04.03.2023
I am a non-accountant manager taking steps to up my financial accounting game, I have taken accounting and finance courses before now, and I must confess this course exceeded my expectation. It is excellent.
Corporate Finance
with
Ivan Kitov
Learn through hands-on projects how corporate finance adds value to the company. We study the principles of corporate finance, including capital budgeting, cost of capital, working capital management, and ESG investing.
7 hours 79 lessons
Start course
79 High Quality Lessons
8 Practical Tasks
7 Hours of Content
Certificate of Achievement
Course Overview
The primary goal of corporate finance is to maximize shareholder value through capital budgeting, financing, and net working capital activities. Capital budgeting is an important part of the decision-making process companies go through when determining whether to invest in a particular long-term project or asset. Corporate finance deals with funding sources and capital structure. And lastly, the role of working capital management is to ensure that a company has the funds for day-to-day operations and that its assets are invested productively. This Corporate Finance course will guide you through the core principles of capital budgeting and how to determine the firm’s cost of capital. We calculate the Weighted Average Cost of Capital (WACC) and examine its main components. We show you how to find the cost of debt, equity, and preferred equity, interpret the Marginal Cost of Capital schedule, and estimate the cost of equity in developing countries. Our Corporate Finance course touches on several topics, including effective working capital management, primary and secondary sources of liquidity, and factors that influence a firm’s liquidity position. Moreover, we discuss how to compare a company’s liquidity measures with those of peer companies, the meaning of net daily cash position, and the main techniques for managing accounts receivables and inventory. You will learn about the basic principles of capital budgeting, the meaning of capital rationing, and how to differentiate between independent and mutually exclusive projects. Next, we introduce the measures financial analysts use when deciding whether to accept or reject a project, such as the Net Present Value (NPV), Internal Rate of Return (IRR), etc. We complete the topic with a practical example of building a capital budgeting model from scratch in Excel. We also examine the role of fixed costs in a firm’s cost structure and in determining profitability. We analyze the effect of financial leverage on net income and return on equity and calculate the degree of operating, financial, and total leverage. The Corporate Finance course also covers the role of corporate governance and how environmental, social, and governance factors can be used in investment analysis. We explain the mechanisms of managing stakeholder relationships and mitigating associated risks. Lastly, we define the factors relevant to the analysis of corporate governance and stakeholder management. Our expert-led program is designed for finance professionals and those seeking to excel in the field. Don't wait—enroll now and gain a competitive edge to advance your career.
Topics covered
Capital BudgetingCorporate FinanceDCFExcelFinance Fundamentalsfinancial analysisFinancial ModelingForecastingValuation
What You'll Learn
The Corporate Finance course covers the ideas, concepts, and tools managers use to make the right financial decisions. Learn through detailed explanations and real-world examples how to:
Evaluate a firm’s working capital effectiveness based on its operating and cash conversion cycles
Calculate and interpret a company’s Weighted Average Cost of Capital (WACC)
Build a comprehensive capital budgeting model in Excel
Assess whether a project is feasible from a financial perspective through budgeting tools, such as payback period, Internal Rate of Return, and Net Present Value
Define and explain leverage and the different types of risks a company faces
Understand the basics of an effective corporate governance structure
Curriculum
- Working Capital Management16 Lessons 63 Min
The course begins with the fundamentals of corporate finance. We study the sources of liquidity and their impact on a company’s liquidity position. Next, you will learn how to calculate the most common liquidity ratios, which will allow you to evaluate a company’s overall efficiency. Then, we explain the term net daily cash position and the types of cash flows that have an impact on it. We also give attention to short-term return measures and policy guidelines. You will learn how to evaluate a company’s processes for the management of accounts receivable, inventory, and accounts payable. And finally, we examine the short-term funding sources a company could rely on.
Course Introduction FreeWorking Capital Management (Definition) FreeLiquidity Management FreeLiquidity MeasuresAsset Management RatiosPayables Turnover RatioLiquidity Analysis (Example)Operating and Cash Conversion CyclesNet Daily Cash PositionYields on short-term securitiesInvestment Policy StatementAccounts Receivable ManagementInventory ManagementAccounts Payable ManagementShort-Term Bank Funding SourcesShort-term Non-Bank Funding Sources - Capital Budgeting14 Lessons 69 Min
This section covers the basic principles of capital budgeting. We describe the capital budgeting process, the categories of capital projects, and the difference between independent and mutually exclusive projects. Next, you will learn how to make investment decisions based on some of the most frequently used measures: Net Present Value, Internal Rate of Return, payback period, and profitability index. Lastly, we examine in detail the advantages and disadvantages of Net Present Value and Internal Rate of Return.
The Capital Budgeting ProcessCapital Budgeting (Basic Principles)Engaging with Multiple Projects at a TimeNet Present Value (NPV)Net Present Value: ExampleInternal Rate of Return (IRR)Payback PeriodDiscounted Payback Period (DPBP)Average Accounting Rate of Return (AAR)Profitability Index (PI)NPV ProfileNPV vs IRRProblems Associated with IRRThe Relation Between NPV and Share Price - Cost of Capital16 Lessons 72 Min
This section of the Corporate Finance course is dedicated to the cost of capital. We explain how to calculate a company’s Weighted Average Cost of Capital (WACC) and how taxes affect the various sources of capital. Then, we describe the use of target capital structure in the WACC calculation. You will how the Marginal Cost of Capital affects the investment opportunity schedule and a project’s NPV. Next, we examine the ways to calculate the cost of equity, preferred equity, and debt. At the end of the section, we discuss a project’s beta and flotation costs.
3.1 The Weighted Average Cost of Capital (WACC)Effect of Taxes on the Cost of CapitalUse of Target Capital Structure in Estimating WACCMarginal Cost of Capital (MCC)The MCC's Role in Determining the NPVCost of DebtCost of Preferred StockCost of Equity (using CAPM)CAPM (Components)Cost of Equity (using the Dividend Discount Model)Cost of Equity (using the Bond Yield Plus Risk Premium Approach)Calculate and Interpret BetaCalculate a Project's BetaEstimate the Cost of Equity for Developing CountriesMarginal Cost of Capital ScheduleFlotation Costs - Capital Budgeting: Practical Example12 Lessons 45 Min
In this section, you will apply everything you have learned so far to a fictional case study in which Home Depot decides to expand its operations from North America to Europe and open its first store in France. In this practical exercise, we will build a complete capital budgeting model in Excel and learn how to forecast revenue and various types of expenses. We will also prepare a fixed asset roll forward schedule and calculate the cash impact of extra working capital and the projected cash flows. Lastly, we will perform a sensitivity analysis and explore the factors behind these results.
Case Study (Introduction)Organizing Inputs Into Drivers SheetSales Forecast SheetPreparing a Fixed Asset Rollforward ScheduleCalculate Cash Impact of Extra Working CapitalDebt Repayments and Interest ExpensesProject's P&L SheetProject’s Cash FlowsWACCCalculate Beta in ExcelDiscounting Project Cash FlowsPerformance Evaluation and Sensitivity Analysis - Measures of Leverage8 Lessons 31 Min
Next, the Corporate Finance course covers the definition of leverage and the different types of risks a company faces. We calculate and interpret the degrees of operating and financial leverage, which help us determine a company’s total leverage. Next, we analyze the effects of financial leverage on a company’s net income and return on equity. Towards the end, we explain how to calculate the breakeven quantity of sales by taking into account a firm’s fixed and variable costs.
Measures of LeverageBusiness and Financial RiskCalculate the Degree of Operating Leverage (DOL)Calculate the Degree of Financial Leverage (DFL)Calculate the Degree of Total Leverage (DTL)The Effect of Financial Leverage on a Company's NI and ROECalculate the Breakeven Quantity of SalesCalculate the Operating Breakeven Quantity of Sales - Corporate Governance and ESG Investing13 Lessons 44 Min
In the last section of the Corporate Finance course, we discuss the components of an effective corporate governance structure. Then, we list some of the major stakeholders and how their opposing interests are balanced through stakeholder management. You will fully understand the structure, composition, and responsibilities of a company’s Board of Directors and the main committees it appoints. And lastly, we discuss the corporate governance factors relevant to investment analysis and the environmental and social causes influencing the investment process.
Corporate Governance: DescriptionStakeholder Groups and Their InterestsStakeholder ConflictsStakeholder ManagementGovernance MechanismsBoard of DirectorsBoard of Directors CommitteesFactors Influencing Corporate GovernanceCorporate Governance: Risks and BenefitsPrinciples of Corporate Governance AnalysisEnvironmental Factors and Social Considerations in Investment AnalysisESG InvestingESG Investing vs Fiduciary Duties
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“Nowadays, companies face a lot of challenges: how to acquire funding, how to organize and use their capital, and how to manage their investments. Making the right financial decisions plays a crucial role in maximizing a company's value.”
Ivan Kitov
COO at 365 Data Science
Corporate Finance
with Ivan Kitov