Program Outline

I. Accounting for Financiers

Overview of key financial statements (income statement, balance sheet, and statement of cash flows) as well as MD&A and footnotes. Reading Form 10-K- Examine critical line items and footnotes, and discuss their impact on: operating cash flow (EBIT, EBITDA, capex, working capital, etc.), cash and debt, operating leases, restructuring charges, unusual items, NOLs, shares and options, etc.- Scrutinize the effect of common transactions on these line items including flow of funds through the financial statements.

A. Fundamental accounting principles
    1. Market vs. book value
    2. Cash vs. accrual
    3. Revenue recognition
    4. Capitalized vs. expensed
B. International vs. US GAAP
C. Understanding Forms 10k, 10q, and 8k (Tasty Baking Company)

II. Comparable Company Analysis

A. Discounted cash flow analysis
    1. Example of calculating WACC using live data
    2. CAPM including unlevering and relevering Beta
    3. Unlevered free cash flow
B. Comparable company (multiples) analysis
    1. Trading Comps and Transaction Comps
    2. Measures of profitability, efficiency, leverage and liquidity
    3. Components of enterprise value and EBITDA
    4. Multiples: P/E, Enterprise Value / EBITDA, EV / Revenue, etc.
    5. LTM calculation
    6. Using Football Fields to make financial decisions
C. Dealing with variations in how line items are reported in actual financial statements
    1. Unusual items
    2. Purchase accounting adjustments due to an acquisition
    3. Options and converts
    4. Minority interest and equity in earnings
    5. Other line items and footnotes affecting valuation

III. Financial Modeling: Forecasting Model Part I
Build from scratch a fully integrated transaction and valuation model with scenario analysis.

A. Application of Excel tips, tricks and shortcut keys integrated throughout the modeling
    1. Keystroke shortcuts and spreadsheet navigation (unplug your mouse)
    2. Formatting tricks: avoiding spacer columns, custom number formats, linked footnotes, etc
    3. Formulas: absolute/relative references, Goto and named ranges (including creating bookmarks), triggers
    4. Excel tools: data tables, conditional formatting, data validation, etc
    5. Error handling: avoiding and fixing circular references, formula auditing, and fixing #REF’d models
B. Flow of a model
C. Modeling
    1. Operating Assumptions
    2. Income Statement
    3. Working Capital Assumptions
    4. Balance Sheet
    5. Cash Flow Statement
    6. Debt Schedule

IV. Financial Modeling: Forecasting Model Part II

Finish building the transaction and valuation model with scenario analysis. Continued application of Excel tips, tricks and shortcut keys.

A. Modeling
    1. Detailed Operating Buildup
    2. Average Interest
    3. DCF with sensitivity analysis
    4. Operating Scenarios
    5. Transaction Scenarios
    6. Cover Page
B. Checking a Model

V. Leveraged Finance, LBO, and M & A Modeling

A. Qualitative Aspects
    1. Understanding Leverage
    2. Sources of Financing: Bank Debt (Revolver & Term Loan), High Yield Bonds / Bridge Loan, Mezzanine, Common Stock
    3. Covenants, Credit Statistics, Blended Returns, and other Capital Structure Concepts
    4. Transaction Structuring
    5. Identifying Attractive Targets
    6. The Deal Process
    7. Growth & Exit Strategies
    8. Stock vs. Asset Sale
    9. Purchase Accounting
B. Modeling
    1. LBO Mode
        a. Step up Depreciation and Amortization
        b. Generating Returns to Sponsors with and without Management promote
    2. M & A Accretion / Dilution