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Syllabus overview
Introduction
Outline
What will I be expected to achieve?
How will I learn?
Course content
How will I be assessed?
Module/course Assessment
Reading list
Teaching materials
Programme
Academic Year
Module/course Code
Delivery location
Language
Course type
Contact hours
Level
Semester
Module name
Field (Discipline)
Academic Department
Master in Management
Academic Year 2023/2024
FF05
Paris
English
Prerequisite courses
15
5
Fall
FUNDAMENTALS OF CORPORATE FINANCE
Finance
Finance
Professor
BEN ABDELKADER Fahmi, fbenabdelkader@escp.eu
Programme Manager(s)
El Guebali Mona, melguebali@escp.eu
Outline
Module/course Summary
This course is designed to provide students with the fundamental theoretical knowledge and practical tools
of corporate finance. The purpose is to equip future managers and leaders with a framework that allows
them to maximize the value
of a business in a sustainable and responsible way.
The course provides a comprehensive approach of the “value creation” process using the most recent
theoretical concepts as well as the most practical and modern tools of finance.
It particularly emphasizes the importance of understanding the complexity of financial decision making in
the contemporary business environment and how crucial is for managers to go beyond the numbers and
models. The class will be a permanent invitation to question financial concepts and understand their
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limitations.
The course is organized around two main questions: (i) how to analyze the financial performance of a
company? (ii) how to value an investment opportunity and a business?
The first part is devoted to a short introduction to the firm’s financial statements and the most popular
financial ratios as a tool to decision making. It aims at preparing students to analyze the financial health
and the performance of a business. (This part is intended also to prepare students to the advanced course
‘Financial Analyst’).
The second part provides the fundamental tools of valuation of an investment opportunity, including an
introduction to the Time Value of Money and the NPV principle. It prepares students to make business
decisions with a value
creation mindset.
This course is an indispensable pre-requisite for the Finance course in Master 1 and all other finance
electives.
Module/course objectives
The aim of the course is to equip students with a framework that allows them to understand the
complexity of financial decision making in the contemporary business environment
Key objectives
This course is intended to help you to:
Learn how to “speak and think finance” andtranslate performance into financial terms
Develop your critical thinking aptitudes towards finance tools and be aware of their limitations
Master “your recommendation” - to be able to use finance to state your case and support your
recommendation
Develop proactive working relationships with finance professionals and increase your value to the
organization
Get a better understanding of the numbers side of your “future job” and the financial implications
of your decisions
Gain greater confidence with a working knowledge of business financials
Pre-requisite
Good knowledge of the financial statements and accounting basics
No prior familiarity with finance is required
What will I be expected to achieve?
Knowledge and understanding
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Making business decisions with a value creation mindset.
After this course, successful students are expected to:
Understand the construction of the most popular financial ratios and discuss their limitations
Analyze the financial health and performance of a company
Take into consideration the impact of time on the value of money
Identify the determinants of interest rates and Understand the concept of the opportunity cost of
capital as a key determinant of investment decisions
Evaluate the potential of an investment opportunity
Skills
Subject specific
Practical examples
Individuals are taking charge of their personal finances with decisions such as:
▪ How to evaluate the terms for a home mortgage
▪ Whether a car loan or lease is more advantageous
▪ Whether buying a given stock is a good investment
▪ When to start saving and how much to save for retirement
In your business career, you may face questions such as:
Should your firm launch a new product?
Which supplier should your firm choose?
Should your firm produce a part or outsource production?
Cognitive and intellectual
Critical thinking aptitudes
“Education is not the learning of facts but training the mind to think” Albert Einstein.
Students are expected not only to master the fundamentals and basic tools of finance but above all to be
aware of their limitations. It is important to constantly question the concepts and theories in order to
acquire the ability to overcome their limitations and better use them in practice
Creativity and innovation
As the impact of artificial intelligence and disruptive technology grows, people who can perform tasks
that machines cannot are becoming more valuable. It is crucial for students to develop skills that are
hard for machines to emulate.
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Bridging theory and practice
The world does not care what you know; it only cares, and will only pay for, what you can do with what
you know.
Today, with so much information easily accessible on Google, there is less and less interest in how you
acquired the competence and more in proof that you have in fact mastered the competence.
Transferable
Skills
Financial analysis
Investment valuation
Values and attitudes
Reflective learning and criticalthinking attitudes: Students will acquire the ability for reflective,
life-long learning through the concepts discussed in class
Learnability: being curious and having a “hungry mind” are a key indicator of career potential
Adaptability and culture fit
How will I learn?
Delivery modes
[ ] 100% face to face [ ] 100% face to face/teaching materials online [ ] Blended [x] 100% online
Comments:
Comments: There is a substantial amount of textbook reading involved in this course.
Teaching methods
[x] Lectures [x] Case studies [ ] Business Simulations [x] Group Work [ ] Projects [ ] Tutorials
Comments:
The course integrates interactive lectures, tutorials and discussions of cases.
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Lectures will offer an overview of the key theories and concepts, alongside with a critical perspective.
Students are expected to prepare for the course before each session, by reading corresponding
chapters in the course textbook, and, where applicable, consult online resources.
In each session you will:
Read: Reinforce the learnings with complementary press articles and reports
ASSESS: Test your understanding with the critical thinking questions at the end of each section
APPLY: Try it out with a practical application exercise
DIG DEEPER: Learn more with MyFinanceLab (see below) and the recommended books, academic
papers as well as press articles provided in the appendix of each section.
MyFinanceLab
Myfinancelab is a fully integrated homework and tutorial system that will help you to:
Improve conceptual understanding and problem-solving skills
Use unlimited practice on preloaded tutorial questions that complement the chapters in your
textbook via your own personalized Study Plan
Take online homework your lecturer has assigned to you
Course content
Session 1
NB. Students are expected to read all the required readings.
1. Introduction: Demystification of Finance and Cornerstone Concepts
Required Reading: Berk and DeMarzo - Chapter 1
Assignments: MyFinanceLab homework – The corporation
Session 2
2. Financial analysis statements: How to analyze the financial health and performance of a company?
Required Reading: Berk and DeMarzo - Chapter 2
Assignments: Calculate Financial ratios of a company (Excel file)
Session 3
3. Time value of Money and interest rates: what is the impact of time on the valueof money and how to
include it in your financial decisions?
Required Reading: Berk and DeMarzo - Chapter 3 & 4
Assignments: MyFinanceLab homework – Time value of Money
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Session 4
4. Interest Rates: what are the factors that affect interest rates?
Required Reading: Berk and DeMarzo - Chapter 5*
Assignments: MyFinanceLab homework – Interest Rates
*These chapters will not be discussed in class. Students are expected to compulsory work autonomously
on these chapters.
Session 5
5. Capital Budgeting: how to value an investment opportunity?
Required Reading: Berk and DeMarzo - Chapter 7 & 8
Assignments: Capital budgeting Case (Excel file)
How will I be assessed ?
Overview
Required Case studies (No grades for this part but penalty of “-2” on your grade)
3 Challenges – case studies:
CHALLENGE 1
Calculate the Financial ratios of a company (Excel file)
CHALLENGE 2
Computing the cost of a mortgage loan (Excel file)
CHALLENGE 3
Investment valuation Case study (Excel file)
NB
1. These challenges are compulsory but will not be graded.
2. Students can work individually or in groups of 2.
3. Your work must be submitted on Blackboard
4. Penalty of “-2” on your grade for each uncompleted challenge
Please note that these challenges are essential to apply the concepts of corporate finance and to fully
understand the meanings and the benefits of these tools in practice.
MyFinanceLab Challenges
There will be no final written exam for this course. The evaluation will be based on a continuous
assessment on MyFinanceLab.
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Each challenge includes on average 10 questions.
Two types of questions:
Multiple-Choice Questions (with one or more correct answers, please check the instructions for
each question)
and questions with calculated numeric answers.
It will cover material from all sessions.
Language of Assessment
English
Examination
The deadline All the challenges must be submitted before August 31 at midnight
NB. Please ensure that all work is completed by the due date.
MyFinanceLab will not accept submission of work past the due date – no exceptions.
Please submit your work plenty early – it is risky to wait until the last few hours to submit your solutions
– there can be technical problems (with Myfiancelab, your internet connection, etc.) but this will be your
responsibility. If at all possible, submit your answers the day before the absolute deadline – that way, you
have a “safety buffer”.
Module/course Assessment
Assessment Criteria
The Challenges on MyFinanceLab are intended to examine your knowledge, skills and, most importantly,
thinking process and critical evaluation of the material taught.
It includes questions inviting students to reflect on the content discussed in the entire semester, and in a
transversal way. Ability to make links and connections between the different topics discussed will be
especially rewarded.
Required Cases, Assignments
Homework online on MyFinanceLab.
NB. Please ensure that all work is completed by the due date.
MyFinanceLab will not accept submission of homework past the due date – no exceptions.
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Module/course Assement
Assessment Component Assessment Type Weighting % Pass Mark % Pass/ Fail
Challenges on MyFinanceLab Coursework
100
50
Yes
Assessment criteria
Spanish English French German
Definition
8 - 10 70 - 100 18 - 20
1.0 – 1.5 EXCELLENT. Only minor errors.
7 - 7.9 65 - 69 15.6 - 17.9 1.6 – 2.0 VERY GOOD. Above average, some errors.
6 - 6.9 60 - 64 13 - 15.5 2.1 – 2.5 GOOD. Sound work but notable errors.
5.5 - 5.9 55 - 59 11 - 12.9 2. 6 – 3.5 FAIR. but significant shortcomings.
5 - 5.4 50 - 54 10 - 10.9 3.6 - 4.0 SATISFACTORY. Meets the minimum criteria.
<5
< 50
< 10
4.1 - 5.0 FAIL. Some or considerable work needed to pass.
Marking Schema for comparison across countries where the programme takes place
Reading list
Author
1. Berk Jonathan and
DeMarzo Peter
2. Pierre Vernimmen
3. Christophe Thibierge and
Andrew Beresford
Title
Corporate Finance
Publisher
Pearson Education
Corporate Finance: Theory and Practice John Wiley & Sons Ltd.
A Practical Guide to Corporate Finance: Ed. Palgrave Macmillan learn
Breaking the Financial Ice
more : thibierge.net
Teaching materials
MyFinanceLab
Myfinancelab is a fully integrated homework and tutorial system that will help you to:
Improve conceptual understanding and problem-solving skills
Use unlimited practice on preloaded tutorial questions that complement the chapters in your
textbook via your own personalized Study Plan
Take online homework your lecturer has assigned to you
Required Book
Berk Jonathan and DeMarzo Peter, Corporate Finance, Pearson Education.
Additional Textbook
Pierre Vernimmen, Corporate Finance: Theory and Practice. With Pascal Quiry, Yann Le Fur, Antonio
Salvi, Maurizio Dallochio. John Wiley & Sons Ltd. (Section 1 - Financial Analysis)
Christophe Thibierge and Andrew Beresford (2015), A Practical Guide to Corporate Finance: Breaking
the Financial Ice. Ed. Palgrave Macmillan. Learn more (including french version): thibierge.net
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To dig deeper:
Thomas Plenborg, Christian Petersen (2012), Financial Statement Analysis: Valuation - Credit Analysis Executive Compensation. Financial Times Press.
Academic and Press papers
For additional reading students are highly encouraged to read academic papers recommended in the
textbook and business publications, such as The Financial Times, The Wall Street Journal, The
Economist, Les Echos, etc.
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