Corporate Finance I: Measuring and Promoting Value Creation from Coursera

In this course you will learn how to use key finance principles to understand and measure business success and to identify and promote true value creation. You will learn how to use accounting information to form key financial ratios to measure a company’s financial health and to manage a company's short-term and long-term liquidity needs. You will also learn how to use valuation techniques to make sound business investment and acquisition decisions. Finally, you will learn how to incorporate risk and uncertainty into investment decisions and how to evaluate the performance of existing investments.

Upon successful completion of this course you will be able to:

• Understand how companies make investment decisions that create value for shareholders

• Use accounting statements to measure the financial health of a company

• Forecast and manage a company’s short- and long-term liquidity needs

• Measure the contribution of a new project or acquisition to shareholder value

• Incorporate risk into investment decisions using the appropriate discount rates

• Evaluate the performance of a company or divisions of a company

This course was previously entitled Financial Evaluation and Strategy: Corporate Finance. The course received an average rating of 4.7 out of 5 based on 177 reviews over the period of September 2015 through August 2016. A detailed breakdown of ratings and reviews received for the prior version of the course, which is identical in content to the current course, is provided in the course orientation page.

This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.

What's inside

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.

Module 1: The Objective and Language of Corporate Finance

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.

Module 2: Financial Planning

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.

Module 3: Making Investment Decisions

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).

Module 4: Mergers and Acquisitions, Risk, and Performance Evaluation

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.

Course Conclusion

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Develops skills and knowledge that are core for corporate finance roles such as financial analysts, financial managers, and investment bankers

Taught by Heitor Almeida and Stefan Zeume, who are known for their work in corporate finance

Builds a solid foundation in corporate finance principles for beginners

Examines key financial ratios to measure the financial performance of a company

Teaches the use of valuation techniques to make investment and acquisition decisions

Covers topics such as financial planning, investment decisions, and mergers and acquisitions

Reviews summary

Practical course on corporate finance

Learners say this practical course on corporate finance features engaging assignments that are based on real-world scenarios.

Engaging assignments apply theories to real-world scenarios.

"The strength of this course in corporate finance is the application of acquired knowledge to real cases of multinationals with recent data."

Consider earlier coverage of financial valuation.

"I think Course 5 & 6 should be placed before Course 3 & 4 because financial valuation come before investment."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Corporate Finance I: Measuring and Promoting Value Creation with these activities:

Review 'Corporate Finance' by Ross, Westerfield, & Jordan

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Review this comprehensive textbook to build a foundational understanding of corporate finance concepts, which will support understanding throughout the course.

View Fundamentals of Corporate Finance on Amazon

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Identify key concepts in each chapter.
Summarize the main points of each section.
Review practice problems and solutions.

Analyze historical financial ratios

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Practice calculating and interpreting financial ratios to understand how companies have performed in the past and identify potential areas for improvement.

Browse courses on Financial Ratios

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Gather financial data for several companies.
Calculate key financial ratios.
Compare ratios to industry benchmarks.
Identify trends and draw conclusions.

Discuss case studies with classmates

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Engage in discussions with peers to explore different perspectives and strengthen your understanding of complex financial concepts.

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Form a study group with classmates.
Select a case study related to the course material.
Analyze the case study individually.
Meet with the study group to discuss your analyses and insights.

Four other activities

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Participate in a mock investment competition

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Apply your knowledge of investment principles in a simulated environment, making investment decisions and evaluating performance to enhance your practical skills.

Browse courses on Investment Analysis

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Join or form a team for the competition.
Research and analyze potential investments.
Develop an investment strategy and portfolio.
Monitor and adjust your portfolio over the course of the competition.

Walk through financial modeling examples

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Follow guided tutorials to develop practical skills in financial modeling, enabling you to analyze and make informed investment decisions.

Browse courses on Financial Modeling

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Find online tutorials or courses on financial modeling.
Choose a financial model that aligns with your interests.
Step through the model, understanding each input and calculation.
Analyze the results and draw conclusions.

Develop a financial plan for a small business

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Create a comprehensive financial plan for a small business, applying the concepts and techniques learned in the course to solve real-world financial challenges.

Browse courses on Financial Planning

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Identify a small business to work with.
Gather financial data and conduct industry research.
Develop financial projections and scenarios.
Create a financial plan that outlines strategies and recommendations.

Write a blog post on a current event in corporate finance

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Research and write a blog post on a relevant topic in corporate finance, demonstrating your understanding and ability to communicate complex concepts.

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Identify a recent event or news story related to corporate finance.
Research the event and gather relevant information.
Develop a thesis statement and outline for your blog post.
Write the blog post clearly and concisely, supporting your arguments with evidence.

Career center

Learners who complete Corporate Finance I: Measuring and Promoting Value Creation will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts use data analysis to make informed decisions on behalf of companies, government agencies, hedge funds, and individuals. They use complex mathematical modeling to make stock recommendations or advise on investment decisions, which makes this course's emphasis on investment valuation tools and techniques highly relevant. This course may also provide a foundation for the Chartered Financial Analyst (CFA) certification, which is highly respected in this industry.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers are financial advisors who provide financial services to corporations related to capital-raising, mergers, and acquisitions. They also help companies raise money through the issuance of equity and debt instruments, and they lead financial transactions and deals. Understanding investment valuation and the relevant tools is a core part of the role, which is why this course may be especially useful.

See salaries and explore the career path for Investment Banker

Private Equity Investor

Private Equity Investors manage funds that invest in private companies with the goal of improving the companies and increasing profitability. This course's focus on investment valuation and making investment decisions will help you understand how to find value in private companies, and it may also help prepare you for the Chartered Alternative Investment Analyst (CAIA) designation, which is highly sought-after in this field.

See salaries and explore the career path for Private Equity Investor

Venture Capitalist

Venture Capitalists provide funding to early-stage, high-growth companies with the goal of achieving high returns on investment. This course may be useful for building a foundation in investment valuation and analysis, which is essential for identifying worthwhile companies and negotiating deals.

See salaries and explore the career path for Venture Capitalist

Portfolio Manager

Portfolio Managers make investment decisions for individuals and organizations, managing investment portfolios and making recommendations based on financial analysis and market research. This course can help you build a strong foundation in investment valuation and risk management, which are essential skills for Portfolio Managers at all levels.

See salaries and explore the career path for Portfolio Manager

Corporate Finance Manager

Corporate Finance Managers oversee the financial planning and management of a company, including budgeting, capital allocation, and mergers and acquisitions. This course may be helpful for understanding the financial concepts and valuation techniques that are necessary for success in this role.

See salaries and explore the career path for Corporate Finance Manager

Financial Risk Manager

Financial Risk Managers assess and manage financial risks for companies, identifying potential risks and developing strategies to mitigate them. This course will provide foundational knowledge in risk management and the Weighted Average Cost of Capital (WACC), which can be extremely valuable to a Financial Risk Manager.

See salaries and explore the career path for Financial Risk Manager

Financial Advisor

Financial Advisors provide financial advice and guidance to individuals and families, helping them plan for retirement, invest their money, and manage their finances. This course may be especially helpful for understanding how to measure a company's financial health and make investment recommendations.

See salaries and explore the career path for Financial Advisor

Accountant

Accountants are responsible for recording, summarizing, and reporting financial transactions of a business. They prepare financial statements and ensure that financial records are accurate and comply with regulations. This course may be beneficial in developing a deeper understanding of financial ratios and accounting principles.

See salaries and explore the career path for Accountant

Financial Planner

Financial Planners assist individuals and families in creating and implementing financial plans that meet their specific goals. This course may be useful for acquiring knowledge of financial planning concepts, including investment valuation and risk management.

See salaries and explore the career path for Financial Planner

Business Analyst

Business Analysts analyze business processes and identify opportunities for improvement. They may also be involved in developing and implementing new systems and procedures. While not directly related to corporate finance, this course may be useful for building a solid foundation in financial analysis and data-driven decision-making.

See salaries and explore the career path for Business Analyst

Business Consultant

Business Consultants provide advice and guidance to businesses on a variety of topics, including finance, strategy, and operations. While not directly related to corporate finance, this course may be useful for developing a broader understanding of business principles and financial analysis.

See salaries and explore the career path for Business Consultant

Investment Analyst

Investment Analysts conduct research and analysis on investments and make recommendations to clients. This course may be useful for building a foundation in investment valuation and analysis, which is essential for making well-informed investment decisions.

See salaries and explore the career path for Investment Analyst

Financial Controller

Financial Controllers are responsible for managing the financial operations of a company, including budgeting, cash flow, and financial reporting. While not directly related to corporate finance, this course may provide a foundation in financial analysis and reporting.

See salaries and explore the career path for Financial Controller

Credit Analyst

Credit Analysts assess the creditworthiness of individuals and businesses. They review financial statements and other information to determine the risk of default and make recommendations on whether to extend credit. This course may be useful for developing a deeper understanding of financial analysis and credit risk assessment.

See salaries and explore the career path for Credit Analyst