Free Cash Flow: The Key to Shareholder Value Creation (Part II) - Virtual

This course will offer participants the knowledge and ability to use Free Cash Flow as a business management tool to create value for shareholders. Participants will learn how to analyze capital budgeting and acquisition opportunities using Free Cash Flow, how to calculate Modified Free Cash Flow, and how to use Modified Free Cash Flow to analyze strategic investments.

This is a live virtual class session accessible from any internet enabled computer anywhere in the world. All class times are listed in EDT.

23-Sep-2008 -- 23-Sep-2008USD$600
Virtual class session9:00am - 12:00pm Instructional Method:
Group-Live
Instructor(s): [ Richard Malekian; ] Tue Level: Basic
CPE Credits: 3

05-Nov-2008 -- 05-Nov-2008USD$600
Virtual class session9:00am - 12:00pm Instructional Method:
Group-Live
Instructor(s): [ Richard Malekian; ] Wed Level: Basic
CPE Credits: 3

The course is designed for Chief Financial Officers, Senior Vice Presidents of Finance, Controllers, and accounting/financial analysts. The participants mentioned above all have involvement in areas where cash flow concepts are used, such as measurement of ongoing operations and business valuation.
No advance preparation required.
Students will be able to:
  • Use Free Cash Flow to analyze how their business decisions impact the economic value of the firm.
  • Operationalize Free Cash Flow throughout the company so that all employees will understand their role in the value creation process.
  • Use Free Cash Flow to analyze both capital budgeting and acquisition opportunities in order to determine whether those opportunities will create or destroy value for the organization.
  • Quantify a project’s terminal value through the use of cash flow perpetuity and constant growth rate techniques.
Knowledge/familiarity with basic concepts of accounting and finance, and completion of Free Cash Flow: The Key to Shareholder Value Creation (Part I)
Free Cash Flow: The Key to Shareholder Value Creation (Part II)
Review of Free Cash Flow
  • What is Free Cash Flow?
  • How is Free Cash Flow calculated?
  • Relationship between market value and Free Cash Flow
  • Relationship between return on investment and cost of capital
  • Free Cash Flow adjustments

Review of Cost of Capital

  • What is the cost of capital?
  • Cost of debt capital
  • Cost of equity capital
  • Weighted average cost of capital

Capital Budgeting Using Free Cash Flow

  • Goals of Capital Budgeting
  • Benefits of Using Free Cash Flow for Capital Budgeting
  • Numeric Example of Capital Budgeting Using Free Cash Flow
  • Incremental Analysis Using Free Cash Flow
  • Terminal Value Calculation
  • Cash Flow Perpetuity Method
  • Constant Growth Rate Method
  • Terminal Value Numeric Examples

Free Cash Flow and Interim Financial Results

  • Free Cash Flow Versus “Modified” Free Cash Flow
  • Relationship Between “Modified” Free Cash Flow and Market Value

Strategic Investments

  • What are Strategic Investments?
  • How Does Modified Free Cash Flow Address Strategic Investments?
  • Numeric Example of Modified Free Cash Flow Methodology to Analyze Strategic Investments

Acquisition Analysis Using Free Cash Flow

  • What are the Benefits of Acquisitions?
  • How is Free Cash Flow Used to Evaluate Acquisitions?
  • What is Total Value Received?
  • What is Total Value Paid?
  • How is Incremental Synergy Value Determined?
  • How is Acquisition Price Determined Using Free Cash Flow?
  • Numeric Example of Acquisition Analysis Using Free Cash Flow
This is a live virtual class session accessible from any internet enabled computer anywhere in the world. All class times are listed in EDT.

Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.