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M2098 - Valuation deep dive workshop – Intermediate level – 2 sessions (Online)

  • 25 Nov 2020
  • 2 Dec 2020
  • 2 sessions
  • 25 Nov 2020, 10:00 14:30 (UTC+01:00)
  • 2 Dec 2020, 10:00 14:30 (UTC+01:00)
  • Online Webinar


Registration Time: 09.45
Sessions Time: 10:00 - 14:30 including 30 mins break
Speaker: Mr Michael Zarb
Venue: Online Webinar
Participation Fees (The Institute is now accepting payments via Paypal)
MIA Members: €100.00
Non-MIA Members: €190.00
Retired Members: €40.00
Students: €70.00

Intermediate valuation deep dive workshop 1: Introduction to discounted cash flow analysis

Short Synopsis

Valuation is an essential tool employed by accountants and finance professionals for financial reporting, capital budgeting or investment appraisals purposes. Over two workshops this course will provide an intermediate-level deep dive into established business valuation approaches with a primary objective of building confidence in applying these techniques and understanding the reasonableness of the assumptions that underpin them. This first workshop will introduce the discounted cash flow technique and focus on the key steps for developing financial projections that are consistent with valuation principles.
The workshop will conclude by introducing the main building blocks of an appropriate discount rate.

Objectives of the Session

The first workshop will focus on building a working knowledge of the discounted cash flow technique. It will introduce you to the concepts of the net present value (NPV), review alternative discounted cash flow models, examine the components of free cash flow and the concept of terminal value, and discuss practical expedients to developing a complete discounted cash flow model.

The session will end by introducing the typical building blocks of a discount rate.

Topics of the agenda

- Basis of value
- The concept of net present value and discounted cash flows
- “Free Cash Flows to the Firm”, and its components, and practical expedients for developing a consistent set of underlying assumptions
- The terminal value and its components
- The weighted average cost of capital methodology.
- The Capital Asset Pricing model

Target audience

- Auditors and accounting professionals
- CEOs, CFOs and other employees who may need to source or review valuation reports
- Asset managers and investment advisors

Structure of the Session

1) Overview of the basis of value
2) Common area of application of the valuation techniques: the use of the DCF model in capital budgeting, financial reporting and investment appraisal
3) The present value concept:
a. Time value of money
b. Risk and Reward in finance
c. IRR as all-in risk-adjusted discount rate
4) Present value technique used in business/asset valuation: the DCF model
5) Building a DCF Model:
a. Free cash Flows to the Firm and its components
b. Marginal vs Effective Tax
c. The impact of the tax shield on interest costs
d. The use of NOPLAT
e. Working capital movements
f. Capital expenditure and the return on capital
g. The components of the terminal value, steady state assumptions and estimating the reinvestment rate
6) Estimating the discount rate
a. Weighted average cost of capital
b. Capital asset pricing model
c. Understanding a firm’s Optimal capital structure
d. Practical expedients and information sources to estimate the discount rate

Intermediate valuation deep dive workshop 2:  Value enhancement through DCF and alternative valuation methodologies


The flexibility and robustness of the DCF model places it among one of the most widely used valuation methodologies in the field. However, each business has specific features that need to be considered when applying the DCF and estimating the discount rate. Building on the first workshop, this session will expand on additional risk factors which should be considered when using the DCF valuation methodology. The session will also tie up other loose ends, such as consolidations, joint ventures, and share based options. We will conclude on the DCF model by examining the key value drivers in a DCF model and how these drivers may act as insightful indicators of areas for improvement within our businesses.

The session will then proceed to introduce market based approaches to company valuation (or “pricing”). Various common types of valuation multiples will be examined and linked to the discounted cash flows technique in order to better study the underlying assumptions that are inherent in their use. We will discuss different methods of application, including statistical approaches, and highlight common pitfalls associated with their use.

Objectives of the Session

The workshop will pick up from the outcome of workshop 1 by concluding on the DCF model by;
a) Discussing the modified capital asset pricing model and associated adjustments to the discount rate that need to be considered in different situations;
b) Addressing some loose ends relating to potential complications and specific scenarios;
c) Examining the key value drivers of a DCF model and in order to allow for a better final review of a DCF valuation model.

The workshop will then go on to fully present market based approaches towards pricing assets, highlighting the underlying link to the discounted cash flow model and the inherent assumptions underlying the use of market multiples.

Topics on the Agenda:

- Modified capital asset pricing model.
- Loose ends in a valuation; dealing with other claims to equity and complicated corporate structures.
- reviewing the key value drivers of a DCF model
- Complete review of market multiples and the recent transaction method

Target Audience

- Auditors and accounting professionals
- CEOs, CFOs and other employees who may need to source or review valuation reports
- Asset managers and investment advisors

Structure of the Session

1) WACC Methodology – brief recap

2) Modified CAPM
a. Small firm premium
b. Country risk premium
c. Company specific risk premium

3) Projection risk

4) Value enhancement framework
a. DuPont Analysis
b. Reinvestment rate, return on capital and expected growth rate
c. Cash conversion cycle
d. Optimal capital structure

5) Introduction to market approach
a. Valid formats of a multiple
b. Linking DCF to a multiple - understanding implied assumptions
c. Understanding the different sources of data for market approach
d. Pro vs Cons of multiples-based approach, and how different application methods can mitigate some disadvantages

Speaker's Profile

Michael Zarb is a Senior Manager at Deloitte, specialising in valuation work and debt advisory. He is a qualified accountant and corporate finance professional with 12 years of experience. Throughout his career Michael has led various valuation assignments, ranging from valuing tangible and intangible assets for corporate reporting requirements, to valuing investments and derivatives for assisting funds produce regular NAV updates, or to assist in strategic decision making and investment appraisal, M&A activity and for tax purposes. Michael is a Chartered Accountant (ICAEW) and holds a BA (hons) from the University of Leicester and an MSc from the London School of Economics.


8 Hours Core


Terms and conditions apply


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