Overview The “Introduction to Financial Modeling” course is a composite of four courses, namely: Ratio Analysis Corporate Finance: First Course Credit Analysis Cash Flow Summary and Cash Flow Analysis Ratio Analysis covers the following topics: Identification and explanation of terminology used in Ratio Analysis Introduction to ratios- ratios for trend analysis, ratios for comparative analysis, [...]
Re-levering Beta When assessing the value of a company’s operations the free cash flows need to be discounted using the weighted average cost of capital (WACC). The weighted average cost of capital is calculated using the cost of equity and cost of debt weighting them by their respective proportions within the optimal or target capital [...]
Whether you deal with Angels, Venture Capital investors or your local banker as a small business owner you need to understand the documentation requirements of fund raising as well as the due diligence and pre-investment audit process. While the process is cumbersome and awkward the primary issue with small business owners is preparation, generating the [...]
In our previous post we covered the three basic inventory valuation models. We now illustrate a simple example of the average cost model in the table below: Bought Sold Average cost per unit May 5 units @ $20/unit $20 Jun 3 units costing $20 each Jul 10 units @ $18/unit [...]
Inventory valuation models and profitability In order to value inventory, there is a physical count of inventory that takes place at the end of the year which can be a tedious task. This is because even though a business may have an inventory where all the units are identical, the prices on these units could [...]
Corporate Finance Master Case: Corporate Finance: LLC or C-Corp Master Case: Corporate Finance: Limited Liability or C-Corp Master Case: Office Depot: Ratio Analysis Learning Corporate Finance – course guide Master Case: Electronic Arts (EA): Corporate Finance: Session IV The first course in Corporate Finance – Session Zero Session I – B: Corporate Finance: Financial Statements [...]
The top 5 most active courses in October on the Learning Corporate Finance site so far: Top 10 MBA: 15 months as a MBA student at Columbia Business School Accounting Crash Course Corporate Finance: First Course Computational Finance: Building Monte Carlo (MC) Simulators in Excel Master Class: Ratio Analysis Master Class: Calculating Value at Risk [...]
Using Office Depot as an example the case walks through liquidity, leverage, productivity and profitability ratios in two separate iterations. This case is the first in a two part series that compares Office Depot with Staples using the principles of Ratio Analysis.
The first course in Corporate Finance starts with a basic introduction of notation and terminology and then introduced the concepts of Financial Statements, Time Value of Money, Risk and Return, Opportunity Cost, Cost of Capital, Weighted Average Cost of Capital and Return measures. It closes with a 38 page detailed case study on Electronic Arts that reviews the Electronic Arts (EA) balance sheet, profit and loss statements, shows how to project the EA statements in the future and arrive at a valuation of EA at that point in time.
Three methodologies are presented below for valuation of floating rate notes, term finance certificates, sukkuks and corproates each with a simple numerical example. These are:
Pricing using the bond pricing model which assumes that the outstanding principal will be redeemed with the coupon payment and scheduled redemption immediately prior to the following reset date.
Pricing using the forward pricing model which calculates the future floating rate coupons based on a derived forward rate curve.
