Corporate Finance and Capital Budgeting Training Course

Course overview

Capital budgeting decides what a company becomes. The plant that gets built, the market that gets entered, the system that gets replaced: these are the decisions that shape the next decade, and they are made on the basis of a discount rate, a set of forecast cash flows and a governance process. Each of those three can be wrong in ways that are invisible until the money is spent.

This course covers the discipline across twelve units: financial analysis, capital structure, cost of capital and weighted average cost of capital, appraisal techniques, risk and uncertainty, working capital, modeling, strategic investment, governance, performance and value creation, and an integrated closing case. It is educational and is not financial or investment advice.

Where investment appraisal goes wrong

Rarely in the arithmetic. Almost always in the inputs. The cash flow forecast comes from the team that wants the project approved. The discount rate is a single corporate number applied to a project with a completely different risk profile. Sunk costs are included because someone wants to justify the money already spent, and the terminal value quietly contains most of the net present value.

Then there is the governance failure: the project that clears the hurdle only after a third revision of the forecast, approved because a senior sponsor is attached to it. Good appraisal technique includes the process that keeps optimism out of the numbers, not only the formulas that process them.

Course objectives

By the end of the course, participants will be able to:

• Build incremental cash flows that include the working capital.
• Isolate the cash a project generates from the profit it reports.
• Sequence funding so the balance sheet survives the spend.
• Justify the discount rate applied to a specific investment.
• Compare projects when the appraisal methods disagree.
• Challenge a base case that was built to be approved.
• Rank the few drivers that decide a model's answer.
• Screen a portfolio for capital that should be released.
• Gate a commitment at the delegated limit that applies to it.
• Revisit a funded project and measure the economic profit earned.

Course outline

Unit 1: Introduction to corporate finance and capital budgeting

• The investment, financing and distribution decisions.
• Time value of money, discounting and why timing matters.
• Investment that earns more than the money it ties up.
• The capital budgeting process from idea to post-audit.

Unit 2: Financial analysis and decision-making

• Reading the statements for cash generation and leverage.
• Return on capital, asset turnover and coverage measures.
• Cash flow versus profit, and the project that destroys one.
• Cost behavior, contribution and breakeven as case inputs.

Unit 3: Capital structure and financing decisions

• Funding sources and the obligations each one fixes.
• Leverage, its effect on returns and on covenant headroom.
• Tax shields and the debt level that starts to cost.
• Matching funding to the tenor and cash flow of the asset.

Unit 4: Cost of capital and WACC

• Contested inputs inside the capital asset pricing model.
• Cost of equity from beta and the equity risk premium.
• Weighted average cost of capital and its common errors.
• Risk-adjusted rates by project, division and country.

Unit 5: Capital budgeting techniques

• Net present value as the primary decision criterion.
• Internal rate of return and its multiple-root problem.
• Payback and discounted payback under liquidity limits.
• Capital rationing, profitability index and unequal lives.

Unit 6: Risk and uncertainty in capital budgeting

• Sensitivity analysis and the one variable that breaks it.
• Scenario analysis with internally consistent combinations.
• Monte Carlo runs and the false comfort of a smooth curve.
• Real options and the value of keeping choices open.

Unit 7: Working capital and liquidity management

• Working capital locked in receivables and inventory.
• The cash conversion cycle and the funding it requires.
• Liquidity planning to the point of maximum cash exposure.
• Covenant and facility implications of a large capital spend.

Unit 8: Financial modeling for investment decisions

• Model structure with assumptions kept out of calculations.
• Building a forecast the sponsor is willing to sign.
• Checks and controls that catch the errors reviews miss.
• Reporting output with the uncertainty still visible.

Unit 9: Strategic investment and corporate growth

• Organic growth against acquisition: cost, speed and risk.
• Market entry, capacity and vertical integration decisions.
• Portfolio management and the exit nobody wants to propose.
• Strategic value outside the model and the duty to name it.

Unit 10: Governance and compliance in finance

• Investment approval gates and the committee that owns them.
• Independent challenge from the person paid to disagree.
• Post-implementation review of outcome against the case.
• Governance and disclosure duties on major commitments.

Unit 11: Performance measurement and value creation

• Actual returns measured years after the money was spent.
• Accounting earnings against value actually created.
• Tracking a project to the point where exit adds value.
• Capital allocation metrics and the behavior they produce.

Unit 12: Capstone case study

• Building the cash flows and the discount rate for the case.
• Appraising it four ways and reconciling the signals.
• Stress testing the case until it fails, and what breaks it.
• Taking the case to a real investment committee agenda.

How the course is delivered

The course runs on documented cases and real artifacts: business cases, model extracts, board investment papers and post-implementation reviews that participants analyze and pull apart. Worked examples take cost of capital, cash flow and appraisal calculations through step by step. There is no software environment; models are examined through structure and output. The course is educational and is not financial or investment advice, and it does not certify participants. Those who want the modeling craft in depth should look at Financial Modeling and Forecasting Techniques.

Who should attend

• Finance managers and analysts who build or review investment cases.
• Business unit leaders competing for capital and defending a business case.
• Corporate development, treasury and planning professionals.
• Executives and investment committee members who approve capital spending.

About EuroQuest International Training

EuroQuest International Training was founded in 2015 by a team with more than 25 years of experience in professional development. We run over 1,000 courses and have trained more than 15,000 participants, from our head office in Bratislava, Slovakia, with hubs in Dubai, London, Barcelona, Istanbul, Vienna, Paris and Geneva. Courses are developed and reviewed by practitioners from the fields they teach.

Frequently asked questions

Do I need to be comfortable with spreadsheets?

It helps but is not required. The course teaches the logic of the model and the decision, and participants who do not build models themselves still leave able to challenge one properly.

How is this different from an advanced financial management course?

The focus here is the investment decision: cash flows, discount rates, appraisal and approval. Advanced financial management ranges wider into treasury, transactions, valuation and financial strategy.

Does the course tell me whether to approve a specific project?

No. It is educational and is not financial or investment advice. It gives you the method to build and challenge the case; the decision remains with your organization and its advisers.

Related courses

• Advanced Financial Management Strategies
• Budgeting and Financial Planning for Organizations
• Financial Statement Analysis for Decision Making
• Financial Performance Measurement and Analysis

Register for this course

Choose a city and date from the schedule above to register, or contact EuroQuest about in-house delivery for a finance team and the business leaders who submit investment cases to it.