# Daily Archives: February 26, 2010

## Electronic Arts (EA): Corporate Finance Case Study

Case Study – Electronic Arts With 1.4 billion dollars in annual revenues, Electronic Arts (EA) is one of the largest publishers of games for personal computers, Nintendo, Sega and Sony consoles.  Between March 1999 and March 2000, EA released a total of 69 games including

## Session V – B: Corporate Finance: Beta, Calculating WACC or Weighted Average Cost of Capital

Concept Title: Weighted Average Cost of Capital (WACC) Description: Explains WACC and how to calculate it Explanation Cost of capital is a concept that can be derived from the discussion we have had about opportunity cost. From the discussion that we have had so far,

## Corporate Finance: Opportunity Cost and Cost of Capital

Opportunity Cost & Cost of Capital Let’s look at two investment opportunities. Opportunity A is a deposit in your local bank. You put the money in and forget it for a year. It’s relatively safe and offers an annual return of 7%. This means that

## Session IV – C: Corporate Finance: Calculating Internal Rate of Return or IRR

Concept Title: Internal Rate of Return (IRR) Description: Teaches you to calculate the IRR Option D Lower your expected return We know that we can’t earn 10% per annum for seven years on this investment. What is the rate that we can earn? There are

## Session IV – B: Corporate Finance: Present Value in Action

Concept Title: Present Value in Action Let’s work with the example above running the numbers using our new formulas and an interest rate or discount rate of 10% a year. We make one additional assumption that all payments, investments as well as returns are made

## Corporate Finance: Discount rate and time value of money

Time value of money. Interest Rate /Discount Rate / Internal Rate of Return. It’s time to talk about interest rates, discount rates and time value of money.  Three inter related core concepts in Finance that lead to a number of interesting applications. Compounding Let’s go

## Session III – B: Corporate Finance: The many faces of Return: ROE, ROIC and Payback

Concept Title: Return Description: Explains teaches how to calculate return and different kinds of returns Explanation We already know that compensation for bearing risk is called return. The question now is how do we determine an appropriate return? In order to answer this question we

## Session III – A: Corporate Finance: Risk & Return

Description: Explains the concept of Risk, the reward for bearing the risk and different types of return of Investments Concept Title: Risk & Reward Definition: Establishes the relationship between risk and reward When it comes to risk, there are probably as many definitions out there

## Session II – C: Corporate Finance: Equity and the Income Statement

Concept Title: Equity Description: This concept takes a look on equity and identifies the different equity types Equity When you take out what the firm owes from what the firm owns, something should be left for the original owners of the firm. The net amount

## Session II-B: Corporate Finance: Balance Sheet: Liabilities & Working Capital

Concept Title: Liabilities Description: Continues the discussion of basic accounting and finance terms with a focus on liabilities Liabilities The opposite of assets, liabilities are things that other people own and the firm owes. Similar to assets there are also different shades of liabilities. The