Financial Modelling - Lecture 1
Session 1 Page 1
9/29/10
Material presented in four sections.
Analytical and ratio techniques for understanding
business performance, liquidity, and financial structure. Cash flow forecasting techniques are then applied to to produce a cash flow (and earnings-based) financial valuation model. Special topics include taxes, compensation, pensions, financial institutions (time permitting) Multiples valuation analysis, lawsuits and false information, regulatory environment.
Session 1 Page 2
9/29/10
Two projects account for 80% of course.
The first group project is to develop a cash flow
financial valuation model of a company of your choice (50%) As a second group project, you should examine a shareholder class action lawsuit (30%) One individual effort assignment (10%) Class attendance and participation (10%) Next slide – last year’s project portfolio performance (relative to S&P 500 index).
Session 1 Page 3
9/29/10
Mgp272 portfolio: 4 Dec. 2009 to 20 Sep. 2010
Buy: RELL, CMG, IMAX Sell: SPWRA
Session 1 Page 4
9/29/10
Mgp272 portfolio: 17 Feb. 2009 to 22 Sep. 2009
1.7 Portfolio Index (2/17/09=1) 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 0.8 2/17/09 3/17/09 4/17/09 5/17/09 6/17/09 7/17/09 8/17/09 9/17/09 Excess Return
1.58
0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 6/2/09 2/17/09 3/10/09 3/31/09 4/21/09 5/12/09 6/23/09 7/14/09 8/4/09 8/25/09 9/15/09
16%
1.37
MBA 272 Portfolio
S&P 500
GenentechBUY, BestBuyBUY, CoachBUY, GoogleBUY, McDonaldsBUY, YahooBUY
Session 1 Page 5
9/29/10
Innovator article
Session 1 Page 6
9/29/10
Mgt/Mgp 272 should have high “valueadded” content.
Financial modeling based on sound financial
concepts and empirical literature. Develop expertise with high applications content. Integrates accounting, finance, economics, statistics, and strategy. Modeling intensive. Information intensive.
9/29/10
Material presented in four sections.
Analytical and ratio techniques for understanding
business performance, liquidity, and financial structure. Cash flow forecasting techniques are then applied to to produce a cash flow (and earnings-based) financial valuation model. Special topics include taxes, compensation, pensions, financial institutions (time permitting) Multiples valuation analysis, lawsuits and false information, regulatory environment.
Session 1 Page 2
9/29/10
Two projects account for 80% of course.
The first group project is to develop a cash flow
financial valuation model of a company of your choice (50%) As a second group project, you should examine a shareholder class action lawsuit (30%) One individual effort assignment (10%) Class attendance and participation (10%) Next slide – last year’s project portfolio performance (relative to S&P 500 index).
Session 1 Page 3
9/29/10
Mgp272 portfolio: 4 Dec. 2009 to 20 Sep. 2010
Buy: RELL, CMG, IMAX Sell: SPWRA
Session 1 Page 4
9/29/10
Mgp272 portfolio: 17 Feb. 2009 to 22 Sep. 2009
1.7 Portfolio Index (2/17/09=1) 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 0.8 2/17/09 3/17/09 4/17/09 5/17/09 6/17/09 7/17/09 8/17/09 9/17/09 Excess Return
1.58
0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 6/2/09 2/17/09 3/10/09 3/31/09 4/21/09 5/12/09 6/23/09 7/14/09 8/4/09 8/25/09 9/15/09
16%
1.37
MBA 272 Portfolio
S&P 500
GenentechBUY, BestBuyBUY, CoachBUY, GoogleBUY, McDonaldsBUY, YahooBUY
Session 1 Page 5
9/29/10
Innovator article
Session 1 Page 6
9/29/10
Mgt/Mgp 272 should have high “valueadded” content.
Financial modeling based on sound financial
concepts and empirical literature. Develop expertise with high applications content. Integrates accounting, finance, economics, statistics, and strategy. Modeling intensive. Information intensive.