Financial Analysis and Valuation for Lawyers Syllabus

Financial Analysis and Valuation for Lawyers is designed to help you navigate your organization or client’s financial goals while increas-
ing profitability and minimizing risks. Through examples of business valuations and presentations from real-world practitioners, you’ll
learn how to interpret financial data, make a business case, and know what types of experts can help support your argument.

Modules Case Studies Takeaways Key Exercises

• Accounting is not equivalent to • Finding key financial

economics statements
• Financial statements have a standard • Differentiating between assets
Module 1

Understanding • Flowers Foods structure and consistent elements and expenses

Financial
Statements • Earnings (net income) and cash flows • Revenue and expense
can diverge recognition

• Ratios are a way to analyze, • Calculating valuation and

standardize, and compare many profitability ratios
things • Matching company financials
Module 2

Analyzing • Flowers Foods • Key ratios for financial statement to industries with ratios
Financial analysis are P-to-B, PE, and gross
• Dave’s Killer Bread
Statements margin

• Market prices are a way to value • Calculating enterprise value

public companies • Calculating enterprise value to
Module 3

• Albertsons • Ratios from comparable public EBITDA ratio

Valuation companies can substitute for market
Using Comps prices

• Simple formulas relate FV to PV • Simple discounting exercises

• A good business is a growing • Using PV to analyze a legal
perpetuity doctrine

• Sparkle! • The cost of capital (“K”) is the rate to • Choosing among payment
Module 4

Discounting turn FV into PV options for settlement of a

and Cost of • Flowers Foods lawsuit
• K can be estimated with two
Capital statistics (“beta” + the “market risk • Valuing a law degree
premium”) + the risk-free rate • Valuing Flowers Foods with
a DCF model, including debt,
using assumed forecasts

© Copyright 2021. President and Fellows of Harvard College. All Rights

 Modules Case Studies Takeaways Key Exercises

• FCFs and not income are used to • Calculating EBIT

model enterprise value • Finding and calculating inputs
• Ratios can help create and test FCF to a set of DCF forecasts
forecasts • Estimating and using growth
Forecasting
• Usually we forecast 3-10 years, then forecasts
Module 5

and • Sparkle! end with a “terminal” year (“TY”),

Discounted including terminal growth (“g”)
• Completing a set of DCF
• Flowers Foods forecasts for Flowers Foods
Cash Flow
• Common sense can help estimate” g”
Modeling
• Lawyers can ask 20+ questions to
probe and test the reliability of
forecasts used to value companies

• Accounting, finance, and valuation • Estimating profit and

are key elements in many legal compensation from the BP
disputes Oil Spill Fund for a company
harmed by the spill
• Present value, discounting, the
• BP Oil Spill perpetuity formula, and the DCF • Valuing the hedge fund
model are all used by lawyers in partnership interest of a
• Adams v. Adams
various ways in real lawsuits husband involved in a divorce
• Matrix v. Rawlings
Module 6

Valuation • Accounting, finance, and valuation, • Calculating harm from a

• Disney v. like law, involve constrained breach of contract
Disputes and
Children’s judgment
Advocacy • Calculating the benefit from
Television
the misappropriation of
• Golden Telecom intellectual property
• Deriving the fair value of a
company using the DCF model
and given inputs

Learning requirements: In order to earn a Certificate of Completion from Harvard Online, participants must thoughtfully complete all 6
modules, including satisfactory completion of the associated quizzes, by stated deadlines.

© Copyright 2021. President and Fellows of Harvard College. All Rights