This week our current events began pertaining to Israel and their economy. The first current event covered Israel’s international growing commerce. Governor John Ben El visited Israel in hopes of strengthening ties with Israel and Louisiana. Israel provides a unique opportunity to many American states and it is a big deal that governors and people of authority are making the effort to build the US-Israel relationship. Israel is becoming an international trade partner with many countries due to its high capacity of start-ups and its rapidly growing opportunities. Governor John Ben El of Louisiana discussed potential relationship deals to prioritize them as a future partner. The other current event involved the reciprocal procurement between Boeing and Israel which was made to ease tensions to U.S. aid packages. This is very important because Israel is no longer in fear of losses and Boeing secured business from the restructuring of the benefit package.
VP of Consulting, Gabby Fishe, taught new members about the business model canvas (BMC). The business model canvas is a layout that forces you to visually plot a company in a certain way which forces you to see that company in a new perspective. This is one method to look at the company in a universal way with the value propositions and specifics relating to the consumer and drivers of the business. Students were also introduced to the case study and had the opportunity to walk through it as a class, ask questions, and clarify any confusion. In the following week, students will begin working on their group case studies, starting with researching next class and finishing the projects outside of class.
VP of Fund, Matthew Blanks, walked students through an example of a previous year’s TAMID Group stock pitch from Oracle. Students were also quickly given another overview of valuation methodologies and the three financial statements. This transitioned us into working capital, which shows how the current assets and current liabilities affect the value of a company (An increase in working capital would decrease a company’s value and an increase in cash flow would increase a company’s value.
Additionally, the three main methods of valuation we reviewed were discounted cash flow (DCF), comparable companies (public comps) and precedent transactions. These all lead us to plotting the range of valuations on a “football field” graph. This shows how the value of a company varies depending on which valuation method and assumptions are used. Students also learned about the cost of financing (weighted average cost of capital or WACC) which is used to discount the future cash flows in a DCF to their net present value (NPV). This uses the cost of debt and equity which are the cost of interest rate and CAPM model. Lastly, public comps and precedent transaction analyses are used to compare the company to similar valued companies in order to get an idea of how much it should be valued at in relation to similarly valued companies and transactions that have taken place.
TAMID took advantage of a great opportunity that made its way to campus. This past week, Tal Brody visited the University of Illinois and we were fortunate enough to host a private event with him and hear about his life and all the work he has accomplished with Israel. Tal began as a basketball player at Illinois, he was drafted to the NBA, deferred his professional career in the US to play in the Maccabi games in Israel, and has now lived and worked in Israel for the past 40+ years. Currently, he acts as the US-Israel Goodwill Ambassador and continues to work with countless Israeli companies. Additionally, Tal spends a lot of his time travelling the globe in order to speak to students in Israel and the US about his journey and why he chose to start and end his career/life in Israel. It was very interesting and inspiring to hear from Tal, as he helped instill in our members a lasting connection and importance of Israel, its culture, economy and plentiful opportunities. After, everyone participated in a Q&A which allowed collaboration and continued learning. Tal did a fantastic job of motivating our members to finish the semester on a good note and finish our final capstone projects.