2011e4403lecture1-3_complete

2011e4403lecture1-3_complete - Professor Sadighian Lecture...

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Unformatted text preview: Professor Sadighian Lecture 1 Analysis of Financial Statements IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011 IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Course Description h This course covers important issues in corporate finance h We introduce key measures and analytical tools to: s Assess the financial performance of a firm and s Perform the economic evaluation of industrial projects and business units h We study deterministic mathematical programming models for capital budgeting h We also cover important concepts in utility theory and game theory IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Application Areas: A Few Examples h Mergers and acquisitions s Help companies search for the best partner/target by valuing real synergies h Post-merger integration s Help companies realize the value of synergies as quickly as possible h Restructuring s Help companies maximize their value through internal improvements, external opportunities (divestures or acquisitions), and financial engineering h Value-based planning s Help management value each business unit s Determine the key drivers that are distinctive for each business IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Outline of the Course Syllabus: h Interpreting Financial Statements s Cash Flow Cycle s Balance Sheet and Income Statement s Sources and Uses Statement s Cash Flow Statement s Free Cash Flow s Financial Statements and the Value Problem s Case Examples h Evaluating Economic Performance of Companies and Industrial Projects s Profitability Analysis s Turnover-Control Ratios s Leverage and Liquidity Analysis s Discrete and Continuous Compounding IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Outline of the Course Syllabus: h Figures of Merit s The NPV Criteria s The Benefit-Cost Ratios Criteria s The Project Balance Concept s Conventional, Potentially Profitable, Pure and Mixed Investments s Determining the Relevant Cash Flows h Capital Structure and Dividend Policy s Lintners Model and the Dividend Controversy s Modigliani-Miller Theory s Debt Policy IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Outline of the Course Syllabus: h Weighted Average Cost of Capital & Optimal Capital Structure s WACC Tree s Estimating WACC Parameters s Unlevering and Relevering Betas s Forecasting and Valuation of Free Cash Flow s Managing Growth s Economic Value Added s Valuation with Changing Capital Structure s Optimal Capital Structure s Cost of Financial Distress s The Pecking Order of Financing Choices IEOR E4403 Advanced Engineering and Corporate Economics Fall 2011, Profs Sadighian & Kachani Outline of the Course Syllabus: h Deterministic Capital Budgeting Models s Pure Capital Rationing, with no Lending or Borrowing Allowed s Capital Budgeting, with Equal Borrowing and Lending Rates...
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2011e4403lecture1-3_complete - Professor Sadighian Lecture...

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