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Saturday, October 17, 2009: Our second case, Nike gave us a look at how DCF valuation is performed. There's a great take on the valuation process in Exhibit 2 of the Nike Inc. case (Case 13). To further clarify the excel example, the resulting Equity Values from the DCF process are Post-Money values, meaning they shall have included all stock issuances from capital raising up to that point. Thus Post-Money Equity less Investments equals Pre-Money Equity. Continue reading.... Saturday, October 10, 2009: Our first case, Kota Fibres is about liquidity and working capital. On the face of it, these are short-term problems that seem to dissipate toward the end of the year. That's why the year end statements don't seem to raise any alarm bells of long-term problems. It's when you look at the monthly statements that you see the severity of the problem. Continue reading.... Saturday, September 15, 2009: I wish to welcome you all to the wonderful (to some) or horrifying (to others) world of Financial Management. There are financial implications to virtually all business decisions, and so it is vital for any MBA student to be concerned with financial management, regardless of his or her major. At our opening session, we discussed what financial management is all about. Firstly, its about decision-making, on what investments to make and how to finance those investments. The pinnacle aim of financial management is to increase the value of the shareholder. The myriad tasks of financial management range from making decisions regarding plant expansions to choosing what types of securities to issue when financing expansion. Financial managers also have the responsibility for deciding credit terms under which customers may buy, how much inventory the firm should carry, how much cash to keep on hand, whether to acquire other firms (merger analysis), and how much of the firm's earnings to plow back into the business or pay out as dividends. Continue reading.... September 8, 2009: Monday I started checking the exam papers in a light mood but then gradually fell into depression as I begun reading the same answers (word for word, number for number) to questions I didn't even ask. For awhile I thought I was checking a different exam. But then I realized that some have fallen victim to a blog that purports to have solutions to Bruner cases. I don't know who these people are but their so-called solutions are laughable. In the end those who resisted being victimized and made the effort to answer the questions the way I taught came out way better than the those who fell for the scam. Continue reading....