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Corporate Finance I: Measuring and Promoting Value Creation

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Corporate Finance I: Measuring and Promoting Value Creation

This course is part of Financial Management Specialization

Instructors: Heitor Almeida

54,058 already enrolled

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4 modules

Gain insight into a topic and learn the fundamentals.

1,184 reviews

Beginner level

No prior experience required

Flexible schedule

2 weeks at 10 hours a week

Learn at your own pace

95%

Most learners liked this course

4 modules

Gain insight into a topic and learn the fundamentals.

1,184 reviews

Beginner level

No prior experience required

Flexible schedule

2 weeks at 10 hours a week

Learn at your own pace

95%

Most learners liked this course

What you'll learn

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

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Assessments

18 assignments

Taught in English

91%

of learners achieved a positive career outcome

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This course is part of the Financial Management Specialization

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There are 4 modules in 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.

In Module 1, 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. We will then 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.

What's included

15 videos8 readings5 assignments1 discussion prompt1 plugin

15 videosTotal 112 minutes

Welcome to Corporate Finance I: Financial Evaluation and Strategy3 minutes
Meet Professor Heitor Almeida5 minutes
Meet Professor Stefan Zeume4 minutes
Learn on Your Terms1 minute
Objectives and Overview4 minutes
Why Maximizing the Stock Price is a Reasonable Goal For a Company10 minutes
Conflicts Between Shareholder Value Maximization and Society10 minutes
The Agency Problem and Corporate Governance8 minutes
Balance Sheet Ratios: Introduction5 minutes
Balance Sheet Ratios: Liquidity12 minutes
Balance Sheet Ratios: Solvency12 minutes
Income Statement Ratios: Profitability14 minutes
Cash Flow Statement Ratios14 minutes
Valuation Ratios9 minutes
Module 1 Review2 minutes

8 readingsTotal 80 minutes

Syllabus10 minutes
About the Discussion Forums10 minutes
Glossary10 minutes
Online Education at Gies College of Business10 minutes
Updating Your Profile10 minutes
Module 1 Overview10 minutes
Module 1 Readings10 minutes
Module 1 Spreadsheets and Other Resources10 minutes

5 assignmentsTotal 150 minutes

Orientation Quiz30 minutes
Module 1 Practice Quiz 130 minutes
Module 1 Practice Quiz 230 minutes
Module 1 Practice Quiz 330 minutes
The Objective of the Corporation and Analysis of Financial Ratios Graded Quiz30 minutes

1 discussion promptTotal 10 minutes

Getting to Know Your Classmates10 minutes

1 pluginTotal 15 minutes

Demographic Survey15 minutes

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.

What's included

12 videos3 readings4 assignments

12 videosTotal 100 minutes

Objectives and Overview5 minutes
Long-Term Financial Planning6 minutes
Forecasting Income Statements9 minutes
Forecasting Cash Flow Statements9 minutes
Forecasting Balance Sheets8 minutes
The Capital Structure Decision8 minutes
Investments in Working Capital8 minutes
Working Capital Ratios9 minutes
Short-Term Financial Planning: Inventory14 minutes
Short-Term Financial Planning - Receivables11 minutes
Short-Term Liabilities and Liquidity Risk12 minutes
Module 2 Review2 minutes

3 readingsTotal 30 minutes

Module 2 Overview10 minutes
Module 2 Readings10 minutes
Module 2 Spreadsheets and Other Resources10 minutes

4 assignmentsTotal 120 minutes

Module 2 Practice Quiz 130 minutes
Module 2 Practice Quiz 230 minutes
Module 2 Practice Quiz 330 minutes
Financial Planning Graded Quiz30 minutes

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).

What's included

11 videos3 readings5 assignments

11 videosTotal 89 minutes

Objectives and Overview4 minutes
NPV Example - Speeding Up the Collection of Receivables10 minutes
The Concept of Net Present Value (NPV)10 minutes
Calculating NPV in Excel4 minutes
The Relationship Between NPV and Shareholder Value6 minutes
The Internal Rate of Return (IRR)9 minutes
Using the IRR to Evaluate Investments6 minutes
Problems With the IRR7 minutes
Free Cash Flow Formulas16 minutes
Real Options - Valuing R&D14 minutes
Module 3 Review2 minutes

3 readingsTotal 50 minutes

Module 3 Overview10 minutes
Module 3 Readings10 minutes
Spreadsheets and Other Resources30 minutes

5 assignmentsTotal 160 minutes

Module 3 Practice Quiz 130 minutes
Module 3 Practice Quiz 230 minutes
Module 3 Practice Quiz 330 minutes
Module 3 Practice Quiz 410 minutes
Making Investment Decisions Graded Quiz60 minutes

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.

What's included

13 videos6 readings4 assignments1 peer review

13 videosTotal 125 minutes

Objectives and Overview6 minutes
Good and Bad Reasons to Engage in M&A Transactions13 minutes
Synergy Valuation and Deal Pricing13 minutes
Means of Payment and Stock Market Reaction to M&A Deals17 minutes
Sensitivity Analysis8 minutes
Using Discount Rates to Incorporate Risk11 minutes
Estimating the Required Return on Equity12 minutes
Finding Beta10 minutes
Estimating the WACC8 minutes
Performance Evaluation: Economic Value-Added (EVA)7 minutes
Using EVA to Measure Performance13 minutes
Module 4 Review3 minutes
Conclusion4 minutes

6 readingsTotal 60 minutes

Module 4 Overview10 minutes
Module 4 Readings10 minutes
Module 4 Spreadsheets and Other Resources10 minutes
Congratulations on completing the course!10 minutes
Get Your Course Certificate10 minutes
Honors Assignment Solution10 minutes

4 assignmentsTotal 120 minutes

Module 4 Practice Quiz 130 minutes
Module 4 Practice Quiz 230 minutes
Module 4 Practice Quiz 330 minutes
Mergers and Acquisitions, Risk, and Performance Evaluation Graded Quiz30 minutes

1 peer reviewTotal 90 minutes

Honors Assignment90 minutes

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This course is part of the following degree program(s) offered by University of Illinois Urbana-Champaign. If you are admitted and enroll, your completed coursework may count toward your degree learning and your progress can transfer with you.¹

Instructors

Instructor ratings

(176 ratings)

Heitor Almeida

University of Illinois Urbana-Champaign

5 Courses120,302 learners

Offered by

University of Illinois Urbana-Champaign

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Reviewed on Nov 17, 2020

This course helped me to learn a lot about Corporate Finance, especially about mergers & acquisitions, LBO and IRR and many more. Mainly it was thanks to the approachable method of the teacher.

Reviewed on Sep 10, 2017

Great course with a LOT of beneficial knowledge. However, it's a lot of information crammed into 4 weeks. In order to learn the material thoroughly expect to spend a lot of time on it!

Reviewed on May 20, 2021

This is a very interesting course to Corporate Finance. It provides you with the fundamentals for Project evaluation, Forecasting cash and financing needs, and Merges and Acquisitions.

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