Course Overview
The purpose of this Master Class is for participants to learn how to build a project finance model over 3 intensive days using best practice principles.
This will include developing working sheets and financial statements to demonstrate the viability or otherwise of a specimen project.
Participants will learn how to handle common modelling issues and build a model which is flexible and comprehensive.
Key Points
Many project models can be difficult to use and amend and this Master Class offers the opportunity to build a comprehensive project financial model using tried and tested methods. The Master Class commences with a discussion of objectives and common mistakes and then develops the case model in stages. On completion, participants will have developed a complete project model which will act as electronic notes and a basis for future projects.
Methodology
The Master Class is taught using initial demonstrations combined with a practical and interactive case study. Starting with an initial template, each session builds up the case model to enable attendees to gain real practical experience.
Comprehensive product notes and modelling software are provided for future reference.
Day One
Module 1
Introduction
- Overview of the course
- Common modelling errors
- Systematic Design Method
- Model design and structure – key steps
- Case study outline
- Model sections
- Practical: reviewing model examples
Module 2
Model Template
- Starting position
- Model layout and design
- Required sheets
- Input sheets
- Key Excel features and techniques
- Practical: producing a model framework using best practice
Module 3
Production Forecast
- Production sales and volume
- Input prices and gross costs
- Impact of inflation and foreign exchange fluctuations
- Practical: completing operating statements
Module 4
Fixed Assets
- Depreciation of fixed assets
- Schedules and workings
- Practical: CAPEX and depreciation schedules
Day 2
Project Financing and Cash
Module 5
Financing and loans
- Loan drawdown
- Rate, terms and repayment
- Debt amortisation schedules
- Multiple debts and debt sizing
- Practical: Loans schedule with balance sheet and income statement inputs
Module 6
Income Statement and Balance Sheet
- Adding income and balance sheet
- Model checks on consistency
- Dealing with any circular references
- Practical: completing and checking the initial statements
Module 7
Cash flow
- International cash flow
- Cash flow to equity and debt providers
- Error checking
- Practical: cash flow and returns
Module 8
Ratios
- Loan life / project life ratio
- Residual cover
- Annual debt service ratio
- Principal and debt cover
- Interest cover
- Accounting ratios – profitability, liquidity, efficiency, structure
- Practical: ratios sheet
Day 3
DCF and Sensitivity
Module 9
Cost of Capital
- Capital Asset Pricing Model constituents
- Discussion and agreement on WACC inputs
- Asset and equity betas and risk
- Mathematical derivation
- Practical: adding WACC to case
Module 10
Discounted Cash Flow
- Methods of adding terminal value
- Producing an equity valuation
- Practical: adding equity valuation to the template
Module 11
Risk and Sensitivity
- Adding risk techniques
- What-if analysis
- Dynamic changes
- Dashboards and multiple scenarios
- Practical: Adding sensitivity and scenarios
Module 12
Management Summary
- Producing management summary
- Returns analysis
- Required model documentation
- Tracking changes
End of Course / Questions and answers
Who should attend?
- Investment Analysts
- Investment Bankers
- Investment Managers
- Portfolio Managers
- Financial Advisors
- Project Advisors
- Financial Analysts
- Project Finance Lawyers
- Project Managers
- Project Financiers
- Capital Spend Analysts
- Financial Controllers
- Treasury Department Staff
- CFO’s & Accountants
- Project Risk Managers
- In-House Legal Personnel
- Export-credit agencies
- Taxation Advisors
