Creating value is the central task for any executive. To generate value, managers need to be able to assess the financial impact of their decisions, which in turn requires an understanding of financial analysis techniques and valuation methods. Financial Analysis and Valuation for Strategic Decision Making
will help you evaluate the financial consequences of business decisions and how to value companies, businesses, and projects.
Please note that this program requires a basic understanding of the following:
- Financial statements, including the balance sheet, income statement, and cash flow statement
- How accrual accounting differ from cash accounting, including revenue recognition (realization principle), expense recognition (matching principle), and asset and liability measurement (historical cost, selective fair value)
- Time value of money and present value calculations
These concepts, above, are covered in Columbia Business School Executive Education program Finance and Accounting for the Non-financial Executive. Participants will receive pre-course material that covers these concepts.Impact
By completing Financial Analysis and Valuation for Strategic Decision Making, you will gain an understanding of financial statement analysis, corporate finance, and valuation methods. You will learn how to use tools to evaluate the financial consequences of various operating, investing, and financing decisions. Specifically, you will be able to:
- See how business decisions and activities are reflected in financial statements
- Reformulate the financial statements to facilitate an informative analysis
- Analyze the reformulated financial statements
- Develop cash flow forecasts and pro forma financial statements
- Estimate the cost of capital
- Value companies, businesses, and investment projects
- Assess the value of mergers, acquisitions, and strategic alliances
- Understand how various strategic, operating and financing decisions and activities affect value
- Conduct scenario and sensitivity analyses
- Evaluate and manage business risks
Upon completion of this program, you will earn three days towards a Certificate with select alumni and tuition benefits.Curriculum
This three-day program is comprised of class lectures in which concepts will be developed and explained, with an emphasis on implementation. Participants will receive an excel workbook containing a valuation model and various financial analysis tools and use it to solve real-world exercises. The class notes, excel workbook and, most importantly, knowledge acquired in the program will provide participants with the tool kit needed for conducting financial analysis and valuation.
During this program, participants will explore the following topics:1) Basics of fundamental valuation
2) The discounted cash flow (DCF) model for equity valuation
- The value of any investment or asset (e.g., project, business, company, stock, bond) is the present value of the net cash flow that the asset is expected to generate or save
3) Relative valuation models
- Deriving the model
- Defining and measuring free cash flow
- Forecasting free cash flow
- Estimating WACC
- Terminal value
- From DCF value to value per share
- Scenario and sensitivity analyses
4) Implementing the framework
- Price multiples
- Conditional price multiples
- Valuing companies, businesses, and investment projects
- Assessing the value of mergers, acquisitions, and strategic alliances
- Analyzing the value implications of various strategic, operating and financing decisions
This course is designed for upper- and senior-level executives and other professionals interested in deepening their knowledge of financial analysis and valuation.
This is not an “entry level” program, so participants should have a basic understanding of financial analysis, including financial statements, balance sheets, income statements, cash flow statements, and accounting.
This program is ideal for executives in non-finance roles or in such departments as strategic planning, marketing, operations, product development, consulting, and sales who need a higher level of proficiency in understanding, evaluating, and making decisions based on the financial standing of their business unit, business, or organization.
It is also ideal for financial executives, financial analysts and portfolio managers.Admissions Qualifications
Successful candidates should have managerial experience and responsibilities matching a program’s “Who Should Attend” or “Participant Profile” description. All registrations are subject to approval by Columbia Business School.