Have you been reading the headlines lately and wonder what does it mean when they said Flipkart acquired Myntra? Did they merge? Was it an acquisition? When do they mean when they say company ‘X’ was valued at 3 times GMV? What is Gross merchandise value? Why three times? Why a multiple at all? What on earth are multiples? I would like to be part of this world.
The world is Corporate Finance, an all encompassing term that deals with sources of funding and analyses the capital structure of an organization and provides you with tools to increase share holder value and allocate financial resources effectively so that you get maximum return on your investment. So questions like, should I make this steel plant or buy it? Should I create this web portal or should I buy a competitor. We would then do cost benefit analysis, which would tell us, which would be the route that results in a better return on our investment and increase shareholder value. How does shareholder value increase? That’s part of our classroom series but that’s what you would learn in a Diploma in Corporate Finance (DCF) at Imarticus Learning.
A Corporate Finance Diploma in India and globally is usually broken down into two parts. The first part will deal with Corporate Finance Theory and Techniques because Finance is, as you probably know, very technical. Practical application is extremely important but is not possible without understanding the Fundamentals of Corporate Finance. For instance you really cannot value a company without understanding the impact of Time Value of money. For instance why is one rupee today more valuable than one rupee down the line? And if that is the case, my company cashflows down the line will be worth less today. I need to bring those cashflows forward, after factoring in that impact of time on them, add them all up and come to a value for my company. The factor is called a discount rate and we arrive at it by understanding how we have funded the business and the cost of funding the business. Lost but interested?
Fundamentals usually begin with a thorough understanding of Accounting Theory and Financial Statement Analysis, Valuation, the concept of Debt and Equity and capital structure, M&A and Asset Disposal ending with Regulations and Ethics. Once we appreciate the fundamentals, we begin to apply it to the real world. The second section will usually be dedicated to understanding Corporate Strategy, why companies exist and how they make money. You will then move on to how companies grow and the various vehicles they use for growth, which will then move into applying what you learnt in section one to various companies and markets to understand how to create and measure shareholder value and the ways in which shareholder value can grow.
For more information on Diplomas on Corporate Finance in Mumbai and online, please visit https://imarticus.org/finance-courses/ .