Decision-Making and Scenarios from Coursera

What's inside

Syllabus

Evaluation Criteria: Net Present Value

This module was designed to introduce you to the many potential criteria for selecting investment projects, and to explore the most effective of these criteria: Net Present Value (NPV). Through the use of concrete examples, you'll learn the key components of Net Present Value, including the time value of money and the cost of capital, the main utility of NPV, and why it is ultimately more accurate and useful for evaluating projects than other commonly used criteria. By the end of this module, you'll be able to explain why net present value analysis is the appropriate criteria for choosing whether to accept or reject a project, and why other criteria, such as IRR, payback, ROI, etc. may not lead to decisions which maximize value.

Evaluating Projects

In this module, you'll learn how to evaluate a project with emphasis on analyzing the incremental after-tax cash flows associated with the project. You'll work through a concrete example using alternative scenarios to test the effectiveness of this method. You'll also learn why only future cash flows are relevant, why to ignore financial costs, include all incidental effects, remember working capital requirements, consider the effect of taxes, forget sunk costs, remember opportunity costs, use expected cash flows, and perform sensitivity analysis. By the end of this module, you'll be able to evaluate projects more thoroughly and effectively, with emphasis on how to model the change in the company’s after-tax cash flows, so that you can make more profitable decisions.

Expressing Business Strategies in Financial Terms

This module was designed to give you the opportunity to learn how business activities, transactions and events are translated into financial statements, including balance sheets, income statements, and cash flow statements. You'll also learn how these three statements are linked to each other, and how balance sheets and income statements can help forecast the future cash flow statements. By the end of this module, you'll be able to explain how accounting systems translate business activities into financial terms, and how to use this to better forecast future cash flows, so that you can express your business strategies in these financial terms, and show "the bottom line" for your proposed plan of action.

New Product Value

In this module, you'll apply what you’ve been learning to an analysis of a new product venture. You’ll learn how to map out a plan of the business activities, transactions and events that need to happen to implement the new venture, including their timing. You'll also learn how to set up a spreadsheet to help with forecasts, and to re-calculate things automatically as we re-think our plans. You'll see how to forecast out the implied financial statements, and calculate the Net Present Value (NPV). By the end of this module, you'll be able to use spreadsheets to explore different risks a venture may face, and analyze the implications of these scenarios for NPV, so that you can make the most profitable, data-driven decision possible.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Examines financial terms and risks, which are key principles of business and finance

Provides concrete examples and case studies to reinforce learning

Introduces financial modeling with NPV, a widely-used technique in the industry

Provides opportunities to apply knowledge to real-world business scenarios

Taught by Wharton professors, known for their expertise in finance and business

Reviews summary

Deeply engaging decision science

Learners say that this course is highly recommended as it is highly engaging, informative, and provides great information and excellent examples. Students suggest that completing this course may lead to better and more profitable business decisions.

Lots of great content

"Great course. Excellent examples. Tons of great information shared."

"Great thought provoking informative course on making better and more profitable business decisions utilizing various scenarios."

Professors are experts

"The Wharton professors presenting are clearly knowledgeable about the subject matter."

Better business decisions

"Great thought provoking informative course on making better and more profitable business decisions utilizing various scenarios."

Invaluable scenarios

"Great course. Excellent examples"

"Tons of great information shared."

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 Decision-Making and Scenarios with these activities:

Review basic accounting principles

Show steps

Review the fundamental concepts of accounting, such as debits and credits, the balance sheet, and the income statement, to strengthen your understanding of financial modeling.

Browse courses on Accounting Basics

Show steps

Read introductory accounting materials (e.g., textbooks, articles, online resources).
Solve practice problems or take online quizzes to test your understanding of basic concepts.
Attend a workshop or seminar on accounting basics.

Compile a glossary of financial terms and concepts

Show steps

Create a comprehensive glossary of key financial terms and concepts covered in the course, including definitions, examples, and real-world applications. This resource will serve as a valuable reference tool for future use.

Show steps

Identify and list important financial terms and concepts from course materials.
Define each term or concept concisely and clearly.
Include examples or real-world applications to illustrate the meaning.

Review Fundamentals of Corporate Finance

Show steps

Review the basics of corporate finance. This book will describe the principles and practice of corporate finance from the perspective of managers and investors.

Show steps

Read Chapter 1: Introduction
Read Chapter 2: The Financial System

Ten other activities

Expand to see all activities and additional details

Show all 13 activities

Watch Videos on Financial Modeling

Show steps

Expand your knowledge of financial modeling by watching videos from experts.

Browse courses on Financial Modeling

Show steps

Watch a video on how to build a financial model in Excel
Watch a video on how to use financial modeling to make better investment decisions

Learn how to use Excel for financial modeling

Show steps

Become proficient in using Excel's financial functions and tools, such as NPV, IRR, and data tables, to enhance your ability to create and analyze financial models.

Show steps

Enroll in an online course or workshop on Excel for financial modeling.
Follow tutorials on specific Excel functions and techniques.
Practice using Excel to solve financial modeling problems.

Solve NPV and IRR Practice Problems

Show steps

Practice applying NPV and IRR to evaluate investment projects. This will help you understand how to use these techniques to make better investment decisions.

Show steps

Solve 5 NPV practice problems
Solve 5 IRR practice problems

Attend a Financial Modeling Workshop

Show steps

Learn from experts in the field of financial modeling by attending a workshop.

Browse courses on Financial Modeling

Show steps

Research financial modeling workshops
Register for a workshop

Join a study group or online forum to discuss course concepts

Show steps

Engage with other students to discuss course concepts, ask questions, and share insights. This collaborative learning experience can deepen your understanding and identify areas where you need additional support.

Show steps

Join an existing study group or online forum related to the course.
Participate actively in discussions and ask thoughtful questions.
Share your own insights and perspectives with the group.

Volunteer at a non-profit organization focused on financial literacy

Show steps

Gain practical experience in applying financial modeling concepts to real-world scenarios while making a positive impact in your community. This volunteering opportunity will enhance your understanding and provide valuable hands-on experience.

Show steps

Research non-profit organizations that focus on financial literacy.
Identify volunteer opportunities that align with your interests and skills.
Reach out to the organization to inquire about volunteering.

Write a Blog Post on a Financial Topic

Show steps

Share your knowledge of finance by writing a blog post on a financial topic. This will help you to reinforce your understanding of the concepts and to communicate them effectively to others.

Browse courses on Financial Literacy

Show steps

Write a blog post
Choose a financial topic
Research the topic

Develop a Business Plan for a New Venture

Show steps

Demonstrate your ability to apply the concepts of financial analysis and business planning by developing a business plan.

Browse courses on Business Planning

Show steps

Identify a business opportunity
Develop a business model
Create financial projections

Develop a financial model for a proposed business venture

Show steps

Apply your knowledge of financial modeling to create a comprehensive model that forecasts the financial performance of a hypothetical business venture, allowing you to assess its viability and make informed decisions.

Show steps

Identify a hypothetical business venture to model.
Gather relevant financial data and assumptions.
Build a financial model in Excel or other financial modeling software.
Analyze the results of the model and draw conclusions about the venture's financial feasibility.

Analyze a Real-World Investment Opportunity

Show steps

Put your skills to the test by analyzing a real-world investment opportunity. This will give you practical experience in applying the concepts of financial analysis and decision-making.

Browse courses on Investment Analysis

Show steps

Identify an investment opportunity
Analyze the financial statements
Evaluate the investment opportunity using NPV and IRR

Career center

Learners who complete Decision-Making and Scenarios will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts apply their understanding of financial markets and data to analyze a company's or individual's financial health. This course can be particularly valuable, as it helps build a foundation in analyzing financial data to make sound investment decisions. By mastering the techniques taught in this course, you will be able to assess the risks and returns of investments more effectively, thus contributing to more profitable outcomes for your clients or organization.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers provide financial advice to corporations and governments, helping them raise capital and make strategic decisions. This course can be highly beneficial as it offers tools and techniques to evaluate investment projects and make sound financial decisions. Leveraging the knowledge gained from this course, you'll be able to better assess the viability of investment opportunities and provide more informed advice to your clients.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio Managers make investment decisions for individuals and institutions, managing their financial portfolios. This course can be a valuable asset, providing you with the skills to evaluate investment opportunities, allocate assets, and manage risk. By applying the principles taught in this course, you can enhance your ability to build and manage successful investment portfolios for your clients.

See salaries and explore the career path for Portfolio Manager

Financial Planner

Financial Planners help individuals and families manage their financial resources and plan for the future. This course can be beneficial as it provides a framework for evaluating financial scenarios and making informed decisions. By mastering the concepts covered in this course, you'll be able to better assist your clients in achieving their financial goals.

See salaries and explore the career path for Financial Planner

Risk Manager

Risk Managers identify, analyze, and mitigate potential risks for businesses and organizations. This course can be valuable as it provides techniques to assess and manage financial risks. By applying the knowledge gained from this course, you'll be better equipped to develop and implement effective risk management strategies, enhancing the financial stability of your organization.

See salaries and explore the career path for Risk Manager

Auditor

Auditors examine financial records and ensure compliance with regulations, providing assurance on the accuracy and reliability of financial information. This course can be beneficial as it offers a foundation in financial analysis and accounting principles. By understanding the techniques taught in this course, you'll be better able to evaluate financial statements, detect irregularities, and ensure the integrity of financial reporting.

See salaries and explore the career path for Auditor

Consultant

Consultants provide expert advice to businesses and organizations on various aspects of their operations, including financial management. This course can be helpful as it equips you with analytical skills and problem-solving techniques. By leveraging the knowledge gained from this course, you'll be better able to analyze business scenarios, identify areas for improvement, and develop data-driven recommendations for your clients.

See salaries and explore the career path for Consultant

Data Analyst

Data Analysts collect, clean, and analyze data to identify trends and patterns. This course can be a valuable asset as it provides a foundation in data analysis and modeling techniques. By mastering the concepts taught in this course, you'll be able to effectively analyze and interpret data, derive meaningful insights, and contribute to data-driven decision-making within your organization.

See salaries and explore the career path for Data Analyst

Business Analyst

Business Analysts identify and analyze business needs and develop solutions to improve efficiency and performance. This course can be beneficial as it provides a framework for evaluating business scenarios and making data-driven decisions. By understanding the techniques taught in this course, you'll be better equipped to gather and analyze data, identify areas for improvement, and develop effective solutions for your organization.

See salaries and explore the career path for Business Analyst

Project Manager

Project Managers plan, execute, and deliver projects within specified constraints. This course can be helpful as it offers a structured approach to project evaluation and risk management. By applying the knowledge gained from this course, you'll be better able to analyze project scenarios, assess potential risks, and develop effective strategies to ensure successful project outcomes.

See salaries and explore the career path for Project Manager

Actuary

Actuaries use mathematical and statistical techniques to assess and manage financial risks and uncertainties. This course can be a valuable foundation as it provides a strong understanding of financial modeling and risk analysis. By mastering the concepts taught in this course, you'll be better equipped to develop and implement actuarial models, evaluate risk profiles, and make informed decisions in the face of uncertainty.

See salaries and explore the career path for Actuary

Economist

Economists study the production, distribution, and consumption of goods and services. This course can be beneficial as it offers a framework for analyzing economic data and trends. By understanding the principles taught in this course, you'll be better able to interpret economic indicators, forecast economic conditions, and develop informed strategies for businesses and organizations.

See salaries and explore the career path for Economist

Statistician

Statisticians collect, analyze, interpret, and present data. This course can be a valuable foundation as it provides a strong understanding of statistical methods and data analysis techniques. By mastering the concepts taught in this course, you'll be better equipped to design and conduct statistical studies, analyze data, and draw meaningful conclusions from your findings.

See salaries and explore the career path for Statistician

Operations Research Analyst

Operations Research Analysts use mathematical and analytical techniques to improve the efficiency and effectiveness of operations. This course can be beneficial as it offers a foundation in modeling and optimization techniques. By understanding the principles taught in this course, you'll be better able to analyze operational scenarios, identify areas for improvement, and develop data-driven solutions to optimize your organization's performance.

See salaries and explore the career path for Operations Research Analyst

Quantitative Analyst

Quantitative Analysts use mathematical and statistical models to analyze financial data and make investment decisions. This course can be a valuable foundation as it provides a strong understanding of financial modeling and data analysis techniques. By mastering the concepts taught in this course, you'll be better equipped to develop and implement quantitative models, analyze financial data, and make informed investment decisions.

See salaries and explore the career path for Quantitative Analyst