Brandeis University
International Business School
Financial Modeling I (1)
Fall 2014
Purpose of the Course
 Acquaint students with modeling methodologies by having them calculate the values of
various companies and projects under different market and financial conditions
 Understand finance for what it is - the sum total of quantitative analysis, business
judgement, understanding of various industries and markets, timing, and cleverness
 Become comfortable in making quantitative assessments under conditions of extreme
uncertainty.
Pre-requisites
 Accounting and Corporate Finance or instructor permission
Materials for the Course
 All cases may be purchased at: https://cb.hbsp.harvard.edu:443/cbmp/access/26422416
 Any other readings will be posted on Latte
Grading
 Case analyses (80%), class participation (20%)
 Low class/quality participation will result in a final grade of B
 All work is submitted electronically and graded work is returned within 48 hours
Office Hours
 Tuesdays/Wednesdays: 11 am – 2 pm
 Thursdays: 9:20 pm
 Fridays 12:30 – 2 pm
 Walk-in and by appointment - email me at canella@brandeis.edu
Rules of the Road
 NO open laptops/tablets or cell phones in class
 Arrive on time and be prepared
 Take and display your name cards to class
 Seats will be assigned, and you will use the same seat for the remainder of the class
 Cases: you may work individually or in groups of two (I must sign off on groups)
 If you have a documented disability, please see me
 You are expected to follow Brandeis’s policies on academic integrity; check
http://www.brandeis.edu/studentaffairs/srcs/ai/top10students.html
Brandeis University
International Business School
Financial Modeling I (1)
Week
Topic
Reading/Case Due
1st
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Mandatory readings:
 Introduction to CF Valuation Methods
 What’s it Worth? A General Manager’s Guide
to Valuation
 Using APV: A Better Tool for Valuing
Operations
 Brazilians Build, Trade “Maid Routes” (Latte)
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2nd
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3rd
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4th
5th
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6th
7th
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Introduction
Discounted cash flows
Seasonality and
forecasting
Pro forma statement
preparation
Profitability vs. risk and
liquidity
Balance sheet forecasting
Discount rate
methodologies
Sports valuations
Terminal value
calculations
LBO valuations
Risk analysis
Working capital
approximations
Capital Cash Flows vs
APV
Pricing vaccines
Health care pricing
Insurance
Strategic vs. financial
acquisitions
Terminal value
methodologies
Transactions and trading
multiples
WACC vs. APV
Capital Cash Flows
Leverage
Wrap-up and reflection
 Toy World, Inc.
 Globalizing the Cost of Capital and Capital
Budgeting at AES
A-Rod: Signing the best player in baseball
Ducati & Texas Pacific Group—A "Wild Ride"
Leveraged Buyout
Merck: Pricing Gardasil
Radio One, Inc.
Sampa Video, Inc.