Course Overview

All business entities need finance to survive and thrive. It is needed right from the establishment of any business. Converting an idea into business, starting a new product line, hiring employees, setting up an office, advertising the products and all day-to-day, minor or major activities of a business requires finance.

The need for finance is forever prevalent in an organization. This need gives rise to corporate finance. What should be the optimal allocation of funds? What should be the mix between fixed and current assets? How should the profitability of different investment prospects be evaluated? How will the firm finance these investments?

Corporate finance deals with the management of finance functions in an organization. Any business needs to make three major finance decisions: investment decision, financing decision and dividend decision. These decisions are further divided into multiple segments. The assemblage of all these facets resides under the umbrella term of corporate finance.

What will be the ideal mix between debt and equity when it comes to acquiring these funds? What capital structure will suit best to a firm? How can a balanced trade-off between profitability and liquidity be achieved?

To combat these challenges it becomes imperative for corporate managers to be well adept in the area of corporate finance. A manager would need to foster sound techniques to fulfil various financial objectives of their organization which will ultimately lead to the fulfilment of the goal of shareholder’s wealth maximization.

This Zoe training course aims to address various elements of corporate finance to its participants. Finance is the backbone of any organization and this course will help simplify the intricacies of corporate finance.

This course helps its participants traverse through many issues of corporate finance by making them aware of different finance functions, capital budgeting techniques used to evaluate different investment avenues, practical problems they may face while raising funds, deciding ideal mix in debt-equity ratio and highlight many more concerns related to the subject.

It gives insights into various models, theories, and finance policies adopted by various companies. It also aims to sharpen different skills including quick decision making, calculating trade-offs by focusing on global practices adopted by firms around the world.

Course Objectives

On successful completion of the course, participants shall be able to:

• Understand the need for corporate finance in the present era
• Calculate trade-off between risk and return profitability and liquidity
• Recognise various alternatives present to raise finance and choose what’s best for their organization
• Identify various investment avenues available for the commitment of funds and how to evaluate them using different techniques
• Perceive various financial objectives and differentiate between profit maximization and wealth maximization
• Understand capital structure theory and its practical applicability
• Comprehend dividend relevance and issues in dividend policy
• Know the principles of working capital management

Training methodology

• Interactive lecture sessions
• Problem-solving sessions
• Presentations
• Case studies
• Financial modelling
• Group discussion
• Management games

Organisational Benefits

On successful completion of the course participants shall be able to benefit their organization in the following ways:

• Helping their organization in selecting the best alternatives for financing their investments
• Facilitating better decision making and enhance financial efficiency
• Identifying potential financial risks such as liquidity risk, interest rate risk, etc. and avoid them
• Providing better financial control and keeping a balanced trade-off between risk and return
• Achieving an ideal debt-equity mix and constructing a capital structure most suited for the organization
• Helping in minimizing financial costs such as interest rates
• Ultimately achieving the goal of shareholder’s wealth maximization
• Gaining a competitive edge over industry rivals

Personal Benefits

Successful completion, of course, shall benefit participants in the following ways:

• Prepare them better for financial challenges such as making financial plans, pitching financing proposal to investors and accommodate them better
• Be enriched with knowledge of various techniques used in the industry to create financial models, make financial assumptions and evaluate investment avenues
• Gain a better understanding of various financial concepts, theories and their applicability
• Be adept at preparing financial reports
• Broaden their mind-set to identify financial risks and timely take actions to mitigate them
• Better growth in job and career with enhanced knowledge of financial management

Who should attend?

• Budding entrepreneurs, start-up founders
• Financial managers, credit managers
• Departmental heads, managers, executives
• Financial analysts
• Venture capitalists
• Investors

Course Outline

Module 1: Understanding the basics of corporate finance

• Understanding corporate finance and finance functions
• Profit maximisation vs. wealth maximisation
• Concept of time value and return
• Capital market theory
• Portfolio theory: Capital asset pricing model
• Agency problem

Module 2: Capital Budgeting

• Need for investment decisions
• Investment evaluation criteria
• Non-discounted cash flow methods and techniques: Accounting rate of return, Payback period,
• Discounted cash flow methods and techniques: Internal Rate of Return (IRR), Net Present Value (NPV), Profitability index
• Estimating cost of capital: cost of debt, cost of preference capital, cost of equity capital

Module 3: Capital structure and financing decision

• Relevance of capital structure: Net income approach
• Net operating income approach
• MM hypothesis
• Pecking Order theory
• EBIT-EPS analysis
• Financial and operating leverage

Module 4: Long- term financing

• Capital market
• Shares: equity shares, rights issues, preference shares
• Debentures
• Asset-based financing
• Venture capital

Module 5: Dividend decision and policy

• Dividend relevance: Walter’s model and Gordon’s model
• Issues in dividend policy
• Lintner’s model of corporate dividend
• Forms of dividend
• Deciding retention ratio and pay-out ratio

Module 6: Working capital management

• Operating cycle and cash conversion cycle
• Fixed and fluctuating working capital
• Determinants of working capital
• Liquidity vs. profitability
• Estimating working capital needs
• Matching approach, conservative approach and aggressive approach

Module 7: Corporate restructuring

• Introduction to corporate restructuring
• Mergers and acquisitions
• P/E and EPS analysis in mergers and acquisitions
• DCF approach
• Leveraged Buy-outs

Module 8: International Financial Management

• Foreign exchange market
• Foreign exchange risks and hedging
• Exchange rate quotations and arbitrage
• Forwards, swaps and interest parity