Corporate Finance – Learning Roadmap

Think of finance as a subject that answers three basic questions:

  1. How do you evaluate opportunities for investment? – also known as the valuation question
  2. How do you choose between opportunities? – also known as the investment or choice question
  3. How do you fund or finance your investment decisions and choices? – also known as the funding question

At its heart, the ability to work with finance requires an ability to translate tomorrow’s returns into today’s dollars. At the simplest level, this requires you to calculate present values using a defined rate of return. At a more complex level, we add in payouts that vary with events, probabilities for events and distribution of investment returns based on your class as an investor. As a seasoned financial you adjust payments for likelihood, structure payments for tax efficiency and do analysis that zeroes into drivers of financial performance for a business – sometimes to identify and fix problems, sometimes to learn how to repeat and replicate outstanding results.

What are the prerequisites?

No prior knowledge of the subject is required except for familiarity with basic mathematics.

What topics are covered?

The Corporate Finance: First Course covers the financial statements (i.e. the balance sheet and profit and lost statements); time value of money; risk and return; opportunity cost; cost of capital; weighted average cost of capital and return measures; projected statements; valuation of a given entity at point in time. It aims to address the primary question “How do we derive a value for the entity and how do we determine if it represents fair value for that share?”

The Ratio Analysis course addresses four key concepts – liquidity, leverage, profitability and productivity. The Credit Analysis course focuses on the impact of leverage (financial and operational) on a business and the concept of degrees of operational leverage. It deals with the thinking behind the borrowing decisions of an entity. The Credit Process course focuses on the lending side of this equation.

Case Studies

What are the additional topics I can read up on?

Credit Process & Analysis

Additional SME finance topics

Accounting refresher

Premium Content:

  1. Introduction to Financial Modelling
  2. Corporate Finance – First Course – Includes case study
  3. Credit Analysis – First Course
  4. Credit Process
  5. Credit Analysis – Financial Institution
  6. Credit Analysis – Financial Institution – EXCEL Example
  1. Ratio Analysis – Includes 2 case studies