FinancialModelingFundamentals:ProgramOutline

ThetopicsinFinancialModelingFundamentalsaredesignedinaccordancewithwhatyoullneed toknowwhen1)Youreinterviewingwithbanksand2)Onceyoustartworkingatabank(or privateequityfirm,orhedgefund,orinanyotherfinance/businessrole). Everyoneiscominginwithadifferentleveloftechnicalknowledge,andthatswhywevemade iteasytotackletheselessonsinanyorderyouwant. Ifyoureinatimecrunchandneededanswersyesterday,youcanskiptowhateveryouneed helpwithbutifyouwanttogothrougheverythingfromtoptobottom,youcandothattoo. Evenifyousignupnowbutdonthavetimetouseitorcantuseitrightaway,noworries.You havelifetimeaccess,soyoucancomebacktotheprogramwheneveryouneeditwhether thatsin1month,1year,or10years. Intotal,thereare115videoswithaccompanyingExcelfilesforeverything.Thatamountsto20 hoursofvideoaltogether,whichmayseemlikealot.Butdontworry:everythingisbrokeninto bitesizedchunkssoyoucandigestiteasily. AllthecontentisavailablefordownloadinMP4(workswithQuickTimeandmostothermedia players),iPhone,andiPodformats:youcanwatcheverythingonthesite,ordownloaditto youriPhone,iPod,orlaptopifyoureontheroadalot. Andasyoumovethroughthelessons,youcancheckoffwhatyouvecompletedandwhats stillonyourtodolistandkeeptrackofeverythingandyoucangetanswerstoyour questionswhenyouhavethem.

Module1:AccountingFundamentals
Inthiscourse,wellcoveraccountingfundamentalsincludingthe3majorfinancialstatements, howtolinkthemtogether,andcommoninterviewquestionsonaccounting. WellstartoutbylookingatApplesfinancialstatementsandbuildinga3statementmodel fromthegroundup,goingthroughtheIncomeStatement,BalanceSheet,andCashFlow Statement,andthenlinkingthemtogether. Afterwevecreatedthebasicmodel,wellgothroughasetofcommoninterviewquestionson accounting,includinghowchangestodifferentlineitemsaffectthestatements. Files&Resources: Accounting&LinkingtheStatementsQuickReferenceGuide
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 AccountingInterviewQuestionsQuickReferenceGuide 1.1IncomeStatement(VideoLength:17:39) Inthislesson,youlllearnaboutthecommonitemsonacompanysIncomeStatementandthen practicebuildingyourownbyusingApples10Kfilingasareference. 1.2BalanceSheet:Assets(VideoLength:14:18) Inthislesson,youlllearnthekeycomponentsofacompanysAssetsandyoullgetpractice findingtheminApplesfilingsandbuildingthefirsthalfofaBalanceSheet. 1.3BalanceSheet:Liabilities&ShareholdersEquity(VideoLength:16:53) Inthisvideo,youlllearnthemostcommoncomponentsofLiabilities&ShareholdersEquity onacompanysBalanceSheetandyoullgetpracticecreatingthesecondhalfofApples BalanceSheet. 1.4CashFlowStatement(VideoLength:21:44) Inthislesson,wellcreateaCashFlowStatementforApplethattiestogethertheirIncome StatementandBalanceSheet,andyoulllearnwhattodowhenacompanysfilingsdontmatch uptoourmodel. 1.5LinkingtheFinancialStatements(VideoLength:13:48) Inthislesson,wellfinishlinkingtogetherApples3financialstatementsandyoullseehowall theitemsontheirBalanceSheetandCashFlowStatementflowintooneanother. 1.6OverviewofInterviewQuestionModel(VideoLength:7:56) Inthislesson,youlllearnthekeyfeaturesandusesofamodified3statementmodelthatyou canusetopracticeaccountinginterviewquestionsandtogothroughtheremainingtutorialsin thiscourse. 1.7WalkingThroughthe3FinancialStatements(VideoLength:4:24) Inthisvideo,youlllearnhowtoanswerthemostimportantaccountingquestionininvestment bankinginterviews:howtowalkthroughthe3financialstatements. 1.8DepreciationChanges(VideoLength:5:01) Inthislesson,youlllearnhowtoansweraccountinginterviewquestionsondepreciationand howdepreciationchangesaffectthe3statements.
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 1.9InventoryChanges:Cashvs.Debt(VideoLength:5:41) Inthislesson,youlllearnhowpayingforinventorywithcashvs.debtaffectsthe3financial statementsandhowtoanswerrelatedquestionsininterviews. 1.10Inventory:LIFOvs.FIFO(VideoLength:11:19) Inthislesson,youlllearnhowaccountingforInventoryandCostofGoodsSolddiffersunder LIFOvs.FIFO,andhowchangingfromonetotheotheraffectskeyIncomeStatementand BalanceSheetlineitems. 1.11AccruedExpenseAccrual&CashPayout(VideoLength:6:33) Inthislesson,youlllearnhowtoanswerinterviewquestionsonaccruedexpensesandhow accruingthemandthenpayingthemoutincashaffectthe3financialstatements. 1.12DeferredRevenueAccrual&Recognition(VideoLength:5:12) Inthisvideo,youlllearnhowaccruingandthenrecognizingdeferredrevenueasrealrevenue affectsthe3financialstatements. 1.13DeferredIncomeTaxes&DeferredTaxLiabilities(VideoLength:5:41) Inthislesson,youlllearnhowchangestoDeferredIncomeTaxesflowthroughthe3statements andtheroleofDeferredTaxAssets/Liabilities. 1.14Declaring&IssuingDividends(VideoLength:8:06) Inthislesson,youlllearnhowtoreflectdeclaringandissuingDividendsonthe3financial statements,andhowtowalkthroughbothprocessesininterviews. 1.15Issuing&RepurchasingShares(VideoLength:8:40) Youlllearnhowtomodelnewshareissuancesandrepurchasesofcommonsharesoutstanding, andhowtoanswerrelatedinterviewquestionsinthislesson. 1.16Raising&PayingOffDebt(VideoLength:5:11) Inthislesson,youlllearnhowraisingandpayingoffdebtarereflectedonthe3financial statementsandhowtoanswerquestionsonchangestodebtininterviews. 1.17Equity&DebtBailouts(VideoLength:9:20)
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Inthislesson,youlllearnhowtotranslateequityanddebtbailoutsintoaccountingterms andwhathappensonthe3financialstatementsineachscenario. 1.18GoodwillImpairment(VideoLength:5:00) Inthislesson,youlllearnhowtomodelGoodwillImpairmentandhowall3financial statementsareaffected. 1.19WritingDownOwedDebt(VideoLength:6:41) Thislessonwillteachyouhowtoansweroneofthemostcounterintuitiveaccounting interviewquestions:whathappenswhenyouwritedownaliabilityandhowthe3statements areaffected. 1.20FinancingiPhoneFactorieswithDebt(Part1MomentofImpact)(Length:4:11) Inthisvideo,wellwalkthroughthefirststepofamultistepscenariowhereApplepurchases iPhonefactoriesusingdebt,andthenownsthemforseveralyears. 1.21FinancingiPhoneFactorieswithDebt(Part2After1Year)(VideoLength:6:24) Inthislesson,wellmoveout1yearafterApplehaspurchasedthefactoriesandlookathowto factorinInterestExpenseandDepreciationonthe3statements. 1.22FinancingiPhoneFactorieswithDebt(Part3PP&EWriteDownandLoanPayback) (VideoLength:10:01) Inthislesson,wellcompleteourmultistepscenarioandseewhathappensafteranotheryear ofDepreciationandInterestExpenseandwhathappensafterAppleisforcedtowritedownthe valueofitsPP&EandrepayitsDebt. 1.23LetsMakeSomeiPhones(Part1OrderingtheInventory)(VideoLength:2:47) Inthislesson,wellgothroughthefirststepofanothermultipartscenariothistimeApple purchasesiPhoneinventoryandthenmanufacturesitintofinishedproducts. 1.24LetsMakeSomeiPhones(Part2Manufacturing&Selling)(VideoLength:4:28) Inthisvideo,wellcompletethismultistepscenarioandshowyouwhathappenswhenApple manufacturesitsInventoryintoiPhonesandsellsthemtocustomers.

Module2:Creating3StatementProjections

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Inthiscourse,wellshowyouhowtocreatea3statementprojectionmodelfromtheground up,startingwithablanksheetinExcelandprogressingallthewaytoafinishedmodel. WellstartbyusingApplesIncomeStatement,BalanceSheet,andCashFlowStatementwe createdpreviouslyandtoanalyzethehistoricalnumbersanddeterminetrends. Thenwellusethosetrendstodeterminethecompanysprofileinfutureyearsandprojectall3 statements. Files&Resources: 3StatementProjectionsQuickReference BalancingYourBalanceSheetQuickReference 2.1Overview(VideoLength:7:56) Inthislesson,youlllearnaboutthemodifiedmodelwellbeusingtoprojectthe3statements forAppleandthekeystrategieswellusetomaketheprojections. 2.2IncomeStatementTrends(VideoLength:12:04) Inthislesson,youlllearnhowtoanalyzeAppleshistoricalIncomeStatementtodeterminekey trendswellusetomakeourprojections. 2.3IncomeStatementProjections(VideoLength:12:24) YoulllearnhowtocreateincomestatementprojectionsforApplebasedontheirhistorical filings,equityresearch,andourownestimatesinthislesson. 2.4BalanceSheetTrends(VideoLength:10:54) Inthisvideo,youlllearnhowtoanalyzeAppleshistoricalBalanceSheetandthekey assumptionswellusetoprojectit. 2.5BalanceSheetProjections(VideoLength:12:35) Inthislesson,youlllearnhowtoprojectApplesBalanceSheetbycarryingforwardthekey metricsandpercentageswecalculatedinthepreviousvideo. 2.6CashFlowStatementProjections(VideoLength:15:57) ThisvideowillteachyouhowtomakeCashFlowStatementprojectionsforApple,usingthe historicalnumbersandmakingbasicassumptions.
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2.7Linkingthe3FinancialStatements(VideoLength:11:52) Inthislesson,youlllearnhowtolinktogetherthe3financialstatementsina5yearprojection model. 2.8AmortizationofIntangibles(VideoLength:6:29) ThisvideowillteachyouhowtoprojectandproperlylinktogetherAmortizationofIntangibles, basedontheIntangiblesscheduleinApples10K. 2.9InterestIncome&ExpenseProjections(VideoLength:9:30) Inthislesson,youlllearnhowtoprojectInterestIncomeandInterestExpenseforAppleand howtohandlecircularreferencesinyourmodel. 2.10DeferredIncomeTaxes&DeferredTaxLiabilities(VideoLength:12:07) ThisvideowillteachyouhowDeferredIncomeTaxes,DeferredTaxLiabilities,andDeferred TaxAssetsworkinthecontextofaprojectionmodelbywalkingyouthroughanexampleof howacompanymightrecorddifferentDepreciationexpensesforbookandtaxpurposes. 2.11BalancingYourBalanceSheet,Part1(VideoLength:6:02) Inthislesson,youlllearnhowtofixarelativelysimpleproblemwithour3statement projectionmodelandproperlybalanceourBalanceSheet. 2.12BalancingYourBalanceSheet,Part2(VideoLength:7:59) Inthislesson,youlllearnastrategytoeffectivelydiagnoseandfixproblemswhenyouhave morecomplexerrorsina3statementprojectionmodel. 2.13BalancingYourBalanceSheet,Part3(VideoLength:7:28) Thisvideowillteachyouhowtofixanother,morecomplexproblemwithour3statement modelandanotherapplicationofthebalancingstrategyyoulearnedbefore. 2.14BalancingYourBalanceSheet,Part4(VideoLength:10:26) Inthislesson,welltacklethemostcomplexmodelingproblemweveseenthusfar,andyoull learnhowtobalanceaBalanceSheetwhentheerrorisnotreadilyapparent. 2.15InterviewQuestions&Answers(VideoLength:15:48)
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Inthisvideo,youlllearnthekeyinterviewquestionsyoucouldreceiveonthetopicof3 statementprojectionmodelsandhowtoanswerthemeffectively.

Module3:EquityValue,EnterpriseValue&Multiples
Inthissequenceofvideos,wellexplainEquityValue,EnterpriseValue,andcommonvaluation multiplestobridgethegapbetweenaccountingandvaluationandfinancialmodeling. Buyingacompanyisjustlikebuyinghouse:therearealwayshiddencosts,andtherealprice youpayisdifferentfromthelistprice.Throughoutthissequence,wellusethishouseanalogy toexplainthekeyconceptsofEquityValueandEnterpriseValue. Then,wellshowyouhowtocalculatekeyvaluationmetricsandmultiplesandanswer commoninterviewquestions. Files&Resources: EquityValue&EnterpriseValueQuickReferenceGuide ValuationMetrics&MultiplesQuickReferenceGuide 3.1OverviewandMarketCapitalization(VideoLength:7:40) Inthislesson,youlllearnhowwevemodifiedour3statementmodeltosupportEquityValue, EnterpriseValue,andValuationMultiples,andyoullgetanintroductiontoMarket Capitalization. 3.2OptionsOverview(VideoLength:6:11) Inthislesson,youlllearnhowtothinkaboutoptionsconceptuallyandwhyoptions outstandingcouldpotentiallycreatenewsharesforacompanylikeApple. 3.3TreasuryStockMethod(VideoLength:11:15) Inthisvideo,youlllearnhowtousetheTreasuryStockMethodandApples10Ktocalculate itsDilutedEquityValue. 3.4TreasuryStockMethodExercise(VideoLength:6:38) YoullgettopracticeusingtheTreasuryStockMethodyourselfinthisexercisewedepart fromApplesfilingstogooveranotherexampleofhowtouseTSMandhowtodealwith multipleoptiontranches. 3.5ConvertibleBonds(VideoLength:11:51)
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Inthislesson,youlllearnthekeyterminologyassociatedwithConvertibleBondsandhowto calculatedilutionfromconvertiblestogettoDilutedEquityValue. 3.6EquityValuevs.EnterpriseValue(VideoLength:7:27) Inthislesson,youlllearnthedifferencebetweenEquityValueandEnterpriseValueandwhy welookatbothofthemwhenvaluingacompany. 3.7CalculatingEnterpriseValue(VideoLength:9:28) Inthislesson,youlllearnhowtocalculateApplesEnterpriseValueusingour3statement projectionmodelaswellasinformationfromtheir10K. 3.8EnterpriseValueAdvancedAdditions(VideoLength:16:02) Inthislesson,youlllearnaboutotheradditionswecouldmaketotheEnterpriseValueformula suchasEquityInvestments,NetOperatingLosses,CapitalLeases,andPensionObligations andyoulllearnhowtocalculatewhetheranOperatingLeaseshouldbecountedasaCapital Lease. 3.9KeyValuationMetrics(VideoLength:14:56) Inthislesson,youlllearnaboutkeyvaluationmetricssuchasEBIT,EBITDA,FreeCashFlow, andBookValueandyoullgetpracticemakingthecalculationsyourself. 3.10KeyValuationMultiples(VideoLength:15:28) Youlllearnaboutthemostimportantvaluationmultiples,suchasEV/Revenue,EV/EBITDA, EV/EBIT,P/E,andP/BVandgetpracticecalculatingthemyourselfinthislessonandyoull learnaboutindustryspecificvaluationmultiplesforretail,energy,realestate,andInternet companies. 3.11EquityValuevs.EnterpriseValueinValuationMultiples(VideoLength:11:35) Inthislesson,youlllearnwhentouseEquityValueandwhentouseEnterpriseValuewith differentvaluationmultiplesandindustryspecificvaluationmultiples. 3.12InterviewQuestions&Answers(VideoLength:14:11) YoulllearnhowtoanswerthemostcommoninterviewquestionsonEquityValue,Enterprise Value,andValuationMultiplesinthislesson.

Module4:ValuationOverview&Comparables

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Inthiscourse,wellbeginourdiscussionofValuationwithanoverviewofhowweusepublic companycomparables,precedenttransactions,anddiscountedcashflowanalysistovaluea company. Westartbyshowingyouhowtoselectcomparablecompaniesandtransactions,thenhowto findthedatainfilings,andfinallyhowtocalculateanddisplayalltherelevantmetrics. Files&Resources: PublicComps&PrecedentTransactionsQuickReferenceGuide 4.1Overview(VideoLength:8:02) Inthislesson,youlllearnaboutthevaluationmodelweregoingtobuildforAppleandthe differentmethodologieswellusetovaluethecompany. 4.2SelectingPublicCompanyComparables(VideoLength:10:01) Youlllearnhowtofindcomparablecompaniesandthenusescreeningcriteriatonarrowdown thesetinthislesson. 4.3CalculatingEnterpriseValueforPublicCompanyComparables(VideoLength:13:51) Inthislesson,youlllearnhowtogothroughHewlettPackards10Kfilingtofindthe informationnecessarytocalculateitsEnterpriseValueandwheretofindnumbersformore unusualitemslikeunfundedpensionobligations. 4.4CalculatingValuationMetricsforPublicCompanyComparables(VideoLength:9:40) Inthisvideo,youlllearnhowtopullHewlettPackardshistoricalandprojectedincome statementsfromacombinationoftheirSECfilingsandCreditSuisseequityresearch. 4.5PublicCompanyComparablesOperatingMetrics(VideoLength:13:47) Inthislesson,youlllearnhowtocalculatethekeyoperatingmetricsusedincomparable companyanalysisandyoullgetpracticemakingthecalculationsyourself. 4.6PublicCompanyComparablesValuationMultiples(VideoLength:10:25) Inthislesson,youlllearnhowtocalculatevaluationmultiplesforcomparablecompany analysisandyoullgetpracticemakingthecalculationsusingallthedatawevegatheredsofar. 4.7SelectingPrecedentTransactions(VideoLength:10:26)
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Inthislesson,youlllearnwherewecanfindinformationonprecedenttransactions,howto selectanappropriateset,andhowtonarrowdownthetransactionsbasedonsize,industry, geography,anddate. 4.8PrecedentTransactionsValuationMultiples(VideoLength:10:32) Thisvideowillteachyouhowtocalculateandusevaluationmultiplesinaprecedent transactionsanalysisandwhatthesemultiplestellusaboutthedealsweveselected.

Module5:DiscountedCashFlowAnalysis
Inthiscourse,wellextendourvaluationmodelbyprojectingourcompanyscashflowinto futureyearsandbuildingaDiscountedCashFlowAnalysisfromthegroundup. Wellstartwithanoverviewoftheanalysisandourbasicassumptions,andthenmoveintothe projectionsandhowtocombinetheirnetpresentvalueandtheterminalvaluetoarriveatan overallvaluation. ThenwelltakeadetailedlookathowtocalculatetheWeightedAverageCostofCapitalandgo throughpossibleinterviewquestionsonallthesetopics. Files&Resources: DiscountedCashFlowAnalysisQuickReferenceGuide 5.1Overview&Assumptions(VideoLength:5:07) Inthislesson,youlllearnaboutthekeyassumptionsweneedinaDCFanalysisandhowwell useourpreviousmodelforAppletocreateaDCF. 5.2ProjectingCashFlows(VideoLength:11:36) ThisvideowillteachyouhowtoprojectacompanysUnleveredFreeCashFlowinaDCF analysisandyoullgetpracticemakingthisprojectionusingourpreviouslycreated3 statementmodelforApple. 5.3DiscountingCashFlows(VideoLength:5:08) Inthislesson,youlllearnhowtodiscountacompanyscashflowstotheirpresentvalueina DCFanalysis. 5.4MidYearDiscountConvention(VideoLength:3:55)
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Inthislesson,youlllearnhowtoapplythemidyeardiscounttoacompanysprojectedcash flowstomoreaccuratelyestimatetheirnetpresentvalue. 5.5TerminalValueMultiplesMethod(VideoLength:6:31) Inthislesson,youlllearnhowtocalculatetheTerminalValueinaDCFbasedonexitmultiples andhowwecanselectthepropermultipletouseforApple. 5.6TerminalValueGordonGrowthMethod(VideoLength:7:21) ThisvideowillteachyouhowtocalculatetheTerminalValueusingtheGordonGrowth method,andhowtomodifythediscountformulaandpresentvaluecalculationtosupportboth TerminalValuecalculationmethods. 5.7ImpliedSharePriceCalculation&SensitivityTables(VideoLength:11:33) Inthisvideo,youlllearnhowtocalculateApplesimpliedsharepricebasedontheDCFand howtosetupsensitivitytablestoassessthevaluationunderdifferentassumptions. 5.8WalkingThroughaDCF(VideoLength:2:54) Inthislesson,youlllearnhowtowalktheinterviewerthroughaDCFanalysiswhenitcomes upinaninvestmentbankingorprivateequityinterview. 5.9InterviewQuestions&Answers(VideoLength:14:43) ThislessonwillteachyouhowtoanswerthemostcommoninterviewquestionsonaDCF analysis. 5.10WACCOverview&Assumptions(VideoLength:12:14) Inthisvideo,youlllearnabouttheconceptbehindWeightedAverageCostofCapitalandthe keyassumptionsweneedtomakewhenusingWACCastheDiscountRateinaDCFanalysis. 5.11WACCCalculatingUnleveredBeta(VideoLength:17:39) Inthislesson,youlllearnhowtothinkaboutUnleveredBetaandLeveredBetaconceptually, howtomovebetweenthetwo,andthenyoullgetpracticecalculatingUnleveredBetayourself. 5.12WACCCalculatingOurOwnBeta(VideoLength:7:22) Inthislesson,youlllearnhowandwhywemustreleverthemedianUnleveredBetafromthe comparablecompaniestocalculateApplesLeveredBetaforuseintheCostofEquity calculation.
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 5.13WACCCostofEquity&WACCCalculation(VideoLength:7:02) Inthisvideo,youlllearnhowtotieeverythingtogetherandcalculateCostofEquityand WACCforuseastheDiscountRatesinourDCFanalysis. 5.14WACCInterviewQuestions&Answers(VideoLength:17:09) Inthisvideo,youlllearnhowtoanswerthekeyinterviewquestionsyougetonthetopicsof WACC,CostofEquity,andUnleveredandLeveredBeta.

Module6:ValuationSummary
Inthiscourse,welllinktogetherthevaluationmethodologieswevecreatedinpreviouscourses andusethemtoarriveatanoverallideaofwhatourcompanyisworth. Oncewevedonethat,wellgothrougheachmethodologyandsummarizetheconclusionswe candrawandwhatthemodeltellsusaboutwhetherthiscompanyisovervaluedorunder valued. Finally,wellanswerasetofsampleinterviewquestionsonthetopicofvaluation,focusingon theoverallmethodologyaswellaspubliccompanycomparablesandprecedenttransactions. 6.1LinkingtheMethodologies(VideoLength:21:43) Inthisvideo,youlllearnhowtolinktogetherthepubliccompanycomparables,precedent transactions,andDCFanalysis,andyoullgetpracticecreatingyourownsummarysheetfor thevaluation. 6.2CreatingtheFootballFieldValuationGraph(VideoLength:11:46) Inthislesson,youlllearnhowtocreatetheinfamousfootballfieldgraphthatletsyou visualizeacompanysvaluationandseehowdifferentmethodologiesstackupagainsteach other. 6.3InterviewQuestions&Answers(VideoLength:19:47) Inthislesson,youlllearnhowtoanswerthekeyinterviewquestionsyoucouldreceiveonthe topicsofvaluation,publiccompanycomparables,andprecedenttransactions.

Module7:MergerModel

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Inthiscourse,wellcreateamergermodelbetweenAppleandResearchinMotionfromthe groundupandshowhowyoucombinetheincomestatementsofthebuyerandsellerandthe purchaseassumptionstogetaviewofthecombinedcompany. Wellstartbyextendingourhouseanalogytoexplaintheconceptofamergermodel,andthen gointothemechanicsofthemodelandthekeyacquisitioneffects. Then,welltakealookatsomeadvancedadditions:revenueandexpensesynergies,combining thebalancesheets,goodwill,intangibleassets,anddeferredtaxliabilities,andsensitivitytables. 7.1Overview(VideoLength:10:06) Inthislesson,wellextendouranalogyofbuyingahousetothemergermodelandexplain whatadownpayment,mortgage,andsaleofyourexistinghousecorrespondtoinfinance termsandyoulllearnhowwevemodifiedthevaluationmodeltosupportamergerbetween AppleandResearchinMotion. 7.2TransactionAssumptions(VideoLength:12:02) Inthislesson,youlllearnaboutthekeyassumptionsnecessarytocreateamergermodel, includingpurchasepriceand%cash,stock,anddebt. 7.3Buyer&SellerProjectedIncomeStatements(VideoLength:11:31) Inthislesson,youlllearnhowweputtogetherincomestatementsforthebuyerandsellerina mergermodelusingSECfilingsandequityresearch,andyoullgetpracticelinkinginthe relevantinformationforApple. 7.4CombiningtheIncomeStatements(VideoLength:11:35) Inthislesson,youlllearnhowtocombinetheincomestatementsofbothcompaniesandtake intoaccountforegoneinterestoncash,interestpaidondebt,andnewsharesissuedtofinance thetransaction. 7.5CalculatingAccretion/Dilution(VideoLength:5:30) Inthisvideo,youlllearnhowtofinishoffourmergermodelbycalculatingtheaccretion/ dilutionandlearningwhatthattellsyouaboutthetransactionsfeasibility. 7.6RevenueSynergies(VideoLength:9:52) Inthislesson,youlllearnaboutrevenuesynergiesandseeanexampleofhowtheymightoccur inadealbetweenAppleandRIMM,aswellashowtocalculatethemandincorporatetheminto ourmergermodel.
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 7.7ExpenseSynergies(VideoLength:9:24) Inthislesson,youlllearnaboutexpensesynergies,seehowtheymightapplytoAppleand RIMM,andlearnhowtocalculatethemandusetheminamergermodel. 7.8WhyWeNeedGoodwill&IntangibleAssets(VideoLength:12:35) Inthisvideowellbegincombiningthebalancesheetsofthebuyerandseller,andyoullsee whyweneedtocreateGoodwill,IntangibleAssets,andrelateditemsinanacquisition. 7.9CalculatingGoodwill,IntangibleAssets,AssetWriteUps&DeferredTaxLiabilities (VideoLength:15:35) Inthislesson,youlllearnhowtocalculatetheGoodwill,IntangibleAssets,AssetWriteUps, andDeferredTaxLiabilitiesthatgetcreatedinanacquisitionandwhyweneedeachofthese items. 7.10Combining&AdjustingtheBalanceSheet(VideoLength:7:10) Inthislesson,youlllearnhowtocombinethebalancesheetsofthebuyerandsellerandthen howtoadjustthemforacquisitioneffectstoensurethatbothsidesbalance. 7.11AdjustingtheIncomeStatement(VideoLength:7:19) Inthisvideo,youlllearnhowtoadjustthecombinedincomestatementtotakeintoaccount assetwriteupsandamortizationofnewlycreatedintangiblesandwhyotheritemswillnot affectourincomestatementatall. 7.12SensitivityTables(VideoLength:8:58) Inthisvideo,youlllearnhowtocreatesensitivitytablesforamergermodelthatallowusto analyzetheimpactofpurchaseprice,synergies,andotherfactorsonthecombinedcompanys EPS. 7.13WalkingThroughaMergerModel(VideoLength:3:15) Inthislesson,youlllearnhowtowalktheinterviewerthroughamergermodelwhenitcomes upinthecourseofaninterview. 7.14InterviewQuestions&Answers(VideoLength:17:49)

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Inthisvideo,youlllearnhowtoanswerthekeyinterviewquestionsyoucouldreceiveon accretion/dilutionanalysis,synergies,andthetreatmentofgoodwill,intangibles,andrelated itemsinmergermodels.

Module8:LBOModel
Inthiscourse,wellshowyouhowtobuildanLBOmodelfromthegroundup,startingwithan overviewoftheconceptsbehindthemodelandproceedingfromassumptionstofinished model. WellusetheanalogyofbuyingahousetoexplainLBOmodels,andthengothroughthe transactionandoperatingassumptionsnecessarytocompletethemodel.Then,wellproject Applesfinancialstatements5yearsandgetaviewofwhatitlookslikewheninvestorssellit. Finally,welllinktogethertheentiremodel,projectdebtandinterestpayments,andlookat investorreturnsoverarangeofvaluesusingsensitivitytables. 8.1LBOOverview(VideoLength:7:11) Inthislesson,wellextendourhousebuyinganalogytoLBOmodelsandyoulllearnthekey reasonwhyleveragedbuyoutsworkandwhyPEfirmsusethemtobuycompanies. 8.2TransactionAssumptions(VideoLength:11:22) Inthislesson,youlllearnhowtomakethekeyassumptionsweneedforanLBOmodel includingpurchaseprice,%debtandequity,andtransactionfeepercentages. 8.3DebtAssumptions(VideoLength:8:03) Inthislesson,youlllearnthedifferencebetweenbankdebtandhighyielddebt,standard assumptionsforeachone,andwhyweoftenusebothtypesofdebtinLBOmodels. 8.4Sources&Uses(VideoLength:6:26) Inthisvideo,youlllearnhowtocreateasources&usesscheduleforanLBOmodelthatshows uswherethefundsarecomingfromandwheretheyregoingto. 8.5OperatingAssumptions&IncomeStatement(VideoLength:10:46) Inthislesson,youlllearnaboutthekeyoperatingassumptionsweneedforourLBOmodeland youllgetpracticecreatingincomestatementprojectionsforApple. 8.6CashFlowStatement(VideoLength:9:26)
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YoulllearnhowtomodifyApplescashflowstatementforanLBOmodelandhowtomake5 yearprojectionsthatwecanusetodeterminedebtpayoffsinthislesson. 8.7DebtSchedules(VideoLength:16:50) Inthislesson,youlllearnhowtocalculatemandatoryrepayments,optionalrepayments,and interestexpenseondebtinanLBOmodel,andyoullgetpracticecreatingascheduleforhigh yielddebt. 8.8LinkingtheStatements(VideoLength:4:17) Inthislesson,youlllearnhowtolinktogetherthefinancialstatementsinourLBOmodelto ensurethatdebtisbeingrepaidproperlyandthatourbalancesheetbalances. 8.9CalculatingIRR(VideoLength:8:22) Inthislesson,youlllearnhowtocalculatetheinternalrateofreturn(IRR)totheprivateequity investorsinanLBO. 8.10SensitivityTables(VideoLength:9:50) Inthislesson,youlllearnhowtocreatesensitivitytablesinanLBOtoanalyzethereturns underdifferentassumptionsforpurchaseprice,exitmultiple,andleverage. 8.11WalkingThroughtheModel(VideoLength:2:35) Inthislesson,youlllearnhowtowalkthroughanLBOmodelinthecontextofaninvestment bankingorprivateequityinterview. 8.12InterviewQuestions&Answers(VideoLength:15:13) Inthislesson,youlllearnhowtoanswersomeofthemostcommoninterviewquestionsyou couldgetonthetopicofLBOmodelsanddebt.

Module9:MoreAdvancedLBOModel
Inthiscourse,youlllearnhowtobuildamoreadvancedLBOmodelthatincorporatesall3 financialstatements,proformabalancesheetadjustments,and5tranchesofdebtfromthe revolvertoPIKnotes. Wellstartbyexplaininghowthismodeldiffersfromthemorebasiconethatwelookedat,and thengointotransactionassumptions,sources&uses,purchasepriceallocationandbalance sheetadjustments.
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Then,wellcoverhowtosetupamoreadvanceddebtschedule,buildinacashflowsweepand revolverborrowing,andconcludebylinkingeverythingtogetherandcalculatingreturnsand sensitivitytables. 9.1Overview&ChangestoModel(VideoLength:8:09) Inthislesson,youlllearnhowourmoreadvancedLBOmodeldiffersfromthebasicone,and howwevemodifiedthe3statementmodelforAppletosupportthismoreadvancedLBO scenario. 9.2TransactionAssumptions(VideoLength:8:11) Inthislesson,youlllearnhowourtransactionassumptionsforthismoreadvancedmodel differfromwhatwesawpreviouslyinthebasicLBOmodel. 9.3DebtAssumptions(VideoLength:14:51) Inthislesson,youlllearnhowtosetupinterestrateandprincipalrepaymentassumptionsfor theRevolver,TermLoanA,TermLoanB,SubordinatedNotes,andPIKNotes. 9.4Sources&Uses(VideoLength:7:44) Inthislesson,youlllearnhowtocreateamorecomplexSources&Usesschedulethatincludes excesscash,additionaldebttranches,andbothexpensedandcapitalizedtransactionfees. 9.5PurchasePriceAllocation(VideoLength:14:07) Inthislesson,youlllearnhowtocreateapurchasepriceallocationscheduleinamore advancedLBOmodelandhowtocalculateGoodwill,IntangibleAssets,AssetWriteUpsand DeferredTaxLiabilities. 9.6ProFormaBalanceSheetAdjustments(VideoLength:14:23) Inthislesson,youlllearnhowtoadjustApplesbalancesheetandtakeintoaccountacquisition effectsfromtheLBOsuchasexcesscashused,assetwriteups,newdebtraised,deferredtax liabilities,andexpensedandcapitalizedtransactionfees. 9.7DebtSchedules:Interest(VideoLength:10:36) Inthislesson,youlllearnhowtoincorporatecircularreferencesintoourLBOmodelto calculateinterestexpenseoneachtrancheofdebtandtodeterminehowtheinterestrates changeeachyear. 9.8DebtSchedules:MandatoryRepayments(VideoLength:10:25)
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 Inthislesson,youlllearnhowtocalculatethecashflowavailablefordebtrepayment,the mandatorydebtpaymentseachyear,andhowmuchrevolverborrowingisrequired. 9.9DebtSchedules:OptionalRepayments(VideoLength:12:29) Inthisvideo,youlllearnhowtocalculateoptionalrepaymentsforeachtrancheofdebt,howto setupacashflowsweep,andhowtoerrorcheckourformulastomakesurewealwaysrepay therightamount. 9.10ModifyingtheIncomeStatement&CashFlowStatement(VideoLength:9:07) Inthislesson,youlllearntohowaddacquisitioneffectsfromitemssuchasthePP&Ewriteup, newintangibleassets,andPIKloanstotheIncomeStatementandCashFlowStatement. 9.11LinkingtheStatements(VideoLength:9:58) Inthislesson,youlllearnhowtolinktogetherall3statementsinourmoreadvancedLBO model,properlyreflectthechangesindebt,andensurethatthebalancesheetbalances. 9.12IRRCalculation&Sensitivities(VideoLength:10:22) Inthislesson,youlllearnhowtocalculatetheIRRinamoreadvancedLBOmodelandhowto setupsensitivitytablestoanalyzedifferentscenarios. 9.13InterviewQuestions&Answers(VideoLength:18:35) InthisfinalvideointhemoreadvancedLBOmodelseries,youlllearnhowtoanswerthemost commoninterviewquestionsondifferenttypesofdebt,purchasepriceallocation,andmore advanceddebtschedules.

AndMoretoCome
ThisoutlinecoverswhatsinVersion1.0ofFinancialModelingFundamentals.Andby themselves,these115lessonscovermaterialthatyoudhavetopaythousandsofdollarstogain accesstoviaotherprograms. Butthisisjustthebeginningsincethisisamembershipsitewhereyougetlifetimeaccess onceyousignup,youllgetnewlessonsassoonastheyredelivered. Aswegetrequeststoaddlessonsonadditionalandmoreadvancedtopics,wecandothatin realtimeandifyousignupnow,youllgetaccesstoeverything.
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Otheradditionsonthehorizonincludemorematerialonconvertiblebonds,IPOs,andequity capitalmarketsrelatedtopics,privatecompanies,andadditionalpracticeexercises. Soovertime,thisprogramwillonlygetbetterandbetter.

InstructorInteractionandYourQuestionsAnswered
Ofcourse,youdontjustgetalotofvideosandExcelfileswhenyousignupforthis.Youalso gettoaskquestionsonanythingyoudontunderstandwhetheritsanentirecourseorjust oneindividuallesson. Alotofprogramspromisesupportonceyoubuytheirproducts,buthowmanyactually deliver? Justlookonthemessageboardsandyoullseecountlessthreadsfrompeoplesellingother financialmodelingproductswhichmeanstheyrenotgettingthesupporttheyneed. Youcanthiremeasyourownpersonalfinancialmodelingtraineratanyprice.Butyoucanask mequestionsdirectlywithintheBreakingIntoWallStreetsite,andgettheanswersyoure lookingforallaspartofyourmembershipintheprogram.

TheEnrollmentFeeNowandintheFuture
IwishIcoulddosomekindofDCFanalysisandprojectyourcashflowsinfutureyearsonce youbreakintoWallStreettoseewhatthisprogrammightbeworthbuttherearetoomany variablesinvolvedandthatsjusttoohard,evenforaformerM&Abanker. SoIturnedtothenextbestalternative:thecomps(comparablecompaniesifyouhavent workedinbankingyet). WallStreetTraining:$3,250 TheAnalystExchange:$2,495(Yes,Iknowthisisnot100%comparable) WallStreetPrepPremium:$499 Now,ifIwereabankervaluingacompanythatwasoutperformingitscompetitors,Imight saythatitshouldbevaluedatapremiumtothecomps. Andtheressometruthtothat.Icouldhavejustsaid,Well,thisprogramisalotbetterthan anythingelseoutthere,soitshouldbethemostexpensiveofferingonthemarket. Eventually,thepriceofthisentirefinancialmodelingprogram(Excel+Fundamentals+ AdvancedModeling)willbe$497.
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Thatputsitonparwithselfstudyprogramscoveringsimilarmaterialonlywerealotbetter. AsfarasImconcerned,thebestwaytodobusinessistopriceonparwithyourcompetitors andthenbeatthemonquality. Butsincethisprogramisnewerthansomeoftheothers,Imgoingtoofferyou2discounts instead: Discount#1:Ratherthancharging$497,thepriceforeverythingcombinedwillbe$391. Discount#2:Weknowthatyoumaynotneedeverythingincludedinthefullfinancialmodeling programsoyoucansignupforeachmoduleseparately,atthefollowingprices: ExcellenceWithExcel:$97 FinancialModelingFundamentals:$147(yourereadingaboutthisonerightnow) AdvancedFinancialModeling:$247 ThisisanextremediscountforthelevelofcontentyouregettingtheFundamentalsmodule coversasmuchmaterialasWallStreetPrepPremium,butdoesitfor$147ratherthan$499. Evencomparedtobooksonaccountingandvaluationfundamentals,youregettingagood deal.Forexample,ThePractitionersGuidetoInvestmentBanking,Mergers&Acquisitions,and CorporateFinanceisnearly$100andthatssimplyalongtextbookwithnovideosor interaction. Ifyouwanttosignupforthewholeprogram,youllgeta20%discountoffitstrueprice. ButifyoujustwanttheFundamentalsportion,youreinforanevenbetterdealsaving70% offtheprogramstrueprice.

TheNoHassleMoneyBackGuarantee
Ifyourenotsatisfiedforanyreason,youcanrequestyourmoneyback.Infact,ifyourenot happyIwantyoutoaskforyourmoneyback. Take60daystoevaluateeverythinginsidetheprogram,andifyourenot100%satisfied, simplycontactusviatheContactlinkdisplayedoneverypageofthesiteandaskforyour moneyback.

WhatNow?
Onceyousignup,youllimmediatelyhaveaccesstothe115instructionalvideosorthe244 videosifyousignupforthefullprogramalltheExcelfiles,andthecompletecurriculum.And youllhaveaccesstometoaskwhateverquestionsyouhave.
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 Withthatcomeslifetimeaccesstothesite,freeupgrades,newcontentasweaddit,and support. Thanksforreading,andIllseeyouontheotherside. Brian Mergers&Inquisitions BreakingIntoWallStreet

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