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Course Syllabus

2024/2025

Financial Modeling and Investment Valuation

Type: Mago-Lego
Delivered by: International College of Economics and Finance
When: 3 module
Open to: students of one campus
Language: English
ECTS credits: 3

Course Syllabus

Full Syllabus

Abstract

Investment Management is a one-semester elective course designed for the first- or second-year students of the ICEF Master of Science program in Financial Economics. The course is taught in English. The course provides an overview and analysis of key valuation methods. The course is expected to help students to develop problem solving skills and apply numerical skills to the analysis of commercial problems by simplifying complex ideas in an accessible way. The course also explores the best practices of financial modeling according to the existent modeling guidelines. Students will learn how to build a financial model, how to create a correct system of financial statements and forecast the changes in firm’s future cash flows under different scenarios. Using practical cases, students will find out how to build financial models that are flexible, appropriate, structured and transparent and will learn how to conduct DCF and LBO valuation analysis and interpret valuation outputs to provide investment recommendation.
Learning Objectives

Learning Objectives

  • Teach how to build financial models applying methods for asset valuation
  • Explain pros and cons of each valuation method
  • Apply valuation methods in practice and provide investment recommendation
Expected Learning Outcomes

Expected Learning Outcomes

  • Be able to choose the valuation method.
  • Be able to calculate FCFE and FCFF.
  • Be able to interpret the multiples.
  • Be able to test the correspondence of a financial model to the financial modelling standards.
  • Be able to choose the inputs of a financial model.
  • Be able to develop the forecast part of the financial model.
  • Be able to audit a financial model and correct errors
  • Be able to derive Enterprise Value and Equity Value and interpret the valuation outputs
Course Contents

Course Contents

  • Financial modeling basics. Linking financial statements.
  • Financial statements projections. Free Cash Flow calculation. Discounted Cash Flow method.
  • Valuation methods. Enterprise Value to Equity Value bridge. Sensitivity analysis.
  • Comparable valuation basics. Multiples method. Valuation football field
  • Company valuation case.
  • LBO modeling. Investment returns analysis.
  • Valuation analysis and scenarios. Audit of the model. Investment recommendation.
  • Q&A session and Final Exam preparation.
Assessment Elements

Assessment Elements

  • non-blocking Home assignment 1
  • non-blocking Valuation negotiations (group case)
  • non-blocking Final exam
  • non-blocking Valuation case (group project)
  • non-blocking Home assignment 2
Interim Assessment

Interim Assessment

  • 2024/2025 3rd module
    0.4 * Final exam + 0.1 * Home assignment 1 + 0.1 * Home assignment 2 + 0.25 * Valuation case (group project) + 0.15 * Valuation negotiations (group case)
Bibliography

Bibliography

Recommended Core Bibliography

  • Financial modeling : with a section on Visual Basic for Applications, Benninga, S., 2000
  • Investment valuation : tools and techniques for determining the value of any asset, Damodaran, A., 2012

Recommended Additional Bibliography

  • Ian Beaman, Erwin Waldmann, & Peter Krueger. (2005). The impact of training in financial modelling principles on the incidence of spreadsheet errors. Accounting Education, (2), 199. https://doi.org/10.1080/0963928042000229699

Authors

  • Potashov Anatoliy Igorevich