Duration
24h Th, 60h AUTR
Number of credits
| Master in management, professional focus in MBA (MBA) | 5 crédits |
Lecturer
Language(s) of instruction
English language
Organisation and examination
Teaching in the first semester, review in January
Schedule
Units courses prerequisite and corequisite
Prerequisite or corequisite units are presented within each program
Learning unit contents
The following topics are discussed:
- Fund flow analysis
- Value creation on the asset side
- Value creation on the financing side: Capital structure theories; Payout policy
- Private Equity: Valuing a proposal; Exit Strategies
Starting from the objective of shareholder value creation, we stress the importance of cash generation, via customer value creation, as the main purpose of a business. We show how cash flow over a period can be calculated from income statement and balance sheet items. Next, we discuss performance indicators that help us determine whether value is/has been created through good investment decisions (asset side). Return on invested capital (ROIC) and cost of capital are central concepts in the discussion. The decomposition of Return on invested capital in a profit margin and turnover ratio is discussed, as well as the link of the ROIC components with firm strategy.
Next, we study value creation strategies on the financing side. Can financing strategies (debt versus equity financing, payout policy) create value for shareholders? How can financing decisions create value? How to calculate the financing need of a start-up or growing business?
The main tools discussed are applied from a private equity perspective: How to value a business? What makes a business a good investment? How is a typical deal structured? How does price paid relate to value? How to calculate the return at exit from an investment in a business?
Learning outcomes of the learning unit
At the end of the course students should be able to:
- Understand a business in terms of cash flow needs/cash flow generation.
- Examine the implications of corporate strategy (asset side and liability side) for value creation and firm value.
- Examine the value implications of different financing alternatives.
- Value a business.
- Calculate the (expected) return of an investment in a business.
Prerequisite knowledge and skills
Planned learning activities and teaching methods
Mode of delivery (face to face, distance learning, hybrid learning)
face-to-face
Course materials and recommended or required readings
- Team preparation of cases
- Class participation
- Evaluation of group work in class
- Final test
Work placement(s)
Organisational remarks and main changes to the course
The seminar will take place at the Kloster Heidberg in Eupen. It will be organized over a weekend from Friday 5pm until Sunday 1pm.
Contacts
sigrid.vandemaele@uhasselt.be