Financial modelling

This course will help delegates to build a simple internal financial model to help in understanding valuation and dialogue with the market. It will introduce participants to the necessary concepts and techniques in order to be able to adapt an internal budget or strategic plan for valuation purposes. Many sectors have particular methodologies used by the market and these will be reviewed, together with their challenges. This will be a hands-on course with practical aspects and model-building exercises, which can be taken away for future use. The workshop-style course assumes a working knowledge of financial statements and a very basic understanding of valuation techniques. It also assumes a basic level understanding of Microsoft Excel, and delegates will be expected to bring their own laptops.

What will I gain?

  • Understand  how to use excel efficiently - keyboard shortcuts and quick access toolbar
  • Comprehensive review of an integrated P&L, Balance Sheet and Cash Flow forecast
  • Review of  key forecast metrics, for example, PBT, EBITA, EPS,
  • Recognition of different  bases of the structure of Analyst
  • Discussion of financial ratios  to evaluate business performance
  • An overview of valuation methodologies, including DCF
  • Consolidate knowledge from the course, via a case study relating to a listed company

I enjoyed the course and found it to be a useful overview. The main challenge is that it's a topic with so much to cover but some useful practical elements covered in one day.

Course tutor: Geoffrey Collyer

Managing Director - Lavender Bank Partners

As a leading leisure sector analyst, Geof has charted, analysed and in some cases helped to reshape several leisure industries, and his extensive experience makes Geof perfectly placed to assess the corporate strategies of the good, the bad and the ugly that make up the constituents of the public and private markets. 

Geof has 38 years combined industry and investment banking experience and has spent the last 30 years in a Top 3 rated sector equity research team, working for Wood McKenzie, NatWest Markets, Banker’s Trust and Deutsche Bank, where he was MD of the Pan European Travel & Leisure Research Team. Having seen a variety of valuation methodologies come and go and come back into fashion again - and some new ones invented - Geof has developed a detailed understanding of how companies and managements should be viewed and rated, and how companies should deal with both the buy- and sell-side communities. 

During his city time, he has acted as corporate research broker to over 20 different Plcs, been involved in over 40 M&A transactions, and directly or indirectly, in over a dozen IPOs. Geof currently runs his own strategic consultancy business, Lavender Bank Partners.


Financial Modelling House Keeping

  • Using Excel efficiently – Keyboard shortcuts and customising the Quick Access Toolbar
  • Exercise: Reviewing model with deliberate design faults and suggesting corrections

The model starting point: An integrated set of P&L, Balance Sheet & Cash Flow forecasts

  • The starting point for any exercise in valuation modelling is putting together an integrated set of financial statements for at least 5 years. The course will outline what items need to be split out separately and help delegates understand:
    • The key forecast metrics that analysts look at such EBITDAR, EBITDA, EBITA, PBT, Net Income, Earnings Per Share, and Free Cash Flow.
    • The different bases on which analysts produce the forecasts, which underpin their valuation models (e.g. treatment of exceptional costs and other non-recurring items).
  • Exercise: Adjusting a reported income statement to an underlying basis

Analysis of Business Performance

  • At the heart of any forecasts are assumptions about the future financial performance of the business, which in turn will be based on analysis of its historic financial performance.
  • The course will discuss financial ratios as analytical tools that allow the user to evaluate the financial performance of a business

An overview of valuation methodologies: Absolute & Relative approaches to valuation

  • Particular methodologies have become standard market practice for certain industries.
  • Delegates can discuss their own experiences, and understand the pros & cons of alternative methodologies.
  • There are no completely wrong valuation methodologies, but several are misleading. You have to compare apples with apples.

Discounted Cash Flow

  • Some may refer to DCF as an absolute valuation methodology. There are no absolute valuation methodologies – they all include variables. Valuation is an art, not a science.
  • The constituents of an enterprise discounted free cash flow:
  • What is included what is not.
  • Choosing the most appropriate discount rate – working out your WACC.
  • Choosing an appropriate terminal growth rate.
  • Sense checking the numbers:
  • What does the cash flow tell us about predicted returns on capital?
  • Is this realistic relative to other valuation methodologies?
  • Exercise: DCF example

Relative Valuation approaches

  • An overview of possible relative valuation metrics to use (Sales based, cash flow based, profit based, asset based, enterprise value based, growth based, sum-of-the-parts based).
  • Why different companies trade at different multiples
  • Which relative valuation metrics are most appropriate for your business
  • What timeframe to look at for determining valuation
  • What reference points in terms of companies and indices to use in relative valuation
  • When to use asset based multiples
  • M&A valuation danger signals
  • Exercise: Using different relative valuation metrics to derive a target price.

Putting it all together: A case study

  • The case study is an opportunity to put all of the learnings of the course together in one practical exercise. The case study uses data relating to an actual listed company. Attendees will use the data supplied and the techniques used in the course to come up with a target valuation.

(Attendees will receive an information pack in advance containing the basic model to be used for the course, including historic P&L, Cash Flow and Balance Sheet statements).

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Course level

Advanced IR


Central London, TBC

CPD points


Course dates

28 September 2017
9.00am to 5.00pm

2 May 2018
9.00am to 5.00pm

30 October 2018
9.00am to 5.00pm

  • IR Society members (£419 + VAT)
  • IR Society Premium members (course allowance included in membership package)
  • Non-members - outside UK (£599)
Book now

What is Mifid II and how will it affect EU’s financial industry?… via @FT