Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity

Written by the Founder and CEO of the prestigious New York School of Finance, this book schools you in the fundamental tools for accurately assessing the soundness of a stock investment. Built around a full-length case study of Wal-Mart, it shows you how to perform an in-depth analysis of that company's financial standing, walking you through all the steps of developing a sophisticated financial model as done by professional Wall Street analysts. You will construct a full scale financial model and valuation step-by-step as you page through the book.

When we ran this analysis in January of 2012, we estimated the stock was undervalued. Since the first run of the analysis, the stock has increased 35 percent. Re-evaluating Wal-Mart 9months later, we will step through the techniques utilized by Wall Street analysts to build models on and properly value business entities.

Step-by-step financial modeling - taught using downloadable Wall Street models, you will construct the model step by step as you page through the book.

Hot keys and explicit Excel instructions aid even the novice excel modeler.

Model built complete with Income Statement, Cash Flow Statement, Balance Sheet, Balance Sheet Balancing Techniques, Depreciation Schedule (complete with accelerating depreciation and deferring taxes), working capital schedule, debt schedule, handling circular references, and automatic debt pay downs.

Illustrative concepts including detailing model flows help aid in conceptual understanding.

Concepts are reiterated and honed, perfect for a novice yet detailed enough for a professional.

Model built direct from Wal-Mart public filings, searching through notes, performing research, and illustrating techniques to formulate projections.

Includes in-depth coverage of valuation techniques commonly used by Wall Street professionals.

Illustrative comparable company analyses - built the right way, direct from historical financials, calculating LTM (Last Twelve Month) data, calendarization, and properly smoothing EBITDA and Net Income.

Precedent transactions analysis - detailing how to extract proper metrics from relevant proxy statements

Discounted cash flow analysis - simplifying and illustrating how a DCF is utilized, how unlevered free cash flow is derived, and the meaning of weighted average cost of capital (WACC)

Step-by-step we will come up with a valuation on Wal-Mart

Chapter end questions, practice models, additional case studies and common interview questions (found in the companion website) help solidify the techniques honed in the book; ideal for universities or business students looking to break into the investment banking field.

PAUL PIGNATARO is the founder and CEO of the New York School of Finance (NYSF). He has over thirteen years of experience in investment banking and private equity in business mergers, acquisitions, restructurings, asset divestitures, asset acquisitions, and debt and equity transactions covering the oil, gas, power and utility, internet and technology, real estate, defense, travel, banking, and service industries. At NYSF, Mr. Pignataro continues to participate on the training team, actively providing training at bulge bracket banks and M&A teams at corporations, and billion dollar funds. Prior to his entrepreneurial endeavors, Mr. Pignataro worked at TH Lee Putnam Ventures, a $1 billion private equity firm affiliated with buyout giant Thomas H. Lee Partners. Prior to TH Lee, Mr. Pignataro worked in the Investment Banking department of Morgan Stanley.

Praise for Financial Modeling and Valuation "In Financial Modeling and Valuation , Paul Pignataro provides individual investors with an easy-to-use, step-by-step method for analyzing companies and their securities using the same financial modeling techniques used by professionals. By using Walmart, an American icon that is familiar to all, as a case study, Paul makes financial modeling come alive. Paul trained our staff in Beijing and is exceptionally well qualified to write this book." --Jack Perkowski, Wall Street veteran; Author; and Founder and Managing Partner of JFP Holdings Ltd.; former CEO and Chairman, ASIMCO Technologies, one of the largest producers of automotive components in China "Paul Pignataro's book is a treasure. He combines in one place a presentation of the concepts used in accounting and finance with the practical Excel ways to put them in action. This manual presents everything a student or a professional would like to understand about financial statements and valuation methods used in mergers and acquisitions. It is written in simple language, and the clarity of the expos

Praise for Financial Modeling and Valuation "In Financial Modeling and Valuation , Paul Pignataro provides individual investors with an easy-to-use, step-by-step method for analyzing companies and their securities using the same financial modeling techniques used by professionals. By using Walmart, an American icon that is familiar to all, as a case study, Paul makes financial modeling come alive. Paul trained our staff in Beijing and is exceptionally well qualified to write this book." Jack Perkowski, Wall Street veteran; Auth∨ and Founder and Managing Partner of JFP Holdings Ltd.; former CEO and Chairman, ASIMCO Technologies, one of the largest producers of automotive components in China "Paul Pignataro's book is a treasure. He combines in one place a presentation of the concepts used in accounting and finance with the practical Excel ways to put them in action. This manual presents everything a student or a professional would like to understand about financial statements and valuation methods used in mergers and acquisitions. It is written in simple language, and the clarity of the exposé makes it a perfect companion for those who are involved in financial matters." Georges Ugeux, Chairman and CEO, Galileo Global Advisors; Adjunct Professor, Columbia Law School; former Group Executive Vice President, New York Stock Exchange " Financial Modeling and Valuation is a key handbook for investment banking professionals and business students looking to get into the field. As a founder of a leading investment banking, private equity and hedge fund recruiting business, and as the former head of the analyst program at Morgan Stanley, I know the importance of demonstrated proficiency in financial modeling and valuation both during the hiring process and on the job. Finally, there exists a book that actually goes through the model building and valuation process in complete detail with methodologies critical to both budding analysts and experienced professionals." Eleni Henkel, Founder and Partner at Henkel Search Partners; former Managing Director and Global Head of Morgan Stanley's Analyst and Associate Programs " Financial Modeling and Valuation offers an extensive overview of key fundamentals of investment banking, private equity, and M&A analysis. It will be of interest to students and discerning investors alike." Professor Charles H. McGill, NYU Stern School of Business; Advisor with several leading private equity firms "I thoroughly endorse this financial 'model' work of art! Financial modeling and valuation methods are an art form of comparable analysis with a wide range of variables that can be considered quite subjective in terms of which method should be utilized. To become and stay informed, these mentioned models or tools can identify the proper program of analysis for 'rationalizing' a potential investment." Henry W. McCusker, Analyst, Journalist, and Publisher; Founder and Director of Research, Scimitar Equity "This book contains all the basic concepts required to successfully apply for, and get a head start on, a career on Wall Street, whether as a sell-side analyst, an investment banker, or a private equity specialist. I especially value the focus on Walmart, because this company touches on so many sectors and trends in today's business world, from retailing to logistics to real estate." Julio Marquez, Partner, Wyndham Global Partners

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