Corporate Finance I: Measuring and Promoting Value Creation

Go to Course: https://www.coursera.org/learn/corporate-finance-measure-success

Introduction

# Course Review: Corporate Finance I: Measuring and Promoting Value Creation In today’s business landscape, understanding the intricacies of corporate finance is integral to navigating company success and promoting value creation. The Coursera course "Corporate Finance I: Measuring and Promoting Value Creation" offers a comprehensive introduction to fundamental principles of finance, making it a highly recommended course for aspiring finance professionals, business managers, and students looking to enrich their understanding of corporate finance. ## Course Overview "Corporate Finance I: Measuring and Promoting Value Creation" provides learners with the essential tools needed to analyze financial statements, make sound investment decisions, and evaluate the health of a business. The course meticulously covers finance concepts, imparting both theoretical knowledge and practical applications through real-world examples and financial data. ### Syllabus Breakdown 1. **Course Orientation** - The course begins with an introduction to the learning environment, allowing students to become familiar with the system, their instructor, and their classmates. This module lays the groundwork for a collaborative and engaging learning experience. 2. **Module 1: The Objective and Language of Corporate Finance** - This foundational module introduces the concept of shareholder value, explaining the benefits and downsides of maximizing stock prices. Students learn to calculate key financial ratios related to liquidity, leverage, and profitability. By analyzing real-world companies’ accounting statements, learners gain insights into assessing financial health and conducting competitive analyses. 3. **Module 2: Financial Planning** - The second module focuses on forecasting and managing short-term investments. Learners will analyze financial statements of real companies to project external financing and understand how working capital impacts these decisions. The application of financial modeling techniques prepares students for real-life financial planning scenarios. 4. **Module 3: Making Investment Decisions** - Investment evaluation takes center stage in this module. Students learn to calculate Net Present Value (NPV) and Internal Rate of Return (IRR), essential metrics for assessing the viability of investment projects. The incorporation of real options into the analysis enriches learners' ability to evaluate investments like research and development projects strategically. 5. **Module 4: Mergers and Acquisitions, Risk, and Performance Evaluation** - The final module delves into the complexities of mergers and acquisitions. Learners will evaluate scenarios where mergers create shareholder value, distinguishing beneficial M&A activities from detrimental ones. The course covers the pricing of M&A deals and explores leveraged buyouts (LBOs). Additionally, students will learn how to incorporate risk assessment into investment valuation, calculating metrics like the weighted-average cost of capital (WACC). ### Conclusion The course concludes by summarizing the intricacies covered and integrating the learned principles into a cohesive understanding of corporate finance. ## Why You Should Enroll - **Practical Application**: The course emphasizes real-world applications, ensuring that the concepts learned are not just theoretical but can be directly applied in a professional setting. - **Comprehensive Curriculum**: The structured syllabus and progressively challenging modules build a solid foundation in corporate finance. - **Industry-Relevant Skills**: Mastery of financial ratios, investment analysis, and M&A will significantly enhance your resume, making you an attractive candidate in the competitive job market. - **Flexible Learning**: As an online course offered by Coursera, you can learn at your own pace, making it manageable alongside other commitments. In summary, "Corporate Finance I: Measuring and Promoting Value Creation" is an exceptional course for anyone looking to deepen their understanding of finance and its critical role in corporate decision-making. Whether you're a finance novice or looking to sharpen your skills, this course will equip you with the knowledge and confidence to contribute meaningfully to your organization's financial strategies. Don’t hesitate—enroll today and take a significant step toward mastering corporate finance!

Syllabus

Course Overview

In this module, you will become familiar with the course, your instructor, your classmates, and our learning environment. The orientation also helps you obtain the technical skills required for the course.

In Module 1, we will discuss the objectives of the corporation. We will introduce the concept of shareholder value and discuss the pros and cons of maximizing stock prices. We will then learn how to calculate financial ratios that measure concepts such as liquidity, leverage, and profitability. We will work with accounting statements and financial data from real world companies and learn how to use this data to measure the financial health of companies and make comparisons with competitors.

In Module 2, we will learn models that allow us to forecast and manage a company's short-term investments such as capital expenditures. We will forecast the future financial statements of a real world company and learn how to figure out how much external financing the company will need. We will then use real world examples to learn how short-term investments in working capital determine a company's need for short-term financing.

In Module 3, we will learn tools that allow us to measure the contribution of a new investment to shareholder value. We will learn how to calculate the net present value (NPV) of an investment and how to use the NPV to make a decision on whether to make the investment or not. We will also learn to calculate the rate of return (IRR) on an investment project and how to properly use the IRR in investment decisions. Finally, we will learn how to incorporate real options into investment analysis to be able to make decisions about investments such as R&D (research and development).

In Module 4, we will apply our investment valuation tools to understand when a merger between two companies creates shareholder value. We will learn to distinguish between good and bad reasons for companies to engage in mergers and acquisitions (M&A), and we will learn how to price an M&A deal. We will also learn the specific characteristics of leveraged buyouts (LBOs) and how they can create value for shareholders. We will then learn how to incorporate risk into investment valuation by changing discount rates. We will calculate the weighted-average cost of capital (WACC) for a real world company and learn how to use WACC to value investments and to measure the performance of the company or a division of the company.