Most business decisions of investors, analysts, consultants, entrepreneurs and managers require us to look ahead and assess an uncertain future. This course teaches you a differentiated approach that will help you understand the fundamentals of businesses and companies and link this to underlying measures which in turn will help you make better investment or management decisions. Students who have taken this course often comment on how it has transformed their thinking and understanding of companies. It also serves as a useful “capstone” to the MBA program.
In developing the line of reasoning and performing our analysis we consider how to use published financial statements and how the accounting measures and practices impact the measures we see or want to use. We also learn how to supplement the analysis with the extensive information increasingly available from outside sources including Bloomberg and CapIQ.
I will personally spend time with each student and team to help provide insight into how the issues we consider (and others we might not), apply to the company.
Focusing on the future we take a different approach to many topics/concepts that are covered in various ways in other financial statement analysis, earnings quality, and security analysis and valuation classes. So many students take this course as well as other seemingly similar courses and I have never received any feedback that the coverage in this course is redundant irrespective of the other courses taken by students. We will focus on understanding how businesses create or destroy value for various stakeholders and what it would take to change this, and discuss how and why this is in the price or not.
The course draws on three decades of my own experience: advising corporations, analyzing companies as a ranked sell side analyst, creating a new framework and technology based data and valuation system for analysis and investment decisions, and as part of the senior management and finance teams at Morgan Stanley, plus as an academic researcher, auditor participant in accounting regulation and early stage “angel” investor. My objective is to pass on as much of this knowledge to you as is possible in a one semester course.
Every student who puts in effort should walk away with an approach and concepts that they can utilize in many different businesses and positions. It is usually a fun and stimulating journey for students.
Is financial expertise critical?
The course presumes that you have a solid understanding of the subject matter covered in B6013 and other core courses. I have had many students who have no additional financial accounting or finance backgrounds and by investing in their learning they end up with H or even H+ grades. So while financial analysis expertise can be helpful it is not necessary at all.