Specialist LBO modelling course - 3 days - London

 Location: London (Central)

 Dates: 12.06.2012 - 14.06.2012  Duration: 3 Days  Price: 1,650.00 GBP

Training course module one: LBO modelling - building the core of a model

  • Planning assumptions
  • Obtaining source data
  • Coding inputs
  • Structuring assumptions and anticipating scenario analysis
  • Modelling and formatting best practice
  • Good model structure
  • Good model design
Modelling.  Delegates are introduced to a case study and a set of financial statements.  Participants use that to start creating their own model.
  • Starting to forecast the income statement
  • Starting to forecast the P&L from key assumptions
  • How far can we progress?
  • What’s stopping us from continuing?
  • Key drivers for modelling
  • Key ratios driving the forecast
  • Drivers on revenues
  • Drivers on costs
  • Sources of data
Modelling.  Delegates add to their model and forecast out the income statement as far as pre-tax earnings.
  • Modelling fixed assets
  • Forecasting assets
  • Key drivers on asset intensity
  • Capital expenditure
  • Depreciation
  • Forecasting depreciation
Modelling.  Delegates analyse and forecast fixed assets, depreciation and capital expenditure.
  • Completing the balance sheet
  • Key drivers for balance sheet items
  • Which creditors can we stretch, and by how much?
  • How quickly can we collect debtors?
  • Forecasting the balance sheet
  • Impacts on cash flow
  • Is growth good?
  • Linking to other statements
  • Balancing the balance sheet
Modelling.  Delegates use their model to forecast a balance sheet for the case study.
  • Modelling debt
  • Forecasting a simple debt schedule
  • Linking to other statements
  • Tools for resolving circularity
  • Setting debt paydown
  • Iterating
  • Forecasting a more complex debt structure
  • Modelling a debt waterfall
  • Using “max”, “min” and “if” functions to model a debt waterfall
Modelling.  Delegates forecast a debt pay-down schedule for their case study.

Course module two: getting to LBO cash flow, modelling a new deal

  • Cash flow
  • Modelling the cash flow statement
  • Key linkages to other statements
  • Presenting the cash flow statement
  • Forecasting cash flow to equity
  • Forecasting unlevered cash flow
  • The link to valuation
Modelling.  Using their model, delegates forecast levered and unlevered free cash flow.
  • Defining key outputs
  • What are the most important outputs?
  • How can they be presented clearly?
  • How can we put for example, anticipated sales, capital expenditure and working capital plans into context?
Modelling.  Delegates complete a new sheet within their model - something that contains key outputs and credit statistics and is quickly and easily readable.
  • Scenario analysis
  • What scenarios make the most sense?
  • What inputs should we be flexing?
  • How can we structure the model to run those scenarios easily?
  • What happens to our outputs as the business is stressed?
  • How can we best present the information?
Modelling.   Delegates develop a suite of scenarios for their model, setting the model up so that it contains a full record of scenarios and the user can switch very quickly between them.
  • Structuring a deal – sources & uses of funds
  • Introduction to the fundamental principles of deal structuring
  • Exploring “sources & uses” - a key learning concept for the course
  • Developing a “first cut” debt structure
  • Calculating refinancing needs
  • The role of working capital and extra cap ex requirements
  • Typical financing and transaction fees
  • Determining the equity gap
  • The impact of equity rollover
  • Concentrating on the key levers without getting bogged down in complex models
  • The impact on the model: calculating goodwill and the pro-forma balance sheet
Case study.  Delegates develop their own deal structure for a transaction conducted by the case business.

Module three - more advanced course topics: modelling LBO debt and equity structure

  • The link to valuation
  • Absolute vs. relative valuation techniques
  • Defining and refining firm value: enterprise vs. equity value
  • What is debt free cash free?  What’s the link to deal structure?
  • Relative valuation – typical valuation metrics
  • Which multiples should we use?
  • What are the pros and cons of different multiples?
Exercise.  Relative valuation of a bid target.
  • Determining debt capacity and structuring debt
  • Clear, simple and concise explanation of different debt instruments:
  • Senior debt
  • High-yield debt
  • Mezzanine
  • Payment-in-Kind
  • Understanding the nature of different financial instruments and risk profiles
  • Modelling waterfall structures
  • Estimating and optimising debt capacity
Modelling – debt structure.   Delegates develop a debt structure for the case study and start to flex the structure within given constraints.  How much debt could the business support?  How big a target could it contemplate acquiring?   What impact does changing the debt structure have on debt capacity?
  • Key considerations for debt holders - keeping finance providers happy
  • Typical covenant tests
  • Conditions of default
  • Covenant trends
  • Trends across different businesses
  • Typical tests employed by rating agencies
Exercise.  Delegates consider how S&P would rate debt in a real business.
  • Structuring equity
  • The nature of equity instruments used in buy out structures
  • The different risks and rewards accruing to different parties
  • Incentivising management
  • Key drivers for equity investors
  • The impact of loan stock & preference shares
  • The impact of mezzanine
  • Iterating to optimise rewards to key participants
Case study.  Delegates iterate with a “back of the envelope” deal structure to optimise returns.

Course categories:Conferences, Public Courses, Inhouse

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Price: 1,650.00 GBP
Location: London (Central)
Event date: 12.06.2012 - 14.06.2012
Event duration: 3 Days
Event time:

ADDITIONAL DATES

Event Date Duration Venue Price Credits Signup
Specialist LBO modelling course - 3 days - London 12.06.2012 3 Days London (Central) Country: gb 1,650.00

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