Foundations of Finance

Imperial College Business School

How long?

  • 5 days
  • in person

Imperial College Business School

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Who should attend

This programme is ideal for mid-level professionals from all disciplines looking to gain a firm foundation in global finance. No previous financial education is required.

About the course

Foundations of Finance is an immersive five-day programme equipping non-finance managers with the fundamentals of finance and accounting practices.

Imperial’s experienced finance professors will help you understand how to utilise financial information such as statements of cash flow to advance your organisation and career. You will be encouraged to think critically about financial practices and apply them towards making your organisation more efficient and profitable.

Based in London, the financial capital of the world, you and your international peers will gain a managerial-level of accounting knowledge, understanding the link between operational decisions and financial results.

Learning outcomes

Understand how to read and interpret a company’s financial statements

Gain the skills to apply financial information to business problems and make sound business decisions

Understand how operating decisions can be used to improve financial results

Understand how strategy and finance be combined to create value for shareholders

Programme content

Day 1

Programme Introduction & Learning Outcomes

Franklin Allen, Professor of Finance and Economics & Claudia Custodio, Associate Professor of Finance at Imperial College Business School

Using Financial Information Intelligently

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session will focus on understanding how accounting numbers come from operating decisions. It will develop an understanding of accounting rules. It will show how to analyse the Income Statement and the Balance Sheet. It will use Diageo as an example.

Analysing the Statement of Cash Flows

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session will demonstrate the Statement of Cash Flows and show how it is related to the Income Statement and the Balance Sheet. It will focus on the importance of cash and how to better manage cash flow. The session will continue to focus on Diageo as an example.

Measures of Business Performance

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session will show how the DuPont System can be used to take the numbers from financial statements and systematically measure and understand the profitability of companies. It will show how finance and strategy can be integrated to build value in a business.

Applying the DuPont System

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session will analyse the performance of Diageo and benchmark against other outstanding companies. The session will focus on Diageo’s profitability and value creation.

Day 2

Using Discounted Cash Flow

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will explain why discounted cash flow (DCF) is such a popular method that is used by companies all over the world to allocate resources and choose among investment alternatives. The session will explain how Net Present Value (NPV) is used to select investments that are most likely to build value in companies.

Discounted Cash Flow Applications

Franklin Allen, Professor of Finance and Economics at Imperial College Business School The most important part of a DCF analysis is the derivation of the correct cash flows. This comes from an understanding of how the investment will affect the future of the business. This session will focus on how to derive free cash flow by understanding how the investment will be executed and the strategy of the company. The session will compare NPV with alternative metrics for investment decision making such as Internal Rate of Return (IRR).

Group Discussion: Airbus Case

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session will analyse the decision to invest $13 Billion in R&D and capacity in the A380. The decision will be analysed from a strategic point of view and from a financial point of view. The potential future cash flows from the market for the product will be explored and the competitive response from Boeing will be discussed.

Day 3

Financial Strategy and Capital Structure

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will deal with the financial strategies of companies. The emphasis will be on the optimal way to finance a business and why that is different depending on the company’s industry, maturity and growth opportunities. The “trade-off” theory of capital structure which involves having an understanding of the influence of taxes and risk on financing decisions, will be explained.

Financial Strategy (continued)

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will focus on additional factors influencing financing decisions such as future growth opportunities and over and undervaluation of companies.

Current Global Financial Situation

Franklin Allen, Professor of Finance and Economics at Imperial College Business School In this session, Franklin will give his expert perspective on the current global financial situation in Europe, Asia, and the USA.

Group Discussion: Diageo

Franklin Allen, Professor of Finance and Economics at Imperial College Business School

Carbon Capture Lab

Franklin Allen, Professor of Finance and Economics at Imperial College Business School Executive Education uses the Carbon Capture Lab to engage executives in high impact, experiential learning in unfamiliar environments. We work with chemical engineers and programme faculty to design different scenarios based on the specific learning objectives of the Executive Education programme. Participants will be presented with an exercise based on the decision of a company to use or not this carbon capture technology.

Network Drinks

Join your colleagues at the end of day 3 for a chat over drinks and canapés

Day 4

Mergers and Acquisitions

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will focus on strategic reasons why M&A may be an attractive growth strategy compared to organic growth. The session will deal with alternative types of mergers and when one might be preferred over another.

Mergers and Acquisitions (continued)

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will focus on how to value and acquisition candidate. The session will discuss how to identify and value synergies than can result from combining the right two businesses together.

Diageo Case

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This case involves the process by which Diageo take the trade-off theory of capital structure and operationalizes it in order to choose an optimal structure for the firm. The session will discuss why Diageo’s optimal capital structure may be different from other companies. The session will discuss alternative approaches that Diageo might have used.

Group Discussion: USX

Claudia Custodio, Associate Professor of Finance at Imperial College Business School This session involves the attempts of a multi-division company to integrate finance and strategy. The CEO attempts to deal with difficult issues such as diversification vs. focus, choosing appropriate metrics, allocating resources, measuring the cost of capital and the best ways to deal with risk. The issues are made particularly complicated because of the global nature of the company. The case focus on how USX deals with measuring the performance of individual segments of the company and the possibility to spin off one of its divisions.

Group Discussion: Emerson Electric

Claudia Custodio, Associate Professor of Finance at Imperial College Business School Emerson Electric is a company that has developed a management system that is focused on the importance of non-financial managers understanding how their decisions affect the company’s financial results. This session will discuss how that has led to superior financial performance for more than 50 years.

Day 5

Value Creation

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will integrate the week’s subjects by focusing on how the world’s top-performing companies use financial information intelligently to formulate and execute strategies designed to achieve their financial objectives. The session will focus on the importance of non-financial managers in that process. The session will include a small group exercise designed to allow participants to apply the lessons of the week.

Value Creation (continued)

Franklin Allen, Professor of Finance and Economics at Imperial College Business School This session will analyse data for companies in many businesses, from all over the world and identify those companies who achieve long term value creation and how those companies differ from less successful companies.

Emerson Electric Case (continued)

Franklin Allen, Professor of Finance and Economics at Imperial College Business School

Programme Wrap Up and Certificates

Franklin Allen, Professor of Finance and Economics & Claudia Custodio, Associate Professor of Finance at Imperial College Business School

Experts

Franklin Allen

Education DPhil, University of Oxford, 1980; MPhil, University of Oxford, 1979; BA, University of East Anglia, 1977 Career and Recent Professional Awards; Teaching Awards The Class of 1984 Teaching Award, 1996, 1997; Helen Kardon Moss Anvil Award, 1993, 1999; Excellence in Teaching Award (Graduat...

Claudia Custodio

Summary Cláudia Custódio is an Associate Professor of Finance at Imperial College since 2016. She was awarded her PhD from the London School of Economics in 2010. After graduating Cláudia spent time in the US working within the Department of Finance at the W. P. Carey School of Business, Arizona ...

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Foundations of Finance at Imperial College Business School

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