Cash Flow Simulation and Other Tools for PlanningThis course will offer participants the knowledge and ability to use Cash Flow as a business management tool to create value for shareholders. Participants will learn how to analyze capital expenditures, variable compensation schemes, acquisition opportunities, the probability of attaining a business unit EBITDA goals and operating managers performance using Cash Flow, how to analyze variable compensation using cash flow and to determine their worst scenario for cash flow. |
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| Financial and strategic planning officials, risk managers, corporate treasurers, financial consultants, and economic and financial analysts. |
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| No advance preparation required. |
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Students will be able to:- Demonstrate solid understanding of the basic cash flow determination methods
- Have the skill to build and use a model for the simulation of cash flows within a firm
- Discuss fluently about the practical applications of a cash flow simulation model in CAPEX decisions, budgeting, Variable Compensation fine-tuning and business unit managers' accountability
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| Attendees must have a solid knowledge of basic financial statements and theories. A course in economic modeling and basic statistics is required. |
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| Introduction to Simulation for Financial Professionals Financial Modeling for Corporate Finance - Evening |
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Cash Flow Analysis from a Risk Point of ViewIntroduction to Cash Flow Analysis- Characteristics of cash flow and free cash flow
- Advantages of free cash flow versus net income
- Calculation of cash flow and free cash flow
- Relationship between market value and free cash flow
- Relationship between ROE and cost of capital
The Definition of Key Value Drivers- Drivers of cash flow in the firm: economic & cycle variables and their modeling
- Drivers of cash flow in the firm: costs and expenses variables and their modeling
| Statistical and Economic Modeling of Cash FlowEconometric and Statistical Analysis of Sub-Components of Cash Flow- Main econometric techniques applied to financial data
- Basic statistics for simulation methodologies
- Variables subject to simulation vs. those that are not
Complementary Models Assisting a Simulation Exercise- Main definitions for the cost of capital
- The capital asset pricing model
- Modeling of the weighted average cost of capital
- Capital budgeting using free cash flow
The Final Simulation Exercise Using a Pro-Forma Cash Flow Statement- Simulation variables vs. decision variables
- Continuous variables vs. dichotomous variables
- Simulation of EBITDA, free cash flow or total business return
|  | The Planning Toolbox: Applications with the Simulation of Cash Flow ModelApplications for the Simulation of Cash Flow- CAPEX decision making
- Variable compensation calculation for executives
- Worst case scenarios and alternative futures
- Business unit manager performance attribution and evaluation
- Cash flow at risk model
- Example of simulation of cash flow methodology to analyze strategic investments
- Modeling the optimal size of a war chest
- M&A simulation and buying capabilities
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| Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.) |
Lunch is included for all students taking day classes. |
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