Venue : Hotel at Jakarta Pusat
Contact email : futurumcorfinan@gmail.com
Presentation slides will be distributed in softcopy
Minimum participants = 10 persons
After the training, participants can still discuss about the training materials via email
2. Why This Training is Important to Know?
Participants that want to study Financial Modeling for Valuation purposes always go to the Financial
Modeling class in which they will be taught with the MS Excel techniques and formulas that they could use
in applying the Corporate Valuation Model. The most shown approach in building the Corporate
Valuation Model is Discounted Cash Flow, or known as DCF method.
There is no point to understand as to how to build an excellent Financial Modeling, yet the VALUE RESULT is
questionable.
Why we said this?
First, the forecasted Financial Statements, in many cases, are constructed using Plug Method, and later
discount the forecasted Free Cash Flow using one single Weighted Average Cost of Capital (WACC).
Second, the WACC used as a discount rate is shown to be independent from the Free Cash Flow. So it is
common to see the practitioners calculate a WACC separately and then use it independently from the
firm value.
Third, WACC as a discount rate that is used to obtain the present value of the forecasted Free Cash Flow
is in many cases, a single same rate during the forecast period.
THE USE OF ABOVE THREE IS INCORRECT!
VALUE RESULT WILL NOT BE CORRECT SINCE THEY ARE NOT CONSISTENT TO EACH OTHER
3. Yet Before We Go Further, You Need to
Understand Why as Internal Analysts,
You Have to Study Valuation
As a manager or internal analyst, you learn in your capital budgeting that the company needs to take all (and
only) positive- Net Present Value project, thus, it will maximize the firm value.
This will mean that a company which acts in the its shareholders’ interest should accept those investments which
increase the value of the shareholders’ equity in the company.
In order to do this, IT IS NECESSARY FOR YOU TO UNDERSTAND WHAT DETERMINES THE COMPANY SHARE’S VALUE.
Learning Financial Modeling is about Learning the Business Model and Strategy of the Company.
As the manager or internal analyst, you know that the business strategy is the outcome of the VALUATION ANALYSIS.
A strategy is chosen after determining whether that strategy WILL ADD VALUE to the company. The internal analyst
will help design strategies to maintain competitive advantage.
Which strategies adding value that should be chosen?
So it is about the value…
A valuation model not only tells you how to think about the value generation in the future, but it also tells you how
to ACCOUNT for the value generation.
A valuation model is really a model of pro forma accounting for the future.
Valuation is a matter of ACCOUNTING FOR VALUE.
This is WHY YOU NEED TO STUDY AND UNDERSTAND HOW VALUATION MODEL WORKS AND MORE IMPORTANT THAN
THAT, YOU SHOULD KNOW HOW TO BUILD A GOOD AND CORRECT VALUATION MODEL THAT WILL GIVE YOU
CORRECT AND CONSISTENT RESULTS AMONG ALL THOSE APPROACHES THAT ARE IN THE MARKET.
4. Be Careful to Introduce Perpetuity into Your
Valuation Model
Why we said this?
Introducing perpetuity in cash flows and
formula, though beautiful in mathematics,
well, this is where the analysts would like to
say implicitly: “Cash Flows I Just Don't Know"
or “Cash Flows: Anything Could Happen".
Using the examples of forecasting the free
cash flows into the perpetuity, explicitly, it
captures value in the long run.., well, as
Keynes, the British economist said, in the long
run, are all dead…..
One thing we need to remember that in
reality, there is no such thing called
“perpetuity”. We could see this from the
company life, which business is the subject of
the valuation. On average, the lifetime of
the companies in US has reduced to around
15 years!
5. We teach the Finance Techniques in Valuation
that you will not get in any university class, even
from your MBA class
6. Training Syllabus
We are going to show using Excel
examples:
Building a Financial Model
without Plugs and without
Circularity for Valuation
Purposes
Cost of Capital depends on
Free Cash Flow, so it means
the Weighted Average Cost of
Capital cannot be the same
during the forecast period
Three methods mostly used in
Discounted Cash Flow Approach :
Capital Cash Flow
Adjusted Present Value
Free Cash Flow to the Firm
Here we are going to show using
Excel examples how to use
consistent discount rate formulas
to make sure all those methods
above will give the same results
of value.
We are going to show that the
use of the same WACC during
the forecast period IS WRONG
7. Training Desktop
Date : please check it at “FUTURUM CORFINAN” website
Venue : Hotel at Jakarta Pusat
Notes :
Presentation slides will be distributed in .pdf file
Bring your laptop to the class with MS Office standard applications
Post-training discussions with the trainers via website about the training materials
Visit our website and training testimonials : google “Futurum Corfinan Training Testimonials”
Contact email : futurumcorfinan@gmail.com,
mputrawal@futurumcorfinan.com
sukarnen.suwanto@futurumcorfinan.com
8. Train Your Employees!
By now, we’ve probably all heard
the classic HR executives’ exchange
—
Colleague #1: “What if we pay to
train our people and they leave?”
Colleague #2: “Right, but what if we
DON’T train them and they NEVER
leave?!?”
We can all agree that the latter
scenario is worse.
