Free Cash Flow: The Key to Shareholder Value Creation (Parts 1 and 2 combined) - VirtualThis 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.
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| 05-Nov-2008 -- 20-Nov-2008 | | USD$1000 |  | | Virtual class session | 9:00am - 12:00pm |
Instructional Method:
Group-Live |  |
Instructor(s): [
Richard Malekian;
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| Wed Thu | Level: Basic |  | | | |  |
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| 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. |
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| No advance preparation required. |
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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.
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| Knowledge/familiarity with basic concepts of accounting and finance |
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Free Cash Flow: The Key to Shareholder Value Creation (Part I) - VirtualIntroduction to Free Cash Flow- Why the attention to Free Cash Flow
- What exactly is Free Cash Flow
- Characteristics of Free Cash Flow
- Advantages of Free Cash Flow versus net income
- How is Free Cash Flow calculated
- Relationship between market value and Free Cash Flow
- Relationship between return on investment and cost of capital
- Optimal investment horizon
- How to enhance Free Cash Flow
Free Cash Flow Adjustments- Operating adjustments
- Non-recurring adjustments
- Cash Adjustments
- Economic Adjustments
- Net operating profit after taxes (NOPAT)
- Invested Capital
- Symmetry between NOPAT and capital investment adjustments
Free Cash Flow Drivers- Operationalizing Free Cash Flow
- Sub-components of Free Cash Flow
- Optimization vs. Maximization of Free Cash Flow drivers
Cost of Capital- What is the cost of capital
- Sources of capital
- Characteristics of debt capital
- Cost of debt capital
- Characteristics of equity capital
- Cost of equity capital
- Capital asset pricing model
- Weighted average cost of capital
| Free Cash Flow: The Key to Shareholder Value Creation (Part II) - VirtualReview- Review of Free Cash Flow
- Review of 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
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| Save $200 by enrolling in this combined session! |
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