Corporate Finance Tutorials
This series presents corporate finance as a strategic decision framework. It examines how firms allocate capital, evaluate investments, manage risk, and create long-term value—linking financial theory, governance, and market dynamics across the corporate lifecycle.
Showing 1 to 10 of 23 tutorials (Page 1 of 3)
The Objective of the Firm - Corporate Finance Series
What is a firm actually trying to maximise, and why does this question sit at the heart of every financial decision it makes? This tutorial moves beyond the slogans of "shareholder value" and "stakeholder capitalism" to establish the core financial objective: maximising the long-term, risk-adjusted value of the firm. We reframe stakeholders, ESG, and governance not as alternatives to this goal, but as the very channels through which value is created or destroyed. This lecture provides the decision-making compass for the entire series.
Understanding Stock Prices — What They Reveal About Value, Risks, and Managerial Decision-Making - Corporate Finance Series
Stock prices are the market’s most visible signal of firm performance, but they are far from perfect measures of intrinsic value. In this tutorial, we explore how expectations, narratives, and market noise influence price, and how managers can interpret these signals without losing sight of long-term, risk-adjusted value creation. Through clear examples, we show how disciplined managers filter short-term volatility using cash flows, risk assessment, and opportunity cost, while aligning incentives with sustainable performance. By the end, readers will understand how to respect market signals while making decisions that genuinely build value over time.
Economic Profit, ROIC, and WACC: A Manager’s Guide to Value Creation and Strategic Capital Allocation - Corporate Finance Series
Every manager faces the same core challenge: with countless projects competing for limited capital, how do you identify which ones truly create shareholder value? This tutorial provides the answer. We move beyond simplistic profit metrics to establish ROIC (Return on Invested Capital), WACC (Weighted Average Cost of Capital), and Economic Profit as the fundamental operating system for strategic decision-making. Through practical frameworks and examples, you will learn how to calculate these metrics, use them to filter investment opportunities, and understand why a project can be "profitable" yet still destroy value. By the end, you'll have a disciplined, quantitative compass to guide capital allocation, prioritize initiatives, and build a business that generates sustainable wealth.
Capital Allocation: The Central Art of Corporate Finance - Corporate Finance Series
Capital allocation is the single most important process in corporate finance—the art of deploying scarce resources among infinite competing needs. In this tutorial, we move beyond the ROIC vs. WACC framework to explore the challenging realities of choosing between "good" projects, dealing with strategic intangibles, and navigating the organizational politics that distort rational decision-making. Through real-world examples and structured frameworks, we examine why capital misallocation is pervasive and how disciplined managers create portfolios of investments that maximize long-term value, not just project-level returns. You will learn to build a capital allocation system that resorts to numbers for discipline but never confuses a spreadsheet for strategy.
Corporate Governance and Capital Allocation: How Oversight, Incentives, and Board Structures Shape Financial Success - Corporate Finance Series
Capital allocation frameworks are useless without the human system to enforce them. This tutorial examines corporate governance as the operating system for value creation, translating financial theory into disciplined action. We dissect how boards, activist investors, and compensation designs directly determine where capital flows, using examples from public markets to venture capital. You will learn to see governance not as a compliance checklist, but as a dynamic set of mechanisms that can lower your cost of capital, prevent value destruction, and turn strategic vision into financial reality.
Executive Compensation and Incentive Design: Aligning Managerial Decisions with Sustainable Value Creation in Corporations - Corporate Finance Series
This tutorial explores how executive compensation is the critical transmission mechanism that converts strategy into action. We move beyond the myth of "pay-for-performance" to examine how poorly structured incentives can encourage short-termism and hidden risk, while a strategically-aligned "best-fit" design reinforces long-term value. Through practical frameworks and decision-driven examples, you will learn how to tailor incentive plans to a company's lifecycle and strategic tensions, using metrics that drive disciplined capital allocation and sustainable growth. By the end, you'll understand how to build a compensation system that acts as the engine for your corporate strategy.
Mastering Start-Up Funding, Venture Valuation, and Equity Dilution Strategies - Corporate Finance Series
Financing a start-up requires a fundamental shift from corporate finance logic. This tutorial introduces the "Founder's Calculus": the continuous trade-off between using equity to fund growth and preserving ownership of future value. We reframe the start-up as a portfolio of strategic call options, where valuation is the price of that portfolio, dilution is its cost, and real options theory is the decision-making toolkit. Through a connected case study, you will learn how founders can navigate funding rounds not as isolated transactions, but as iterative bets that systematically convert uncertainty into valuable, executable strategies while managing risk.
Mastering Growth-Stage Finance to Scale Value, Not Just Revenue - Corporate Finance Series
Scaling a startup is where ambition meets reality. This tutorial moves beyond early-stage financing to solve the core growth-stage dilemma: how to expand rapidly without destroying the value you've built. We introduce the "Scaling Calculus"—a practical framework balancing growth rate, capital efficiency, and founder control. You'll learn to distinguish value-creating growth from value-destroying expansion, master the strategic use of equity and debt, and apply disciplined reinvestment rules. Through contrasting case studies, we show how applying this evolved calculus transforms scaling from a cash-burn race into a systematic process of building a durable, valuable company.
Capital Allocation in Mature Companies: When Growth Slows and Returning Cash Becomes the Smartest Decision - Corporate Finance Series
For a mature company, the most disciplined decision is often to stop reinvesting. This tutorial explores the final stage of the capital allocation lifecycle, where the core challenge shifts from finding growth to admitting when profitable growth has ended. We introduce the "Capital Return Dashboard," a practical framework that forces management to choose returning cash over value-destroying investments. Using stark contrasts between companies like Procter & Gamble and Kraft Heinz, you will learn the strategic calculus behind dividends and buybacks, how payout policy signals financial health, and why returning capital is not a sign of failure, but the hallmark of a confident, shareholder-focused steward. By the end, you'll understand that giving money back can be the highest-value activity a company can undertake.
Capital Allocation in Decline: When Ending the Business Is the Most Rational Decision - Corporate Finance Series
This tutorial tackles the most psychologically difficult phase of corporate finance: managing a business in irreversible decline. We introduce the "Decline Decision Matrix," a rigorous framework to move from denial to disciplined action. You will learn to diagnose structural decline and evaluate four rational paths: harvesting cash, attempting a turnaround, strategic exit, or liquidation. Using contrasts like Blockbuster's failure versus Netflix's reinvention, we show why the courage to stop investing is often the highest-value decision. This tutorial also explains why rational frameworks fail—unpacking the human and incentive barriers that make these calls so hard in real companies.