"What is important is the story that the numbers are telling us"
What are you going to tell students about in the course of “Corporate financial analysis”?
This will basically be an introductory course, so students with any background and without any previous finance studies can also enjoy it. We’ll cover the essential corporate financial principles, skills, and challenges that financial decision-makers face in case of large investment projects. A significant part of the course will take a practical approach: I’ll bring an extensive, real-world-based case study to the class, and students will solve that in teams, make brief presentations, and I’ll also encourage active discussion of results in the class. Thus, for those who have , taken some undergraduate finance classes before, I think the comprehensiveness of the material (including project financing aspects) and the pronounced emphasis on practical application via a realistic case-study and teamwork also make it worth to enroll.
When we say “finance”, many think of people dressed in suits and crunching numbers in their ivory tower of skyscrapers…
That’s, of course, an exaggeration. While it is true that finance is one of the most quantitative fields in economics, and we must be able to handle a relatively high level of abstraction, financial decisions have profound material consequences. For example, one of my most memorable moments was when I advised on a large factory investment in Hungary and, in a later site visit, I could witness that huge structure actually being realized and some hundred people being occupied in the construction – the seed of which was just an Excel model. In my classes, I always try to point out that numbers by themselves mean little if any; what is important is the story that the numbers are telling us, so we shall focus on that.
I’d also like to mention that the need for evaluation from financial perspective is not confined to large investment projects: basically, all our business (and private life!) decisions have some financial implication. (We’re living from money after all…) Countless examples can be given: profitability of a marketing campaign of a product, hiring new workforce, pricing of a new engineering solution are all cases when financial tools become relevant. Therefore, students with any professional focus other than finance may also benefit from this course.
Those students who might fear the supposed difficulty or remoteness of this course can be reassured: we’ll focus more on the connections to real-life business problems and the general logical thinking than just piling equations. I also think that the Summer University provides a great opportunity, away from the “standard classroom setting”, to dip into this profession in a more relaxed, groupwork- and discussion-oriented way. And, of course, no suits necessary, and we’ll probably not be in a tall building either :)
What does “integrated approach” refer to in the course title?
I’m glad you asked. On the one hand, I’ll try to give a comprehensive package of financial decision-making in this course, touching on all major aspects from business planning/modelling, capital budgeting, and financing. On the other hand, we can think of finance professionals as “synthesizers” of inputs from various other professional fields. We have a methodology to calculate how attractive an investment project is in monetary terms, but we need inputs from many other fields to do this! We certainly have to speak with engineers, who are experts in the technology; marketing professionals, who know how to best launch a product/service; HR specialists, who know what the best compensation package would be; legal professionals, who are experts in the applicable regulations, for example. Their individual inputs are translated and combined into a financial a model by the finance professional, which model will serve as an important element in top-level decision-making.
In my practice as a valuation manager at PricewaterhouseCoopers (PwC), I loved this versatility of finance, that I had the opportunity to work with people from so many different professional fields. I’m also keen on “integration” because I originally graduated as engineering manager, so I studied many engineering subjects along with economics. What I just said above also relates to why I think this course would be interesting to non-finance-majors as well.
Anything else before the course?
Corporate finance works quite closely with accounting. Much of the information is presented in the “language” of accounting, or will be translated into it. To give you analogy with natural sciences, it’s like maths and physics. Though we’ll cover the necessary accounting basics, no worries, to those students wanting to get more involved in the profession, I can recommend taking the “Understanding Financial Statements and Accounting Concepts” course as well. I think this is how you can max out the summer fun :)