux as a sell-side equity research analyst. He then worked at RobecoSAM as Head of Research and covered the Consumer and Energy sectors. He is currently the MD at Amberd Capital.
"Earnings management and financial manipulation are different things, but both can lead to a false image of a company's real financial health."
Alok Katre, ACA, CFA. Alok worked as a sell-side equity research analyst for nearly 17 years at Societe Generale CIB, HSBC and an S&P affiliate, covering Capital Goods, Aerospace & Defense, and Building Materials. Before that he worked at Merrill Lynch India in investment banking. He is engaged as a Faculty of Finance at SCMHRD and currently runs a personal finance consulting practice.
"A DCF valuation is only truly useful if each input is carefully chosen and reflects the company's intrinsic cash generation potential and its sustainability."
Dr. Zafar Khan. Zafar has nearly 40 years of experience in equity research, including over 20 years at sell-side broker Societe Generale, where he was the Head of European Capital Goods and Head of Research. After becoming MD he developed the global Aerospace & Defence franchise. He has a PhD in computational Fluid Dynamics and an MBA from Bayes Business School.
"I looked at hundreds of M&A deals in my career. One often forgets to scrutinise management's real motivation, which materially affects value creation for shareholders."
Guy Norman. Guy has nearly 10 years of experience in buy-side equity research covering a broad range of industries including Tech, Resources and Financials, He worked at Standard Life and Border to Coast Pensions. He started his career at Accenture in London covering UK Telecoms. He holds a Bachelor of Arts in Philosophy from the University of Cambridge.
"When valuing a company, cyclicality is crucial. The relevance of a valuation multiple depends on capital intensity, growth, cash and book value reliability."
