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Introduction to Corporate Finance

This course provides a brief introduction to the fundamentals of finance, emphasizing their application to a wide variety of real-world situations spanning personal finance, corporate decision-making, and financial intermediation. Key concepts and applications include: time value of money, risk-return tradeoff, cost of capital, interest rates, retirement savings, mortgage financing, auto leasing, capital budgeting, asset valuation, discounted cash flow (DCF) analysis, net present value, internal rate of return, hurdle rate, payback period.

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What's inside

Syllabus

Week 1: Time Value of Money

Welcome to Introduction to Corporate Finance! This first module will introduce you to one of the most important foundational concepts in Finance, the time value of money. Before diving into the Video lectures, I encourage you to take a look at the brief pre-reading for the course. Specifically, have a look at “Big Picture Course Motivation,” for additional motivation and context for the course, “Time Value of Money Overview,” for a motivation and context for our first topic, and “Quiz Problem Answer Input.” This last note is particularly important to avoid confusion with the problem sets. Then, go to the Video Lectures and start learning Finance!

Week 2: Interest Rates

In this module, we wrap up the Time Value of Money topic with a discussion of inflation before moving on to our second topic, Interest Rates, and introducing our third topic, Discounted Cash Flow Analysis. By the end of this module, you should feel comfortable with discounting and compounding arbitrary cash flow streams in order to value different claims and make better financial decisions.

Week 3: Discounted Cash Flow Analysis

This module continues our discussion of discounted cash flow analysis by way of a capital budgeting case. (You might want to download or view the Excel file, “Tablet Case Spreadsheet.xlsx,” that I use in the lectures, but it is not necessary for understanding the material.) By the end of this module, you should feel comfortable valuing claims and making financing decisions in which the timing of the cash flows and compounding of interest is arbitrary (e.g., annual, semi-quarterly, monthly, etc.). Having worked through the problems, you should also be more comfortable with real world financial decision making related to retirement savings, home financing and refinancing, auto leases, and other scenarios.

Week 4: Return on Investment

This module closes out our discussion of discounted cash flow analysis and caps off the course with a discussion of return on investment. By the end of this module, you should feel comfortable with the notion of free cash flow and the ability to apply a set of forecast drivers to project free cash flows into the future. These are some of the elements of a basic financial model, which we will use to come to a decision about the tablet project and to analyze the assumptions behind our valuation.

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Introduces foundational concepts in finance including the time value of money, risk-return tradeoffs, valuation, and discounted cash flow analysis

Taught by Michael Roberts, a highly respected instructor in finance

Provides real-world applications of finance concepts in personal finance, corporate decision-making, and financial intermediation

Suitable for beginners seeking an introduction to the fundamentals of finance

Covers key concepts and applications in finance, including time value of money, risk-return tradeoffs, cost of capital, and valuation

Features video lectures, problem sets, and interactive materials to enhance understanding

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Reviews summary

Corporate finance fundamentals

Learners say Introduction to Corporate Finance is a tough but rewarding course that covers the simple but important equations and concepts of finance. Students mention that the course is daunting for those with no finance background. Reviews are overall positive and many students mention that everyone should take this course to protect themselves from living paycheck-to-paycheck. Many students also appreciate that the course puts concepts to use in real-life contexts.

Challenging but rewarding

"This is a tough class for learning finance."

"It is an altogether good course on solidifying an understanding of where the principles of finance come from, but definitely not for someone who has zero background of the field."

Concepts put to use in real life

"The course offered the simple but important equations and how to use them in real life context that comprise compounding."

"Everyone should take a course like this, even those that absolutely hate dealing with math or finance. Why? Because whether we're dealing with car loans, school loans, home mortgages, home lines of credit, credit cards, bank or checking accounts, bank or payday loans, insurance policies, retirement planning, stocks, bonds, mutual funds, IRAs, 401Ks, taxes, rising cost-of-living problems, etc. we will need to master the knowledge from this class to protect ourselves from living life paycheck to paycheck and ultimately dying broke."

Improved over time

"There are definitely some production issues with the first few videos and that the microphones in the room turned on so that I can hear every cough, sneeze, or shuffle of paper. However these issues to improve is the videos go on."

Daunting derivations

"Prof. Franklin's derivations for many of the formulas and conclusions presented in class are daunting for someone who does not have the appropriate mathematics background."

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 Introduction to Corporate Finance with these activities:

Review basic accounting concepts

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Revisit fundamental accounting concepts, such as balance sheets, income statements, and cash flow statements, to strengthen your foundation and enhance your understanding of financial analysis.

Browse courses on Accounting

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Review notes or textbooks on basic accounting principles
Complete practice exercises or online quizzes

Read Principles of Corporate Finance

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Familiarize yourself with the key concepts of corporate finance, such as time value of money, capital budgeting, and risk and return, which are essential for success in this course.

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Read chapters 1-3 of the book
Complete the end-of-chapter review questions
Take notes on key concepts and formulas

Value everyday financial decisions

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Apply the concept of time value of money to everyday financial decisions, such as saving for retirement or financing a car purchase, helping you understand its practical relevance.

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Calculate the future value of a savings deposit
Compare the present value of two different investment options
Determine the monthly payment on a car loan

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Design a financial plan for a small business

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Create a comprehensive financial plan for a small business, outlining financial goals, strategies, and a budget, which will enhance your understanding of corporate decision-making and financial management.

Browse courses on Capital Budgeting

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Define financial goals and objectives
Analyze the business's financial statements
Develop financial projections
Create a budget and monitor financial performance

Hold a group discussion on current financial news

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Participate in regular group discussions to analyze current financial news and market trends, fostering collaboration and deepening your understanding of real-world financial applications.

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Select a news article or financial event to discuss
Prepare talking points and research background information
Engage in active listening and contribute to the discussion

Learn about advanced financial modeling techniques

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Enroll in online tutorials or workshops to delve into advanced financial modeling techniques, such as sensitivity analysis, scenario planning, and Monte Carlo simulations, which will enhance your proficiency in financial analysis.

Browse courses on Discounted Cash Flow Analysis

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Identify an online tutorial or workshop on financial modeling
Follow the instructions and complete the exercises
Apply the techniques to real-world financial scenarios

Participate in a financial case competition

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Challenge yourself by participating in a financial case competition, where you will analyze real-world financial scenarios and present your recommendations, developing your problem-solving and communication skills.

Browse courses on Corporate Finance

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Identify a financial case competition
Form a team and research the case
Develop a financial analysis and recommendations
Present your findings to a panel of judges

Contribute to a financial open-source project

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Engage in hands-on learning by contributing to an open-source project related to finance, such as a financial data analysis library or a trading platform, gaining practical experience and enhancing your technical skills.

Browse courses on Finance

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Identify an open-source financial project
Familiarize yourself with the project's codebase
Make code contributions or improve documentation
Collaborate with other contributors

Career center

Learners who complete Introduction to Corporate Finance will develop knowledge and skills that may be useful to these careers:

Risk Manager

Risk Managers identify, assess, and mitigate financial risks for companies. They analyze financial data, develop risk management strategies, and implement controls to minimize the likelihood and impact of financial losses. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Risk Manager

Finance Manager

Finance Managers apply financial principles and analytical skills to assist companies in making sound financial decisions. They oversee and manage all aspects of the financial operations of a business, including the preparation of financial reports, the development of budgets, and the analysis of financial data. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Finance Manager

Auditor

Auditors examine and evaluate the financial records of companies to ensure that they are accurate and compliant with regulations. They analyze financial data, conduct risk assessments, and issue audit reports. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Auditor

Financial Analyst

Financial Analysts use their knowledge of finance to evaluate the financial performance of companies and make recommendations on investment decisions. They analyze financial data, conduct research, and develop financial models to assess the risk and return of investments. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers help companies raise capital and provide financial advice on mergers and acquisitions. They analyze financial data, develop financial models, and present investment recommendations to clients. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio Managers manage investment portfolios for clients, making decisions on which investments to buy and sell. They analyze financial data, conduct research, and develop investment strategies to maximize returns and minimize risks. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Portfolio Manager

Management Consultant

Management Consultants advise companies on how to improve their operations and performance. They analyze business processes, identify areas for improvement, and develop recommendations for change. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

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Tax Accountant

Tax Accountants prepare and file tax returns for individuals and businesses. They calculate taxes owed, advise clients on tax laws, and represent clients in audits. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Tax Accountant

Business Analyst

Business Analysts analyze business processes and identify areas for improvement. They develop and implement solutions to help businesses achieve their goals. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Business Analyst

Financial Planner

Financial Planners help individuals and families plan for their financial future. They provide advice on a variety of financial topics, including retirement planning, investment planning, and estate planning. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

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Data Analyst

Data Analysts collect, analyze, and interpret data to identify trends and patterns. They use their findings to make recommendations for businesses on how to improve their operations and performance. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

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Loan Officer

Loan Officers evaluate loan applications and determine the creditworthiness of borrowers. They also provide advice to borrowers on different types of loans and their terms. This course can help build a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

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Real Estate Agent

Real Estate Agents help people buy, sell, and rent homes. They provide advice on different types of properties and their prices. This course may be useful for building a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Real Estate Agent

Insurance Agent

Insurance Agents sell insurance policies to individuals and businesses. They provide advice on different types of insurance and their coverage. This course may be useful for building a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

See salaries and explore the career path for Insurance Agent

Stockbroker

Stockbrokers help people buy and sell stocks. They provide advice on different types of stocks and their prices. This course may be useful for building a foundation for success in this role by providing a comprehensive overview of the fundamentals of finance, including the time value of money, risk-return tradeoff, cost of capital, interest rates, and discounted cash flow analysis.

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Featured in The Course Notes

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Reading list

We've selected 36 books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Introduction to Corporate Finance.

Loose-Leaf for Principles of Corporate Finance

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Comprehensive and highly respected textbook on corporate finance. It provides a thorough overview of the field, with a focus on the latest developments in theory and practice.

Introduction to Corporate Finance

What's inside

Syllabus

Good to know

Save this course

Reviews summary

Corporate finance fundamentals

Activities

Career center

Featured in The Course Notes

Reading list

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