Selected references
- Preparation for the sale of a business unit under strict confidentiality
The challenge:
A business unit is to be sold. In order to avoid internal turmoil and keep costs manageable, the process should be handled under strict confidentiality as far as possible. Only beyond that an investment bank should be brought into the process. There is international interest for the business unit.
Our analysis:
Existing data quality and quantity in the company is good. It seems advisable to give this task to controlling. Furthermore, different departments (sales and production) must simultaneously work on the project and exchange data without information about the overall project flowing back to them.
Our solution:
Implementing the project within the framework of individual one to one training with controlling. The first step is planning model structure and preparing a description of the model. Since the business unit creates international interest, a bilingual model is set up. To prevent involved departments from gaining insight into the overall project, a model structure is chosen that allows various departments to work independently and that relieves controllers from laborious data entry work. The use of certain organizing principles in modelling in Excel® can prevent transcription or formula errors. Organizationally, it is agreed to carry out the project within the framework of the annual planning session.
The result:
A holistic model of the business division to be sold. The financial part with balance sheet, income statement and cash flow becomes the foundation for the sales process, which is conducted in collaboration with an appointed investment bank. Additionally, controlling can on demand deliver different scenarios and the derivation of key figures. This approach has also proven successful in the following Q&A sessions.
- One to one training for a returnee in corporate finance
The challenge:
A business consultant with experience particularly in the field of commercial due diligence plans a career move to the area of private equity. For an upcoming job interview, he wants to brush up and enhance his modelling skills.
Our analysis:
The candidate has basic modelling experience and business valuation knowledge. His main goal is to gain an understanding of LBO modelling – both assessment from a financial investor perspective and mapping in Excel®. Deepening his KPI analysis and cash flow statement skills are also important to him.
Our solution:
We schedule an approximately half-day one to one training session. The management consultant has already received a handout for preparation (the interview will take place shortly). During training, we use a finished model prepared by us in advance, in which the cash flow statement has been deleted. After appropriate theoretical input, the consultant prepares the cash flow statement under our guidance and then inserts the LBO assumptions and calculations. We then use this model to discuss key figures.
The result:
The consultant gained a clear understanding of how private equity companies approach analyzing possible acquisitions and is able to practically apply his knowledge.
- Financial modelling training for analysts and young associates of an M&A boutique
The challenge:
A medium-sized corporate finance consulting firm in Frankfurt wants to improve and standardize their analysts’ and associates’ expertise in financial modelling.
Our analysis:
There is a standard model used by employees, but with a varying degree of understanding. We have identified structured model building, the incorporation of operational performance indicators, DCF valuation and yield calculation in case of an LBO as the participants’ specific needs.
Our solution:
Using an original example project in a training comprised of four half days, participants can retrace the steps of model building, valuation and LBO on their own laptops and apply them on a second example in their homework assignment. Topics of the training are:
- basics of financial models (what they must deliver, how they are constructed)
- building an integrated financial model including planning statements from scratch, including cash flow calculation and normalizations
- integration of operational performance indicators and planning assumptions based on a price quantity structure
- effective application of sensitivities and cases
- foundations of valuation, in particular knowledge of the discounted cash flow method
- attaching LBO to an existing model
- opportunities for financial model quality checks and relevant Excel® shortcuts and formulas
The result:
Participants of the seminar will be able to build financial models on their own, determine relevant KPIs and perform sensitivity analysis in projects. Participants have understood the essential steps for DCF calculation and LBO attachment and can apply them. Additionally, discussing the relevant influencing variables during modelling (what depends on what) has further increased the participants’ understanding of economic correlations.