Our 3-day advanced corporate modeling course is designed for intermediate financial modelers looking to increase their skills with a particular focus on mergers, acquisitions, and leveraged buyouts. Participants will walk through the theory of types of mergers and acquisitions and then calculate how merger value is determined. Advanced debt techniques are taught in order to facilitate an understanding of leveraged buyouts. The course also goes through model auditing and fraud prevention, given how complex models can become.

Mergers and Acquisitions

I. Overview of Types of Mergers and Acquisitions

a. Hostile Takeover

b. Acquisition

c. Consolidation

d. Leveraged Boyout

II. Review of the Basic Corporate Model

Exercise: Determine Firm Value Using the Basic Corporate Model

III. Overview of Determining Merger Value

Exercise: Basic Value Determination Using Two Separate Models

IV. Implementing Merger Modeling on a Professional Level

Exercise: Setting up a Control Workbook for Merger Modeling

a. Understanding Synergy

Exercise: Determining Synergy Valuation for a Merger

b. Valuing Control

Exercise: Case Study Merger Modeling

c. Debt Capacity Increase from Mergers

d. Diversification Benefits

Exercise: A Look at Diversification Effects on Valuation

e. Tax Benefits

Exercise: A Look at Tax Benefits from Merger

f. Stock Price Effects Due to a Merger

Exercise: A Historical Look at Stock Price Change Due to Merger

g. Differences in Accounting for Mergers and Acquisitions

i. Pooling versus Purchase

Leveraged Buyout Modeling

I. Basics of a Leveraged Buyout

Exercise: A Leveraged Buyout Example

Advanced Debt Amortization

I. Quick Review of Debt Concepts and Components

a. Corporate Debt Concepts

i. Setting Up Bullet Paydown

ii. Payment-In-Kind (PIK) Debt

iii. Custom Debt Scheduling

Exercise: Debt Schedule Practice

b. Gearing and Debt Service Coverage Ratios (DSCR)

i. Theory and Calculations

ii. Optimizing Debt Based on Gearing or DSCR

1. Utilizing Goal Seek

2. Utilizing Solver

3. Calculation Setup for Both

Exercise: Debt Optimization with Various Constraints

c. Revolving Debt and Cash Sweeps

i. Paying Back Debt

ii. Mandatory Repayment Schedules

iii. Optimal Debt Repayment Mechanisms

Exercise: Debt Repayment and Use of Cash

Model Auditing, Validation and Fraud Prevention

I. Model Auditing and Validation: Technical Checks

a. Data Storage and Worksheets

b. Circular References

c. External Links

d. Formula Integrity

Exercise: Methods and Tools to Technically Check a Model

II. Model Auditing and Validation: Financial Checks

a. Assets,Liability and Equity Balance

b. Cash Movement

c. Financial Statement Connections

d. Sources versus Uses

i. Dividends

ii. Debt Repayment

Exercise: Methods and Tools to Financially Check a Model

III. Common Signs of Fraud in Models

a. Income Statement

i. Revenue Manipulation

1. Fictitious Revenue

2. Sales Timing

ii. Expense Manipulation

1. Moving Expense Periods

2. Hiding Loss

b. Balance Sheet

i. Asset Manipulation

1. Alternate Timing Methodologies

ii. Equity Manipulation

Advanced Charts

c. Creating Dynamic Charts

d. Pivot Charts

e. The SERIES Function

f. Using Sliders, Spinners, Option Button and other Forms to Control Charts

g. Mixing Chart Types

Exercise: Advanced Charting Techniques