About this course: 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.
Created by: University of Illinois at Urbana-Champaign
Taught by: Heitor Almeida, Professor of Finance, Stanley C. and Joan J. Golder Chair in Corporate Finance
Department of Finance, College of Business
| Basic Info | Course 5 of 7 in the Financial Management Specialization |
| Commitment | 2-4 hours/week |
| Language | English |
| How To Pass | Pass all graded assignments to complete the course. |
| User Ratings |
Complete this course to work toward:
Financial Management Specialization
This course is part of the 7-course Financial Management Specialization from University of Illinois at Urbana-Champaign
Master of Business Administration (iMBA)
This course is part of the fully-online 18 courses plus three capstone projects degree program
Syllabus
WEEK 1
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.
1 video, 6 readings, 1 practice quiz
- Reading: Syllabus
- Reading: About this Course: Ratings and Reviews
- Reading: About the Discussion Forums
- Reading: Glossary
- Reading: Social Media
- Reading: Getting to Know Your Classmates
- Practice Quiz: Orientation Quiz
Module 1: The Objective of the Corporation and Analysis of Financial Ratios
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.
15 videos, 3 readings, 3 practice quizzes
- Reading: Module 1 Overview
- Reading: Module 1 Readings
- Reading: Module 1 Spreadsheets and Other Resources
- Video: Why Maximizing the Stock Price is a Reasonable Goal For a Company
- Video: Conflicts Between Stock Price Maximization and Society
- Video: The Agency Problem and Corporate Governance
- Practice Quiz: Module 1 Practice Quiz 1
- Video: Balance Sheet Ratios: Introduction
- Video: Balance Sheet Ratios: Liquidity
- Video: Balance Sheet Ratios: Solvency
- Practice Quiz: Module 1 Practice Quiz 2
- Video: Income Statement Ratios: Profitability
- Video: Cash Flow Statement Ratios
- Video: Valuation Ratios
- Practice Quiz: Module 1 Practice Quiz 3
- Video: Module 1 Review
- Video: Like this course? Learn more with the iMBA! (optional)
- Video: Like this course? Learn more with the iMBA! (Optional)
- Video: Assignment 1 Overview
- Video: Assignment 1 Discussion
Graded: Module 1 Quiz
Graded: Module 1 Assignment
WEEK 2
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.
14 videos, 3 readings, 3 practice quizzes
- Reading: Module 2 Overview
- Reading: Module 2 Readings
- Reading: Module 2 Spreadsheets and Other Resources
- Video: Long-Term Financial Planning
- Video: Forecasting Income Statements
- Video: Forecasting Cash Flow Statements
- Video: Forecasting Balance Sheets
- Video: Raising Long-Term Financing: Discussion
- Practice Quiz: Module 2 Practice Quiz 1
- Video: Investments in Working Capital
- Video: Working Capital Ratios
- Practice Quiz: Module 2 Practice Quiz 2
- Video: Short-Term Financial Planning: Inventory
- Video: Seasonality and Receivables
- Video: Accounts Payable and Liquidity Risk
- Practice Quiz: Module 2 Practice Quiz 3
- Video: Module 2 Review
- Video: Assignment 2 Overview
- Video: Assignment 2 Discussion
Graded: Module 2 Quiz
Graded: Module 2 Assignment
WEEK 3
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).
15 videos, 2 readings, 4 practice quizzes
- Reading: Module 3 Overview
- Reading: Module 3 Readings
- Video: NPV Example - Speeding Up the Collection of Receivables
- Video: The Concept of Net Present Value (NPV)
- Video: Calculating NPV in Excel
- Video: The Relationship Between NPV and Shareholder Value
- Practice Quiz: Module 3 Practice Quiz 1
- Video: The Internal Rate of Return (IRR)
- Video: Using the IRR to Evaluate Investments
- Video: Problems with the IRR
- Practice Quiz: Module 3 Practice Quiz 2
- Video: Additional Examples
- Practice Quiz: Module 3 Practice Quiz 3
- Video: Real Options - Valuing R&D
- Video: The Option to Wait - Gold Mine Example
- Video: The Option to Abandon a Project
- Practice Quiz: Module 3 Practice Quiz 4
- Video: Module 3 Review
- Video: Assignment 3 Overview
- Video: Assignment 3 Discussion
Graded: Module 3 Quiz
Graded: Module 3 Assignment
WEEK 4
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.
15 videos, 3 readings, 3 practice quizzes
- Reading: Module 4 Overview
- Reading: Module 4 Readings
- Reading: Module 4 Spreadsheets and Other Resources
- Video: Good and Bad Reasons to Engage in M&A Transactions
- Video: Synergy Valuation and Deal Pricing
- Video: Means of Payment and Stock Market Reaction to M&A Deals
- Video: Leveraged Buyouts
- Practice Quiz: Module 4 Practice Quiz 1
- Video: Sensitivity Analysis
- Video: Using Discount Rates to Incorporate Risk Into the Valuation
- Video: Estimating the Required Return on Equity - The Market
- Video: Estimating the Required Return on Equity - The Company
- Video: Estimating the WACC
- Practice Quiz: Module 4 Practice Quiz 2
- Video: Performance Evaluation: Economic Value-Added (EVA)
- Video: Using EVA to Measure Performance of a Company's Division
- Practice Quiz: Module 4 Practice Quiz 3
- Video: Module 4 Review
- Video: Assignment 4 Overview
- Video: Assignment 4 Discussion
Graded: Module 4 Quiz
Graded: Module 4 Assignment
Course Conclusion
1 video
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Pricing
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| Access to course materials | Available |
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Ratings and Reviews
Course was very interesting. The syllabus was itself a lot so that it gets easier tot understand
I like the material and the professor's lecture style. It is very applicable to my experience as a product manager.
There seemed to be a lot of little errors in the notes and questions that should be cleaned up. Otherwise the course is great!!
Great content, great instructor.
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Excellent course.