Corporate finance: Know your numbers 2 from Coursera

What's inside

Syllabus

Financial management decisions

In Week 1 we have three main objectives. Firstly, we review the main types of decisions made when management and owners allocate capital within a business. Secondly, we will discuss why it is important to bring the shareholder perspective to these decisions. Thirdly, to introduce key terminology around the business life cycle and different types of ownership models, including venture capital, private equity and listed companies.

Time value of money and discounted cash flow analysis

This week we will consider the time value of money. We will learn how to put a numerical value on the difference between money today and money at a specific time in the future. We will look at simple and compound interest, present and future value of money, annuities and perpetuities. Understanding the time value of money will help us to make investment decisions or, as corporate finance managers, decisions about whether to buy or sell an entire business or to invest in an advertising campaign. It’s an important skill and will require you to work through financial models that involve some equations and numbers. Knowledge of the time value of money will make you more confident dealing with financial transactions and better understand how the world of finance operates.

Valuation of financial securities

This week we will consider applying our knowledge of interest rates to some real world problems. We will learn how to estimate the value of an enterprise. We will learn about capital budgeting techniques to help us decide intelligently which projects that are available to a business should be pursued.The techniques we will learn include Net Present Value, Internal Rate of Return, Pay Back Period, and the Money Multiple Method. We will also discuss briefly the capital asset pricing model, or CAPM, which enables us to estimate the cost of capital for a business, which is the return demanded by the providers of the capital, that is, the investors.

Estimating enterprise value

In week 4 we extend the valuation tools developed in the course so far to evaluate a series of new business investment opportunities. We will start off by considering the value of an existing, established business. We have already seen how we can use the traditional Operating Free Cash Flow (OFCF)/Weighted Average Cost of Capital (WACC) model to estimate the Enterprise value of a business. We will now use an alternate model, the Residual Income model, for the same purpose. Once we are comfortable with the various different business valuation models, we will turn our attention to an assessment of the risk profile of the investment. We will firstly differentiate between the risks that are being allowed for in the discount rate, or “systematic risks”, and those that are specific to the project being considered, or “idiosyncratic risks”. Towards the end, we will look at tools that help assess the idiosyncratic risk of the investment.

Application of financial valuation tools

This week, we will apply the valuation tools we have developed in the course so far to improve our existing business. We start by revisiting the NPV rule for individual project investment decisions, and then extend that to think about how individual projects impact value at the Enterprise level. We then consider a range of specific applications for our project evaluation tools, including capital rationing, asset replacement, and outsourcing decisions. After this we will turn our attention to the question of how well our existing businesses are performing. We will start by introducing a range of performance measurement tools. This will help us to develop a framework for both recognising how well we are currently performing, and selecting from a series of deliberate choices to improve that performance.

Putting it all together - Applying financial valuation techniques

This week is all about revision. There’s not much new content. We’ll focus on applying the theories to a small example, an imaginary online business, and cover some of the more difficult techniques including annuities, perpetuities, Net Present Value, and how to turn profits into cash flows.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Develops a foundational understanding in financial management, which is standard in business

Demonstrates how to prepare for financial management from a leadership perspective

Provides practice in assessing and planning for financial performance

Emphasizes the significance of financial management for organizational success

Taught by David Pitt and Keith Woodward, who are recognized for their work in financial management

May require additional software or tools that learners may have to purchase

Reviews summary

Corporate finance: know your numbers 2

According to students, Corporate Finance: Know Your Numbers 2 is a course that provides critical financial skills and explains Capital Budgeting, Time Value of Money, Net Present Value, and Internal Rate of Return concepts clearly. Students mentioned that the case studies are helpful but some have problems with quizzes that have errors. Students largely disagree that the course material is easy to understand and that the instructors are helpful.

Students say the material is practical and helpful for those who want to learn about financial skills.

"Course topics are so much important"

"Valuable course offers critical financial skills"

Students appreciate when the course provides clear explanations.

"Excellent Course!! Thank you!"

"The course is tough but worth the time."

"Very informative, instructors are very precise."

Students complain the quizzes are poorly made.

"Quiz is too difficult and there are no hints."

"The quizzes are absolutely soul-destroying."

"They are filled with bugs and errors..."

Students remark that the course material is complex and hard to follow.

"The material is difficult (but this is because the concepts themselves are difficult to grasp), but it's made more difficult by the fact that things aren't demonstrated or explained well."

Students indicate that instructors do not provide enough help.

"No response from instructors with regard to an issue with Week 3 quiz"

"A total absence of help from the teaching staff"

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: Know your numbers 2 with these activities:

Review valuation techniques

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Refresh your knowledge of valuation techniques such as NPV, IRR, and DCF to enhance your understanding of financial management.

Browse courses on Financial Valuation

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Go over the different valuation techniques
Solve practice problems on valuation

Watch tutorials on financial analysis

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Watch video tutorials to learn about different financial analysis techniques.

Browse courses on Financial Analysis

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Find tutorials on financial analysis topics that interest you
Follow the steps and examples provided in the tutorials

Time value of money exercises

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Complete practice problems on time value of money to improve your understanding and problem-solving abilities.

Browse courses on Time Value of Money

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Solve exercises on present value, future value, and annuities
Calculate time value of money using different interest rates and time periods

Four other activities

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Create a financial plan

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Develop a financial plan that outlines your financial goals, strategies, and timeline to achieve them.

Browse courses on Financial Planning

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Identify your financial goals
Research and select investment options
Create a budget and stick to it

Join a study group or attend a workshop

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Join a study group or attend a workshop to connect with other students or professionals in the field of financial management.

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Find a study group or workshop that aligns with your interests
Participate actively in discussions and share your knowledge

Write a blog post on a financial topic

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Write a blog post on a financial topic to enhance your understanding and share your knowledge with others.

Browse courses on Financial Literacy

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Choose a financial topic that interests you
Research the topic and gather information
Write a blog post that is informative and engaging

Develop a financial model

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Build a financial model to predict future financial performance and make informed decisions.

Browse courses on Financial Modeling

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Identify the purpose and scope of the financial model
Gather and analyze financial data
Develop assumptions and forecast future financial performance

Career center

Learners who complete Corporate finance: Know your numbers 2 will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts who are responsible for advising companies on financial performance, investments, and acquisitions may be interested in this course. The course description states that you will learn how to assess an organization's financial health and evaluate business and investment opportunities for an organization. This course may help you build a foundation for the skills and theories you will need to be successful in your role as a Financial Analyst.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers who assist clients in raising capital and providing financial advice may find that the concepts in this course are directly relevant to their work. The course description states that you will learn how to plan for future financial performance and the financing of operations. This course may equip you with the knowledge needed to make informed decisions in your role as an Investment Banker.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio Managers who are in charge of making investment decisions for clients may be interested in the topics covered in this course. The course description states that you will learn how to apply your knowledge of interest rates to real-world problems and estimate the value of an enterprise. This course may help you understand how to make informed investment decisions and maximize returns for your clients.

See salaries and explore the career path for Portfolio Manager

Corporate Finance Manager

Corporate Finance Managers who oversee the financial activities of an organization may find that this course provides a foundation of the theory and practice of financial management. The course description states that you will learn about financial management decisions. This course may help you make informed decisions that drive the success of the organization.

See salaries and explore the career path for Corporate Finance Manager

Financial Planner

Financial Planners who assist clients with financial planning and investment management may be interested in the topics covered in this course. The course description states that you will learn how to bring the shareholder perspective to decisions, which is essential for developing a comprehensive financial plan.

See salaries and explore the career path for Financial Planner

Auditor

Auditors who assess the financial statements of organizations may be interested in this course to gain a deeper understanding of the concepts covered in company financial statements. The course description states that you will learn how to assess an organization's financial health. This course may help you build a foundation for the skills and theories you will need to be successful as an Auditor.

See salaries and explore the career path for Auditor

Treasury Analyst

Treasury Analysts who are responsible for managing an organization's cash flow and investments may find that the topics covered in this course directly relate to their responsibilities. The course description states that you will learn how to plan for future financial performance and the financing of operations. This course may help you build a foundation for the skills and theories you will need to be successful as a Treasury Analyst.

See salaries and explore the career path for Treasury Analyst

Risk Manager

Risk Managers who identify and mitigate financial risks for organizations may be interested in this course to gain a deeper understanding of the concepts of financial risk. The course description states that you will learn how to differentiate between the risks that are being allowed for in the discount rate, or “systematic risks”, and those that are specific to the project being considered, or “idiosyncratic risks”. This course may help you develop a comprehensive understanding to succeed in your role as a Risk Manager.

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Fund Manager

Fund Managers who manage investment funds may find that the concepts in this course directly relate to their work. The course description states that you will learn how to estimate the value of an enterprise and apply your knowledge of interest rates to real-world problems. This course may help you build a foundation for the skills and theories you will need to be successful as a Fund Manager.

See salaries and explore the career path for Fund Manager

Compliance Officer

Compliance Officers who ensure that organizations comply with financial regulations may find that this course provides a foundation in financial management. The course description states that you will learn about financial management decisions. This course may equip you with the knowledge needed to make informed decisions in your role as a Compliance Officer.

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Credit Analyst

Credit Analysts who evaluate the creditworthiness of borrowers may be interested in the topics covered in this course. The course description states that you will learn how to apply your knowledge of interest rates to real-world problems and estimate the value of an enterprise. This course may help you understand how to make informed decisions and assess the risk of borrowers.

See salaries and explore the career path for Credit Analyst

Equity Research Analyst

Equity Research Analysts who provide investment recommendations on companies to clients may find that the concepts in this course are directly relevant to their work. The course description states that you will learn how to estimate the value of an enterprise and apply your knowledge of interest rates to real-world problems. This course may equip you with the knowledge needed to make informed decisions in your role as an Equity Research Analyst.

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Business Development Manager

Business Development Managers who are responsible for developing new business opportunities may find that the topics covered in this course are directly relevant to their work. The course description states that you will learn how to evaluate business and investment opportunities for an organization. This course may equip you with the knowledge needed to make informed decisions in your role as a Business Development Manager.

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Management Consultant

Management Consultants who provide advice to organizations on strategy, operations, and finance may be interested in the topics covered in this course. The course description states that you will learn about financial management decisions. This course may help you build a foundation for the skills and theories you will need to be successful as a Management Consultant.

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Financial Advisor

Financial Advisors who provide financial advice to clients may find that the concepts in this course directly relate to their work. The course description states that you will learn how to plan for future financial performance and the financing of operations. This course may equip you with the knowledge needed to make informed decisions in your role as a Financial Advisor.

See salaries and explore the career path for Financial Advisor