The eLearning Center for Gatlin Education Services

In this course on financial analysis and mergers & acquisitions, designed specifically for lawyers, Mr. Hennessey provides a review of basic corporate financial reporting concepts, including the balance sheet, income statement, and cash flow statement. He then provides an in-depth discussion of shareholder value, including (among other topics) such common financial return measures as earnings and estimates, P/E ratios, cash flow, cost of capital, economic value added, and a discussion of the �new economy� and its changing effect on shareholder value. Finally, Mr. Hennessey discusses mergers and acquisitions, including why they occur, how to evaluate acquisition terms, how to structure an acquisition, and more.

Financial Analysis and M&A for Lawyers
    I. Introduction
    II. Review
        A. Financial reporting basics and assets
        B. Liabilities
        C. Owners'' equity & book value
        D. Delta Airlines example
            1. Balance sheet: Delta Airlines
            2. Income statement: Delta Airlines
            3. Cash flow statement: Delta Airlines
            4. Investing & finance activity: Delta Airlines
        E. Ratio analysis
    III. Shareholder value
        A. Overview of shareholder value
        B. Wall Street
        C. Earnings and estimates
        D. What's wrong with earnings?
        E. P/E (price/earnings) ratio
        F. Price to sales ratio
        G. Cash flow
        H. Sample ratios: airline & Internet companies
        I. New economy: shift from tangible to intangible assets?
        J. Return on equity (ROE)
        K. What really drives stock valuations?
        L. Valuation & interest rates
        M. Cost of Capital
            1. Cost of capital
            2. Debt: cost of capital
            3. Conceptual example: cost of capital
            4. Equity & beta: cost of capital
            5. Cost of equity: Delta Airlines
            6. Cost of capital: Delta Airlines
        N. Economic value added (EVA)
            1. Economic value added
            2. Economic value added: Delta Airlines
        O. Creating shareholder value
    IV. Mergers & acquisitions
        A. Overview of mergers & acquisitions
        B. Acquisition terms
        C. AOL & Time Warner: combined
        D. Creating value from acquisitions
        E. Structuring acquisitions
        F. Discount rates
        G. Inflation and cost of capital
        H. Valuation, the stock market, and Internet companies
        I. Closing remarks
    AfterWords^SM