IMPACT

By completing Financial Analysis and Valuation for Strategic Decision Making, you will gain an understanding of financial statement analysis, corporate finance, and valuation methods. You will learn how to use tools to evaluate the financial consequences of various operating, investing, and financing decisions and activities, including:

• Investments: mergers and acquisitions (M&A), capital expenditures, investments in intellectual capital, leasing, and more
• Strategies: product differentiation, economies of scale, cost leadership, outsourcing, economies of scope, diversification, and more
• Working capital management: just in time inventory, credit terms, factoring receivables, operating credit, and more
• Financing: level and type of borrowings, share repurchases, dividend policy, and more

For each of the above activities, we will discuss the impact on the financial statements and on key financial ratios, the underlying dimensions such as performance and risk, and the implications for forecasting and valuation. For example, how are M&A activities reflected in financial statements? How do they affect key ratios such as profit margin and earnings per share? How do they affect expected cash flows, risk, and value?

Specifically, you will be able to:

• Understand the information provided by the financial statements and other disclosures as well as its limitations
• Reformulate the financial statements to facilitate an informative analysis
• Analyze the reformulated financial statements to evaluate the firm’s profitability, earnings quality, growth prospects, and risks
• Develop cash flow forecasts and pro forma financial statements
• Estimate the cost of capital
• Value companies, businesses, and investment projects
• Assess the value of mergers, acquisitions, and strategic alliances
• Analyze the impact of different business activities on the financial statements, key ratios and underlying dimensions, and value
• Conduct scenario and sensitivity analyses
• Evaluate and manage business risks

Upon completion of this program, you will earn three days towards a Certificate with select alumni and tuition benefits. Learn more.

PROGRAM STRUCTURE

This three-day program is comprised of class lectures in which concepts will be developed and explained, with an emphasis on implementation. Participants will receive excel workbooks containing valuation models and various financial analysis tools and use them to solve real-world exercises. The class notes, excel workbooks and, most importantly, knowledge acquired in the program will provide participants with the tool kit needed for conducting financial analysis and valuation.

During Financial Analysis and Valuation for Strategic Decision Making, participants will explore the following topics:

Financial reporting

• Primary financial statements
• Secondary financial statements
• The relationships among the different financial statements
• Other disclosures like notes, MD&A, risk factors, and market risk
• Underlying accounting concepts
• Limitations and distortions of the financial statements, and implications for financial analysis and valuation
• Summary of line-specific GAAP and differences relative to IFRS
• Earnings management

Ratio analysis

• Reformulated financial statements
• Profitability
• Earnings quality
• Growth prospects
• Risks and exposures

Relative valuation

• Basics of relative valuation
• Uses of relative valuation
• Linking price multiples to fundamentals
• Implementing relative valuation
• Conditional price multiples
• Time-series versus cross-sectional analysis

DCF valuation

• Basics of fundamental valuation
• The discounted cash flow (DCF) model for equity valuation
• Template for DCF valuation
• Forecasting Free Cash Flow (FCF)
• Steady-state ratios
• Weighted average cost of capital (WACC)
• Terminal value
• From DCF value to value per share
• Sensitivity and scenario analyses
• Implementing DCF: Examples, settings, and extensions

For a complete program schedule download the agenda.

PARTICIPANT PROFILE & TESTIMONIALS

Financial Analysis and Valuation for Strategic Decision Making is designed for upper- and senior-level executives and other professionals interested in deepening their knowledge of financial analysis and valuation. This is not an entry-level program. Participants should have a basic understanding of financial reporting and financial analysis, including financial statements, key accounting principles, and present value calculations.

This program is ideal for executives in financial roles as well as executives in such departments as strategic planning, marketing, operations, product development, consulting, and sales who need a higher level of proficiency in understanding, evaluating, and making decisions based on the financial standing of their business unit, business, or organization.

It is also ideal for financial executives, financial analysts and portfolio managers.

Alumni and up to four of their colleagues are eligible for a 25 percent tuition benefit for programs lasting up to seven days. More on the Alumni Tuition Benefit.

Typical Participant Mix

Hear from Past Participants:

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Upoma Dutta

Financial Analyst at HBO

“The program provided a solid set of tools and knowledge to help us value different business ventures and understand the different interactions of producing a financial analysis. I have definitely levered a lot of ground in just three days.”

Gurinder-Wadhwa.jpg

Dr. Gurinder Wadhwa

Dentist at Adirondack Oral & Maxillofacial Surgery

“A complex subject made simple in two Excel sheets. Excellent program! Knowledgeable teacher.”

Annette Montoto

Annette Montoto

President at Microfinanzas Puerto Rico

"Although I am an accountant, I have not worked in accounting for a significant period. The material and models presented were a review, an update, and a learning experience for high-level executives. An excellent group of professional executives participating made the program more exciting."

Financial Analysis and Valuation: Participant Testimonial “Ratio Evaluation”

Kelley Brown

Business Development Manager, Bechtel Power Corporation

Kelley Brown talks about how she’s applying her learnings on ratio evaluation from the Financial Analysis and Valuation program back at her job.

Jerry Hogge

Jerry Hogge

Deputy President, Leidos

"Financial Analysis and Valuation is an exceptional course for business executives, providing a perfect balance of key concepts and the practical application thereof. I highly recommend this program and Professor Nissim."

Omolara Akanji

Omolara Akanji

Independent Director, Sterling Bank PLC

"The essence of Financial Analysis and Valuation is that you'll walk away with a detailed understanding of the market relating to the balance sheet, income statement, and cash flow analysis for any proposed M&A or Initial Public Order (IPO) for raising equity."

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Upoma Dutta

Financial Analyst at HBO

Gurinder-Wadhwa.jpg

Dr. Gurinder Wadhwa

Dentist at Adirondack Oral & Maxillofacial Surgery

Annette Montoto

Annette Montoto

President at Microfinanzas Puerto Rico

Financial Analysis and Valuation: Participant Testimonial “Ratio Evaluation”

Kelley Brown

Business Development Manager, Bechtel Power Corporation

Jerry Hogge

Jerry Hogge

Deputy President, Leidos

Omolara Akanji

Omolara Akanji

Independent Director, Sterling Bank PLC

FACULTY

Doron Nissim, Faculty Director
Ernst & Young Professor of Accounting & Finance

Professor Nissim earned his PhD in Accounting at the University of California, Berkeley, and joined Columbia Business School in 1997. He was granted tenure in 2005, and full professorship in 2007. He served as the chair of the Accounting division from 2006-2009 and 2014-2016.

Professor Nissim’s research is primarily in the areas of earnings quality, fundamental analysis, equity valuation, financial institutions, and corporate finance. Professor Nissim’s research is frequently cited in the popular press, including The Wall Street Journal, Time, The New York Times, Bloomberg, Chief Executive Magazine, The Economist, and the International Herald Tribune. Professor Nissim served as an editor of the Review of Accounting Studies from 2006 to 2013, and he currently serves as the director of The Initiative on Banking and Insurance in the Program for Financial Studies at Columbia Business School.

At Columbia Business School, Professor Nissim teaches MBA, EMBA and PhD courses in financial accounting, earnings quality, fundamental analyses, valuation, investment management, and research methods.

Professor Nissim consults extensively, both to buy- and sell-side firms as well as to other entities. His consulting focuses on equity valuation, fundamental analysis, earnings quality, investment management, and financial institutions.

Professor Nissim has received several honors and awards, including a prize from the Financial Executive Research Foundation for “the article from those published in the Accounting Review, which had the greatest import for users and preparers of financial reports;” the Morgan Stanley Award for Contributions to the Development of ModelWare Core Strategies; two nominations for the Brattle Prize at the Journal of Finance (outstanding paper in corporate finance); and two teaching awards: Columbia Business School Dean’s Award for Teaching Excellence in a Core Course, and Columbia Business School Dean’s Award for Teaching Excellence.