Welcome to a course on corporate finance. The modern world runs on finance and whether you're ready to admit it or not finances, that corporate behind so many phenomenons that impact our daily work and family lives. Remember that great recession of a few years ago, finance played a significant role. Want to retire someday need to evaluate an investment opportunity need to determine the price to pay for an acquisition? How about knowing how much debt you can safely take on finance is integral to each and every one of these sorts of decisions, regardless of your career aspirations. knowing a little bit about finance can go a long way.

Whether you want to be a rock star or a wall street analysts both need to know a little something about finance. And if you want to be a rock star on Wall Street, then this is the course to start you down a path in that direction. My name is Blair cook and I'm a person Rational accountant by training. But I've always been a bit of a finance junkie at heart. I've worked at the highest levels of corporate finance, and spent a number of years during my career working as a financial analyst. I'm going to assume that this is your first exposure to finance.

So during this course, no prior knowledge of finance is required. If I was trying to describe finance in a few words, I say that finance is a discipline that deals with the management of all things cash. This includes raising it, spending it, protecting it and investing it. Cash is a really big deal in finance, and is at the heart of whatever financial analysis you're doing. Accounting and Finance is terminology that is often used interchangeably. However, they're not the same thing.

Accounting deals with business transactions, which are the activities associated with buying and selling of goods and services, accounting processes, records and reports these transactions to stakeholders, be they management or external stakeholders like investors, analysts or tax authorities. Accounting tends to be backward looking in its orientation. finances. Finance, on the other hand, is always looking forward and financial analysis more often than not supports management decision making. matters pertaining to finance have direct implications on the creation of shareholder value. The creation of shareholder value is the holy grail of Finance.

Shareholders are those individual owners of a business. They are the people who invest their savings on the expectation of generating an investment return. In other words, if you buy common shares in a company like apple or Microsoft or Walmart, you hope over time That the value of your shares will appreciate. And if you're lucky that the company will pay you some dividends along the way. as sexy as it is to be a shareholder and tell everyone at cocktail parties, you're an owner of apple. Keep in mind that as an owner, you hold the most risky investment position in the company.

The reason is because shareholders represent a residual interest in the event of liquidation of the company, the shareholders always get paid last. Now, if you believe liquidation is only a remote possibility, keep in mind that of the hundred largest companies 100 years ago, only 18 still exists today. Secured lenders those that have a claim against specific assets, right first, then there are priority payables to such creditors as the government and employees. Then there are your unsecured creditors like your suppliers, then you have preferred shareholders And finally comes the common shareholders interest. If the company makes no money, then the shareholders stand to lose the value of their investment. However, if the company is really successful, the advantage of being a shareholder with a residual interest is that all the upside is yours.

In this course, we're going to explore this world of finance even further, let me give you a preview of the topics I want to cover. I'll introduce to you financial analysis and how you can use trends and ratios to help develop an expectation of the future. We will discuss how the cash flow forecast is the basis of most financial analysis. We will learn about the time value of money and how it's used in finance to determine present value and future value. When you know what something is worth or going to be worth. You can build a strategy year round that insight, we will discuss different types of financing instruments and their relative financial costs.

And then we will tackle financial leverage. And I'll show you how debt can be used to augment returns by establishing an optimal capital structure. Then we're going to tackle risk management and derivative instruments, which includes giving you an introduction to forward contracts, options and swaps. These tools help companies improve predictability, and mitigate undesirable risk exposure. And finally, we will learn about where finance exists in the organization and how all this theory gets applied in practice. Yes, this is finance 101 in one hour, it's obviously impossible for me to cover everything in finance.

But in all of my years of experience, I've noticed that there's a difference between financial theory and what gets applied in practice. I'm going to emphasize the practical application of finance and leave out some of the more academic aspects. So grab a coffee or a Red Bull and dive into the first lesson.