Financial Modelling for Public-Private Partnerships

The course is based around a single exercise which runs through all three days of the course.  You start with a blank Excel worksheet and develop a model using a step by step approach introducing each of Excel’s useful features as they are required.  By the end of the course you will have a model that is reliable, robust and error-free.  This model will include a full set of accounts for a PPP project, including; inflation, sensitivity analysis, DCF valuation, LBO valuation, macros, data tables and graphics. 

Key Takeaways from Attending This Workshop:

• Learn how to write simple financial models that answer complex problems
• Create models that are logically laid out, easy to follow through and self-documenting
• Write models that can easily be expanded as situations become more complex whilst maintaining their simplicity
• Master how to make Excel work for you, speeding up the model creation process
• Produce financial models that do not contain any errors

• Accountant
• Corporate Planner
• Corporate Financier
• Strategic Consultant

After gaining his MA in Engineering at Cambridge University, Course Trainer joined KPMG and qualified as a chartered accountant in 1984

He then joined KPMG’s Management Consulting firm, specialising in writing financial forecasts using a variety of spreadsheets.  During this time he realised the importance of setting work out clearly and how difficult that can be with spreadsheets. 

Having developed his own spreadsheet methodology and applied it to numerous acquisition and other scenarios, Course Trainer was asked to lecture it to other spreadsheet users and to clients, including Schroeders, SBC Warburg, Hambros, NM Rothschild and NatWest. 

Course Trainer left KPMG to join UBS Warburg’s Education Department at the start of 1996.  There he continued to present his basic financial modelling course.  He also developed and presented courses covering the main technical topics that are essential knowledge for a corporate financier. 

In April 1998, Course Trainerleft Warburgs to set up as an independent management consultant, specialising in educating and advising people about financial modelling. 

Course Trainer also lectures to the MBA students at the London School of Business and Finance and at Kingston University. 

Testimonials:

"An excellent lecturer and made the course very interesting." 

"Easy to understand, with good examples putting work into context."

"Taught me some great practical points about modelling."

"Great communication skills and very broad experience in financial models."

Practical Exercise 1

• Starting with a blank spread sheet and performing all the initial steps
• Building a simple model to calculate profit during the operational phase of a PPP project

Practical Exercise 2

• Enhancing the operating profit model built in Practical Exercise 1
• Including all the required elements in an income statement in the model
• Extending the financial model time horizon to include the construction phase of the project

Practical exercise 3

• Adding cash and interest calculations to the basic gross profit model built in PracticalExercise 2
• Conducting calculations on senior debt, time weighted average senior debt and interest on senior debt
• Calculating cash balance, time weighted average cash and the interest on cash
• Working out the net financing cost and including it in the income statement

Practical Exercise 4

• Writing a balance sheet backing schedule using text function
• Adding all the backing schedules required for each value in the balance sheet and linking them to the appropriate places in the balance sheet and in the cash calculation built in Practical Exercise 3
• Completing the balance sheet to ensure the model’s correctness

Practical Exercise 5

• Adding sensitivity analysis to the full PPP financial models
• Calculating factors and linking these into the appropriate places in the model developed on Day 1
• Calculating the break points for each sensitivity factor

Practical Exercise 6

• Adjusting the model built in practical exercise 5 to offer three different scenarios
• Adding three scenarios and a drop-down menu
• Including data tables and plotting graphs to show the effect on the results of varying input figures

Practical Exercise 7

• Adding a full DCF valuation to the model we have built
• Calculating the DCF valuation of the case study company

Practical Exercise 8

• Adding two extra layers of debt to the model which will be used to refinance the company
• Putting a new capital structure onto the existing company including both amortising and bullet repayment debts
• Calculating the surplus cash generated by the company
• Adding a cash waterfall for accelerated debt repayment

Practical Exercise 9

• Adding an LBO valuation to the model
• Determining the LBO valuation of the case study company
• Comparing the case study company’s LBO valuation to its DCF valuation

Practical Exercise 10

• Extending the model’s time horizon
• Adding data tables and plotting graphs to show the effect on the results of a company of varying input data values

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Why Public- Private Partnerships:

“The real challenge is not a matter of money but a lack of bankable projects – a sufficient supply of commercially viable and sustainable infrastructure investments.”
Jim Yong Kim, World Bank Group President

“Developing countries now spend about US$1 trillion a year on infrastructure, but maintaining current growth rates and meeting future demands would require investment of at least an estimated additional US$1 trillion a year through to 2020.”
World Bank

“The Asia and Pacific region requires infrastructure investment of at least $8 trillion until 2020.”
Asian Development Bank, PPP Operational Plan 2012 – 2020

“The Government of India has announced that twenty-one road PPP projects bid out by the National Highways Authority of India (NHAI) did not get a single bidder during the fiscal year 2013-2014.”
Government of India