- Finance (s)
- Brand Management (r)
- Financial Reporting and Analysis (r)
- Health Sector Management (r)
- Investment Banking (c)
Target Audience and Course Mission
This course covers financial decision making inside non-financial firms. While we will always have to consider the perspective of financial markets and financial institutions as “constraints” for our decisions, and while financial markets provide some of the data we require (for example: the cost of debt and equity capital), the goal is to learn how to make optimal decisions from the perspective of non-financial firms. In this course, this also includes financial decisions inside small firms and even inside a non-profit firm. We take the perspective of various decision makers: not just the CFO, but also other executives including the CEO, COO, and divisional and functional heads. The course is mostly case based, and we will learn how to use financial tools including Shareholder (and Stakeholder) Value Maximization, Capital Budgeting, Cash & Working Capital Management, Real Options, Hedging, Lease-versus-Buy Decisions, Simulations, Exchange Rate Risk Management, etc. to allow firms to accomplish their goals. Since the decisions of functional managers (Marketing, HR, Operations, etc.) have to satisfy the financial goals and constraints of the firm, we will explicitly examine their decisions and their relationship to value maximization and financial risk management. We will also examine how firms can avoid “running out of money” while they grow and execute strategic plans.
In addition to serving those students who are looking for careers in non-financial firms, this course also teaches those who will work in financial institutions and financial markets to better understand the drivers of corporate decisions that represent the “demand” side for financial services. While the course will attract a number of finance specialists, it is somewhat less technical and not designed specifically for bankers & investment managers compared to other finance courses. The toolsets covered and the case-based approach will appeal to non-finance specialists as well as those who will have corporate clients in the future. With that said, a basic familiarity of Microsoft Excel and some working memory of some of the content of Finance 1 and Finance 2 from the core will be useful, and a bit of Accounting and Stats residual knowledge cannot hurt. The first class will review many of these concepts and the level should be manageable for all who passed the core.
12 regular sessions
After completing this course, students will be able to:
- Develop short-term, medium-term, and long-term financial forecasts for a business;
- Analyze and explain the management of the operational financial resources of a firm (net working capital management, operational liquidity, as well as the cash cycle);
- Measure and manage seasonal and cyclical uncertainty and operational financial risk;
- Develop, analyze, and execute long-term corporate investment decisions (projects, replacement/expansion decisions, international investments, strategic investments, etc.);
- Understand aspects of Project Finance including large-scale infrastructure investments;
- Use real-options techniques to evaluate investments that incorporate flexibility and future information uncertainty; and
- Use simulations to model and manage multiple risk in corporate investments.
Evaluation and Grade Distribution
|One Group Case Analysis and Presentation||30%|
|One Short Group Video on a Technical Topic||10%|
|2 Short 60-Minute Quizzes||30%|
|One Short Peer-Review Memo||10%|
The 1st year finance textbook is sufficient as background reading. There will also be a case reading package.