Investment Banking: Valuation| Financial Modeling| Pitchbook

Explore valuation methods in investment banking, contrast absolute versus relative approaches, and summarize how intrinsic value arises from fundamentals, cash flows, dividends, and growth via DCF and dividend discount model.

Explore absolute valuation methodologies, including the discounted dividend model and asset-based methods, and contrast liquidation value with going-concern value to determine a company's intrinsic value.

Explore relative valuation using comps and comparable transactions, guided by the law of one price. Learn to apply multiples and enterprise value benchmarks to assess relative worth.

Learn the discounted cash flow method by projecting a company’s free cash flow and discounting it to value. Assess DCF against market price and its risks as a valuation benchmark.

Project cash flows for a finite horizon, apply a terminal value with perpetual growth, and discount the total value to present value using the discount rate.

Examine intrinsic valuation using discounted cash flow, including two- and three-stage growth models, and contrast firm valuation with equity valuation using weighted average cost of capital or cost of equity.

Explain how equity value and enterprise value relate in dcf, and compare fcfe versus fcff under consistent assumptions, using wacc and cost of equity.

Explore the accounting equation where assets equal liabilities plus equity. See how purchases, inventory, revenues, cash, and accounts receivable affect assets, liabilities, and retained earnings to keep the balance.

Discover how DCF yields intrinsic value from cash flows, explains enterprise value and equity value, and enables sensitivity tables and customization for valuation.

Compare discounted cash flow and comps to value a company, highlighting dcf's intrinsic valuation, theoretical soundness, and ability to incorporate synergies, while noting its sensitivity to assumptions and data quality.

This lecture outlines steps of a discounted cash flow analysis, guiding you to estimate cash flows, growth, and terminal value, and derive enterprise and equity value.

Explore how discounting cash flows determines company value in a DCF framework, linking higher cash flows and lower discount rates to higher value, and introducing terminal value for perpetual growth.

Learn to derive equity value from enterprise value by subtracting net debt and adjusting for cash, depreciation and other non-cash expenses, after-tax interest, and capex with the appropriate discount rate.

This lecture compares two methods to estimate free cash flow: forecasting cash flow growth versus building cash flow from revenue and net income components, advocating detailed micro-level modeling.

Learn to forecast cash flows in a DCF model by linking inputs, avoiding hard coding, and tracking depreciation and amortization, working capital changes, capital expenditures, and applying the tax rate.

Explore how to estimate terminal values in a DCF using the stable growth (Gordon) method, multiples, or liquidation value, with growth patterns and sensitivity to rates.

Learn to estimate the growth rate for the Gordon Growth method in a DCF, using retention ROE, GDP-based methods, or a risk-free rate, and set terminal value within GDP limits.

Build a discounted cash flow model by using terminal value equal to next year's free cash flow over the rate minus growth, then derive enterprise and equity value.

Calculate net debt from the latest 10-K using cash and cash equivalents, available for sale financial assets, and long-term and short-term debt, with convertible debt handling and quarterly data.

Learn to estimate the after-tax cost of debt within the weighted average cost of capital, using yield to maturity, tax shields, and rating-based spreads.

Learn to estimate the cost of debt without a rating using borrowing rates or a synthetic rating, then apply interest coverage and default spread for after-tax debt costs for WACC.

Understand beta as a measure of systematic risk and stock volatility relative to the market, and learn how business nature, operating leverage, and financial leverage drive beta.

Finalizing case study, this lecture derives enterprise and equity value per share via perpetuity and comps, accounts for diluted shares via treasury stock method, and performs sensitivity analysis for undervaluation.

Examine how to incorporate preferred stock and after-tax considerations in valuation, and compare DCF with other methods via football field analysis.

Answer common investment banking interview questions on cost of equity vs debt, walk through a DCF model, and explain dividend and share repurchase effects on cash flows.

Explore the module outline for the complete investment banking course, clarifying course expectations, essential valuation methods, and the role of basic accounting equations in investment analysis.

Gather data, select relevant multiples, and perform balance sheet analysis using DCF and relative valuation; display a football field to determine undervalued or overvalued stocks for long or short positions.

Learn to value assets by discounting future cash flows to present value and by using similar properties, while understanding enterprise value and equity value in balance sheets.

Learn how the accounting equation keeps assets equal liabilities plus equity through transactions, including accrual revenue and accounts receivable, in balance sheet concepts.

Explore enterprise value as the value of a company’s net operating assets, detailing adjustments for equity value, debt, pension obligations, capitalized leases, minority interest, and cash.

Learn to compute enterprise value and equity value, why add minority interest to EV, and how cash, marketable securities, and net debt shape the valuation.

Explore how assets equal liabilities plus equity and how enterprise value links equity and net debt through net operating assets in a simple, foundational case.

Explore valuation methodologies, including absolute valuation and discounted cash flow, to assess intrinsic value from cash flows and discount rates for undervalued stocks.

Apply discounted cash flow to value a company's enterprise and equity, considering net debt, assess intrinsic value against market price, and compare liquidation value and dividend discount models.

this lecture explains relative valuation through compatible comps and the law of one price, estimating a company's value from similar peers while noting limits when suitable comps are scarce.

Compare comparable comps with other valuation methods such as DCF to value a company, using data from annual reports or public sources, and adjust for current market conditions.

Explore the continued use of comparable company analysis (comps) in investment banking, detailing data gathering, valuation steps, growth assumptions, and limitations alongside public sources and case considerations.

Identify comparable companies, gather data from balance sheets, income statements, and cash flows, and adjust for differences to assess whether a company is undervalued.

Choose peers by evaluating qualitative and quantitative factors, ensuring peers operate in the same industry, geography, and revenue model, to establish a reliable valuation base.

Select peers with similar business and financial risk by matching industry, geography, customers, working capital, margins, growth, and cash conversion; cap at four to five peers for reliable benchmarking.

Explore how to choose the right multiples for company valuation, balancing enterprise and equity multiples, with apples-to-apples comparison and industry-specific considerations.

Explore how enterprise value equals market cap plus debt minus cash and liquid assets. Compare enterprise value multiples with equity multiples and understand their valuation implications.

Analyze industry-specific multiples for valuation using last twelve months data and quarterly reports; benchmark with average and median multiples and apply price-to-earnings and related metrics.

Gather data from annual and quarterly reports, align currencies, and convert with consistent exchange rates. Calculate basic and diluted shares using the treasury stock method to inform enterprise value.

Draw the comps sheet by consolidating analyses into an output sheet, linking data across sheets with the indirect function, ensuring consistent company names and local currency with 52-week high DCF.

Continue drawing the comps sheet by sourcing 2015/16 sales from data sources or annual reports, adjust for exchange rates, and note basic earnings per share and net debt.

Explore common interview questions on valuation methods—precedent transactions, comps, and dcf—explain enterprise value, minority interest, and why multiple choices matter in investment banking.

Learn discounted cash flow valuation by forecasting a company's future cash flows for eight to ten years and discounting them to present value with the weighted average cost of capital.

defines wacc and how raising capital in the equity-debt mix sets cost, then outlines free cash flow calculation, depreciation, and working capital in dcf.

Demonstrates estimating free cash flow by calculating revenues, costs, taxes, depreciation, and capex, and projecting growth for a dcf model.

Forecast ten years of free cash flow by including depreciation, capital expenditures, and working capital changes, then discount with weighted average cost of capital to determine present and terminal value.

Explore financial modeling as a tool to forecast a company’s financials using Excel, from simple formulas to complex models, covering income statements, cash flows, ratios, scenario analysis, and valuation insights.

Explore the framework of a financial model by predicting a company's future performance through its income statement, balance sheet, cash flow, and key drivers such as revenue.

Master basic Excel and basic accounting to build financial models, linking key drivers across income statement, cash flow, and balance sheet, and learn data handling and keyboard shortcuts.

Build a foundation in basic corporate finance and financial modeling; learn valuation techniques like discounted cash flow (dcf) and comparables, and craft an industry-aware, user-friendly Excel model for client use.

Learn to build easy-to-understand financial models that are well-presented and well-documented, with clear assumptions, color-coded visuals, and step-by-step pacing for complex case studies.

Define the financial model's end user, management, and analyst needs, tailoring assumptions and reasoning, with clear sensitivity analysis to support fast, objective decisions.

Analyze the macroeconomic environment guiding Siemens, focusing on energy and real estate segments, Germany's euro region context, and regulation shaping housing and office market trends.

Brexit lowers Germany's 2017 GDP forecast to 1.3% from 1.6%, due to weaker exports and investment. Siemens stays global as oil markets shift, with real estate looking strong.

Identify Siemens' sector as capital goods within the electrical engineering and electronics industry, emphasizing innovation, research and development, foreign trade, and reading annual reports to assess growth in emerging markets.

Siemens, an electrical engineering leader, posted about €75 billion in 2015 revenue, with 62% exports and 74% Europe, 19% Asia-Pacific, and 7% Americas; healthcare was carved out, digital factory leads.

Explore the accounting equation assets equals liabilities plus equity and the enterprise value concept, highlighting operating versus non-operating assets with balance sheet examples.

Master Excel formatting for a case study by applying custom formats for dates and currencies, using format painter and paste special, and enabling dynamic linking.

Populate the historical income statement and balance sheet by importing revenue and cost of sales from annual reports, align years correctly, and use sums with negative formatting for costs.

Develop Excel-based financial modeling skills, formatting negatives and using minus signs, to build income statements, balance sheets, and cash flow schedules with depreciation, stock-based compensation, and basic and diluted shares.

Predict and link segment revenues to project the income statement and reconcile to the consolidated figure. Analyze base case growth, scenario analysis, and drivers like mobility and wind power.

Compare Siemens revenue forecasts with Nomura equity research to validate assumptions, and build a driver-based income statement covering cost of sales, margins, R&D, and SG&A.

Build the working capital schedule by forecasting accounts receivable from sales, applying days sales outstanding, and forecasting inventory from cost of sales, aligning with equity research.

Learn to build a combined property, plant and equipment and intangible assets schedule, reconcile depreciation and amortization, and analyze cash flow and balance sheet implications for case studies.

Explore how intangible assets are analyzed within the cash flow statement by linking revenue, depreciation and amortization, and capex to understand asset changes.

Explore long term debt and related liabilities, construct a debt schedule, and project the balance sheet with either constant or revenue-driven assumptions.

Analyze long term debt dynamics by estimating borrowings, calculating interest expense from notes and bonds, and understanding paid-in-kind interest within the balance sheet and cash flow framework.

Explore the equity schedule by computing common stock, treasury stock, and retained earnings, applying stock-based compensation assumptions, dividend payouts, and projecting five years before finalizing the cash flow statement.

Explore building the cash flow statement from the balance sheet and income statement, using the indirect method to reconcile net income with operating cash flow and key working capital items.

Explore cash flow statements by linking operating, investing, and financing activities to changes in assets, liabilities, and equity, including goodwill adjustments and balance sheet reconciliation.

Calculate interest income from cash balances using the average beginning and end period cash and the cash interest rate. Explore mixed ratios and forecasting across years.

Calculate basic shares outstanding by analyzing equity schedule, including issued and repurchased shares, and convert issued capital to shares using the share price, with earnings per share driving the model.

Learn a practical trick to balance a financial model's balance sheet by using a change and check column, reconcile assets with cash flow, and fix common sign mistakes.

Learn to reconcile net property plant and equipment with gross additions, incorporate depreciation in the cash flow statement, and verify balance sheet accuracy while addressing circular references.

Analyze ratio analysis to assess solvency, liquidity, and profitability using current, quick, cash, and solvency ratios, cash conversion cycle, and days sales outstanding, days inventory outstanding, and days payable outstanding.

Learn how sensitivity tables in a financial model test revenue growth and gross profit margin impact on outputs, using Excel data tables and hardcoded inputs for best and worst cases.

Explore how sensitivity tables in Excel enable rapid scenario analysis, comparing automatic versus manual updates and illustrating single or two-driver inputs like revenue growth rate and EBITDA.

Explore scenario analysis in a financial model by linking base and best/worst case drivers, using match and offset functions, and applying conditional formatting to highlight outcomes.

Create an on-page index in Excel to navigate to income statement, balance sheet, and cash flow via named references and internal hyperlinks.

Develop robust financial models by using few sheets with an index, clearly presenting assumptions, linking inputs to outputs, and including executive summaries for first-time readers.

Master Excel best practices for investment banking models, avoiding data duplication and incorrect references. Build robust, transparent cash flows with balance sheet checks and thorough testing.

Identify common financial model mistakes, such as incorrect linking, sign errors, and circularity, and apply sense checks, proper hardcoding, and link verification across income statement, balance sheet, and cash flow.

Explore stock and bond valuation methods including dcf, comps, and binomial models; bond pricing; equity vs debt financing; accretion/dilution analysis and interview-ready deal insights.

Identify the three main pitch book types—sell-side buy-side, debt/ipo, and asset-management client presentations—and learn their distinct structures and content focuses. Explore how regional variations shape presentation styles and language use.

Explore investment banking pitchbooks, including combo and scenario analysis, management presentations, and client updates, and contrast bulge brackets with boutiques while emphasizing attention to detail, revisions, and fair valuations.

Explore Dell's going-private pitchbook, detailing the independent special committee's governance, the advisors, and a rigorous go-shop process to maximize shareholder value.

Dell outlines a cash-generating, global expansion strategy to grow margins and recurring revenue through organic and inorganic moves, while assessing competitive risks for New Dell.

Dell investors evaluate strategic alternatives—from enhanced capital distribution and buybacks to separation—assessing risks, financing, and value creation, concluding an all-cash $13.65 billion offer is most attractive.

Explore how Catalyst Partners builds an autonomy pitch book, detailing headquarters, customers, revenue mix, data management market dynamics, and the IDOL probabilistic engine for competitive positioning.

Analyze strategic perspective and industry model in the Silverwood example, highlighting top video trends, deal environment, and valuation insights in media technology.

Explore Silverwood's private placement transactions as adviser, including series B and C financings, strategic investments, and sell-side analysis; learn to craft effective pitch books with PowerPoint.

Learn eight methods to craft a crisp, persuasive investment banking pitch book limited to 10-15 pages with clear messaging, executive summary, macro and company analysis, deal rationale, and key financials.

Learn to create a draft investment banking pitch book in PowerPoint, using a simple design, slide master, and a merger example with financials from annual reports and investor presentations.

Adopt partnership principles and highlights of combination to craft pitch books, selecting synergies and strategic slides for a leading Indian mobile operator.

Explore how mergers and acquisitions pursue rapid deleveraging and asset-driven value, and learn to build a pitchbook with key approvals, slide layouts, and an appendix.

Learn to build pitch books in investment banking by screening US soaps and detergents companies, creating strip profiles, and presenting brief, selective analyses to senior bankers for potential acquisitions.

Summarize a U.S. residential solar energy company's business, financials from SEC filings, ownership, governance, and latest news for a pitch book, including power purchase agreements.

Explore a company's financials by examining annual filings for the consolidated income statement, noting revenue, net income, operating loss, and non-controlling interests, plus depreciation and amortization in cash flows.