Valuation and Deal Analysis

This unit develops core investment banking skills in financial statement analysis, valuation, and transaction modeling. Students will apply liquidity and profitability metrics, compute cost of capital, build a basic LBO model, and evaluate regulatory, ethical, and non-financial factors that influence M&A and capital markets decisions, preparing them for advanced deal execution in later units.

Learning Objectives

• Analyze historical financial statements by constructing common-sized statements, performing trend and DuPont analyses, and interpreting liquidity multiples to assess company financial health
• Calculate valuation and capital structure metrics including weighted average cost of capital, bond classifications, and relevant multiples using comparable and precedent transaction data
• Construct a basic leveraged buyout model and run sensitivity/exit scenarios that incorporate target selection criteria and past transaction benchmarks
• Evaluate regulatory requirements, ethical considerations, and non-financial information by critiquing sample research reports, assessing news and market data sources, and identifying indicators of misstated financials