Business Valuation and Value Based Management

Syllabus

Course Code: 3.3.1

BUSINESS VALUATION AND
VALUE BASED MANAGEMENT

Module 1: Introduction to Fundamental Tools of Finance 8 Hours

Meaning of Financial Management – Goals of Financial Management - Analysis of Financial Statements – DU PONT ANALYSIS; Time Value of Money – Compounding, Discounting, Annuity and Perpetuity; Weighted Average Cost of Capital – CAPM based calculation. Beta – Un-levering and Re-levering

Module 2: Corporate Valuation                                        16 Hours

Valuation of Firm and Valuation of Equity – Net Assets Method, Earnings Capitalisation Method, Relative Valuation, Chop Shop Method. Valuation of Firm and Valuation of Equity – Discounted Cash Flow (DCF) Method, Adjusted Present Value (APV) Method, Economic Value Added (EVA) Method. Indian Valuation Standards issued by ICAI.

Module 3: Advanced issues in Valuation                          10 Hours

Valuation of High Growth Companies, valuation of Cyclical Companies, Valuation of Banks, Valuation of Insurance Companies. Cross-border Valuation, Valuation in Emerging Markets, Valuation of Private Companies. Valuation of Intangible Assets. Human Resource Valuation. Brand Valuation.

Module 4: Value Based Management and Corporate Restructuring

                                                                                             8 Hours

Marakon Approach, Alcar Approach, Mc Kinsey Approach, Stern-Stewart Approach and BCG Approach. Performance Measurement and Analysis. Balanced Scorecard.

Module 5: Corporate Restructuring                                   8 Hours

Corporate Restructuring – Ownership Restructuring, Business Restructuring, Asset Restructuring, Organisational Restructuring. Financial Restructuring - Designing or Redesigning Capital Structure, Financial Restructuring in the Event of Change in Legal Requirements, Financial Restructuring in the Event of Continuous Losses, Buy-back of Shares, Rights Issue, Convertible Instruments, Callable Bonds.

Module 6: Mergers and Acquisition                                  10 Hours

Valuation for Merger / Acquisitions, Financing a Merger, Determining Exchange Ratio – Range and Terms. Feasibility of Mergers and Acquisitions.