Introduction to Corporate Finance

Corporate Finance

• Introductions & welcome to participants
• General introduction to the subject area
• A definition of what corporate finance is, what it is for, and its role in business and the wider economy
• The Business Entity concept, and the importance of the separation of the management of the business from its owners (shareholders)
• Introduction to the concept of ‘shareholder value’ and how this is fundamental to an understanding of corporate finance
• Discussion of the concept of ‘free cash flow’ and the relationship between cash flow and shareholder value
• A review of the key financial statements produced by listed companies: how to use financial information to assess a company’ financial situation and its long-term financial health

Project Evaluation & Business Valuation

• Evaluating the expected rate of return for alternative projects
• Appraising investment opportunities and ranking capital investment alternatives
• Discussion of the concept of the ‘time value of money’
• Use of financial tools such as Discounted Cash Flow (DCF), Net Present Value (NPV), Internal Rate of Return (IRR), payback period, and Return on Assets (ROA) to evaluate capital investment opportunities
• Determining an organisation’s weighted average cost of capital (WACC) and how it can be used as a hurdle rate for investments
• Business valuation: discussion of the difference between value, worth and price
• Examination of financing options; in particular, a description of long-term debt, equity and derivatives and their different uses
• The capital asset pricing model (CAPM)
• Discussion of the role of the capital markets

Changes in Capital and Restructuring

• Discussion of how a company’s operational and financial strategies relate to its financing and ownership structure
• Determine different approaches to asset ownership and disposal
• Preparation and presentation of financial restructuring plans, particularly for companies in financial distress
• Identification of cashflow management actions that will stabilise a company’s financial position
• Discussion of the legal and regulatory aspects of financial restructuring plans

Mergers and Acquisitions

• Discussion of a company’s options for growth – organic growth versus growth through acquisition
• Exploration of differences between mergers and acquisitions: why do companies opt for either one?
• Implications (both positive and negative) of mergers and acquisitions for shareholder value
• How does a company identify potential acquisition targets, and evaluate alternatives?
• Description of potential financing options
• Implications of legal, regulatory and taxation issues for companies undertaking M&A activity
• Risks inherent in M&A activity, and potential mitigations
• Post-merger integration issues

Developing a Financial Strategy

• Exploration of the relationship between financial and business strategy, including economic planning and forecasting, exploitation of sources of capital, investment and taxation strategy, and acquisition / divestment issues
• Delegates work in teams to create a financial strategy based on a case study, incorporating all of the learning from the week; and present their findings back to the group
• Training consultant provides feedback, summarises the key points and the delegates make action plans to ensure they keep the learning alive

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Righttrack programmes are energetic, exciting and highly participative, which create an impact and motivate participants to learn and embrace change

We utilise a blend of learning methods: practice sessions, group workshops, scenario-driven learning, assignments, self managed learning, shared group learning, accelerated learning and structured group learning