FINANCIAL DUE DILIGENCE PROCESS IN CONSULTANCY FIRM LENSES
Syllabus
EN
IT
Learning Objectives
LEARNING OBJECTIVES:
The course aims to provide students with the basic knowledge related to the analyses and activities carried out in the context of financial due diligence.
KNOWLEDGE AND UNDERSTANDING:
Upon completion of the course, students will be able to recognise the main elements of the balance sheet and income statement that impact the price in an M&A transaction.
ABILITY TO APPLY KNOWLEDGE AND UNDERSTANDING:
At the end of the course, students will be required to apply what they have learned by preparing a brief due diligence report based on the knowledge acquired.
JUDGEMENT AUTONOMY:
Students will be asked to present the report, justifying the elements represented therein.
COMMUNICATION SKILLS:
Students will be required to clearly and coherently explain the major challenges of the due diligence processes.
LEARNING SKILLS:
Students will be asked to critically analyse the public information of a company and to complete specific in-class exercises on the main financial due diligence analyses.
The course aims to provide students with the basic knowledge related to the analyses and activities carried out in the context of financial due diligence.
KNOWLEDGE AND UNDERSTANDING:
Upon completion of the course, students will be able to recognise the main elements of the balance sheet and income statement that impact the price in an M&A transaction.
ABILITY TO APPLY KNOWLEDGE AND UNDERSTANDING:
At the end of the course, students will be required to apply what they have learned by preparing a brief due diligence report based on the knowledge acquired.
JUDGEMENT AUTONOMY:
Students will be asked to present the report, justifying the elements represented therein.
COMMUNICATION SKILLS:
Students will be required to clearly and coherently explain the major challenges of the due diligence processes.
LEARNING SKILLS:
Students will be asked to critically analyse the public information of a company and to complete specific in-class exercises on the main financial due diligence analyses.
Prerequisites
The attendance and the pursuing of related basic exams in the area of Accounting, Management and Strategy
Program
First lesson
1.FDD at a glance. Base financial data and reclassification
The deal continuum: identifying deals, valuating deals, executing deals, and harvesting deal;
The Financial Due Diligence: The financial due diligence is an analysis of fiancial information and management accounts of the target, for the purpose of a comprehensive valuation of the company.
Vendor vs Buy Side Due Diligence; : what is it, benefits for management, benefits for vendor, benefits for purchases
Our clients: different approaches between financial buyers and corporate buyers;
Integrity, validation and comprehension of financial data: analysis to be performed at the beginning of a DD;
Balance sheet and income statement reclassification - Functional vs financiala approaches;
DD Report structure
Groups formation for conducting a real FDD.
Second lesson
2. Balance sheet and net debt analysis
Focus on balance sheet: ovrevie of BS on a line by line basis
Focus on working capital and its evolution, WC requirements, seasonality etc;
Net Debt and adjusted net financial position: definitive and elements that are included based on M&A practice;
Case study and exercises
Third lesson
3.Income statement and Cash flow
Historical performance analysis: trends, KPI, recurring vs non recurring items;
Volume/Price effect and other analysis;
Quality of Earnings: overview and examples of main adjustments on reported EBOTDA;
Overview of cash flow;
Case study.
Fourth lesson
4. Project works presentation and final remarks
1.FDD at a glance. Base financial data and reclassification
The deal continuum: identifying deals, valuating deals, executing deals, and harvesting deal;
The Financial Due Diligence: The financial due diligence is an analysis of fiancial information and management accounts of the target, for the purpose of a comprehensive valuation of the company.
Vendor vs Buy Side Due Diligence; : what is it, benefits for management, benefits for vendor, benefits for purchases
Our clients: different approaches between financial buyers and corporate buyers;
Integrity, validation and comprehension of financial data: analysis to be performed at the beginning of a DD;
Balance sheet and income statement reclassification - Functional vs financiala approaches;
DD Report structure
Groups formation for conducting a real FDD.
Second lesson
2. Balance sheet and net debt analysis
Focus on balance sheet: ovrevie of BS on a line by line basis
Focus on working capital and its evolution, WC requirements, seasonality etc;
Net Debt and adjusted net financial position: definitive and elements that are included based on M&A practice;
Case study and exercises
Third lesson
3.Income statement and Cash flow
Historical performance analysis: trends, KPI, recurring vs non recurring items;
Volume/Price effect and other analysis;
Quality of Earnings: overview and examples of main adjustments on reported EBOTDA;
Overview of cash flow;
Case study.
Fourth lesson
4. Project works presentation and final remarks
Books
Slides, notes and readings prepared and assigned to students by the instructor
Teaching methods
Frontal lectures, training sessions and business cases
Exam Rules
The class will be divided in groups formed by 3 up to 5 people with the task of performing a simplified FDD of a listed firm. At the end of the journey each group must present its findings in to the whole class.
The final grade will be "Pass"/"not pass".
The final grade will be "Pass"/"not pass".
Attendance Rules
To get the credits, attending the 80% of lectures is mandatory