This document explains the basics of financial analysis. It explains financial statements, financial ratios/comparables, and capital markets. This training presentation has been adopted from the ones used at global consulting firms.
Dive deep into the intricacies of financial analysis with real-world examples from Dell Computer Corporation. This presentation meticulously dissects Dell's financial statements, offering a comprehensive look at their cash flow statements and key financial ratios. Gain insights into how Dell's strategic financial decisions have shaped their market position and operational efficiency.
Understand the nuances of ratio analysis and its selective application for strategists. The document highlights the most impactful ratios, such as debt ratio and return on equity, and explains their significance in evaluating a company's financial health. This section is crucial for executives aiming to leverage financial metrics for strategic planning and decision-making.
Explore advanced valuation techniques, including the discounted cash flow (DCF) analysis, to estimate the intrinsic value of a company. The presentation covers the four-step DCF process, common pitfalls, and the importance of accurate cash flow forecasting. Equip yourself with the knowledge to make informed investment decisions and uphold shareholder value through rigorous financial analysis.
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Source: Best Practices in M&A, Valuation PowerPoint Slides: Finance and Valuation Basics PowerPoint (PPT) Presentation Slide Deck, alex
This PPT slide presents a structured approach to understanding cash available to shareholders, derived from a company's financial statements. It emphasizes 2 main calculations: firm value and free cash flow.
At the top, the slide outlines the calculation of firm value, which is the sum of equity and debt value. This is crucial for stakeholders to assess the overall worth of the company. The formula for equity value is straightforward, defined as the stock price multiplied by the number of common shares. This section sets the foundation for understanding how shareholder value is quantified.
The right side of the slide delves into calculating free cash flows, a key metric for evaluating a company's financial health. Starting with EBIT, or Earnings Before Interest and Taxes, the slide shows a figure of $100. It then adds non-cash expenses, such as depreciation, resulting in an EBITDA of $110. This figure is further adjusted to account for taxes, yielding $66.
The slide also highlights necessary investments, including capital expenditures and working capital increases, totaling $25. After subtracting these investments from the adjusted EBITDA, the resulting free cash flow is $41. This metric is vital for potential investors as it indicates the cash a company generates after accounting for capital expenditures, which can be distributed to shareholders or reinvested in the business.
Overall, this slide serves as a concise guide for executives looking to understand the financial metrics that directly impact shareholder value. It provides a clear framework for evaluating both firm value and free cash flow, essential for informed decision-making.
M&A (Mergers & Acquisitions) Valuation Cost Reduction Assessment Performance Management Consulting Frameworks Consulting Training Strategy Frameworks Growth Strategy Quality Management & Assurance Cost of Quality Valuation Model Example PowerPoint Diagrams Compilation Deal Structuring Procurement Strategy Alliances Benchmarking Shareholder Value Change Management Target Operating Model
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