Financial Analysis and Deal Modeling

This unit develops practical skills for analyzing companies and structuring investment banking transactions, focusing on financial statement analysis, valuation metrics, and deal modeling for M&A and leveraged buyouts. Students will learn data preparation, construct working LBO models, assess capital costs and securities, and evaluate regulatory, ethical, and non‑financial factors that influence deal outcomes—building on introductory concepts and preparing for execution and client-facing activities in subsequent units.

Learning Objectives

• Analyze company financial statements by computing and interpreting balance sheet components, liquidity multiples, common‑size statements, and trend analyses to assess solvency and operational performance.
• Apply valuation and deal‑structuring techniques by calculating weighted average cost of capital (WACC), assessing leverage capacity, and building a functional leveraged buyout (LBO) model to project returns and exit scenarios.
• Demonstrate securities and research competencies by identifying bond types and basic derivatives, locating comparable transactions and sample research reports, and cleansing and formatting raw market and financial data for use in models.
• Evaluate the effects of regulatory rules, ethical issues, analyst conflicts, trading desk roles, and non‑financial information on transaction outcomes and research integrity, and recommend mitigation or disclosure strategies.