Course Notes

Explore a Career in Business Analysis (LinkedIn Learning)

https://www.linkedin.com/learning/paths/explore-a-career-in-business-analysis https://www.iiba.org/career-resources/a-business-analysis-professionals-foundation-for-success/babok/ What Is Business Analysis? https://www.linkedin.com/learning/what-is-business-analysis Provide a bridge between technical and business viewpoints As a Professional: Certification (IIBA, BCS, …) Competencies: e.g. facilitation, problem-solving, negotiation, industry/organisational knowledge Research Career paths Internally, from a commercial (marketing, sales, finance) role Internally, from an IT role (e.g. product support) As a graduate who enjoys problem solving, research, analysis Business Analysis Foundations https://www.linkedin.com/learning/business-analysis-foundations-4 Introduction “The practise of enabling change in the context of an enterprise by defining the needs and recommending solutions that deliver value to stakeholders” - IIBA

Wednesday, November 15, 2023 | 6 minutes Read

Product Management Fundamentals (University of Maryland)

https://www.edx.org/learn/product-management/the-university-of-maryland-college-park-product-management-fundamentals https://www.facebook.com/groups/222766198976941/ Introduction Customer Wants Product Manager Role No standard background Types of product manager: Technical, Strategic, Growth Owns Product Requirements Document, roadmap, team communications, budget Intersection of Customer (what do they want?) + Technology (is it technically viable?) + Business (is it commercially viable?) Support Design, Development, Marketing (Commercial) Starts at Opportunities and moves clockwise Product Development Lifecycle Find and Plan: What’s the problem? Inputs (current and future): customers, company expertise, competition Design: How to solve it? Build: How best to build the solution? Product manager is the communications link between the developers and customers Share: How to deliver the solution? Sales and marketing Benefits > features, capabilities > stats, differentiation, value proposition Assess: Did the solution solve the problem? Metrics, customer satisfaction Working with Business Find and validate opportunity, communicate to stakeholders, get support Golden Circle What (Result) builds on How (Process) builds on Why (Purpose)

Wednesday, September 20, 2023 | 4 minutes Read

Entrepreneurship – from ideas to reality (Open University)

https://www.open.edu/openlearn/money-business/entrepreneurship-ideas-reality/content-section-overview Ideas spotting an opportunity (e.g. a gap in the market) experiencing a problem and looking for a solution for it (e.g. an invention) being able to do something that others can’t (e.g. using a talent) being prepared to do something others don’t want to or can’t do (e.g. cleaning) having something that others might need or want (e.g. investing in plant or machinery for hire). Sources of innovation Internal An unexpected happening A need for improvement in a proces An incongruous happening Changes in the indsutry, its structure of the market External Changes in population demographics Changes in society, in perception, mood, or meaning New types of knowledge The bright idea past and present work and experience hobbies and leisure interests qualifications and studies new markets/uses for existing products solving a persistent problem research and development (R&D) patents, licences and research institutes invention opportunities from new technologies opportunities from economic/market changes changes in consumer behaviour complaints and irritations expressed by potential customers changes in rules and regulations imitating an idea from a different locality imitating an idea from a different industry improving an existing product films, TV and radio books, magazines and the press trade shows, exhibitions and conferences business and social networks family and friends. Discovery skills Observing Questioning Curiosity Connectivity Associating Incubation Creativity and innovation Sometimes new or better solutions can come from:

Wednesday, September 6, 2023 | 6 minutes Read

Business Model Innovation (HEC Paris)

https://www.coursera.org/learn/business-model General notes Business vs strategy Business model: a description of how a company generates profit Versus strategy: a business model can be used for competitive analysis, portfolio analysis (corporate strategy), business analysis Business models Odyssey 3.14’s business model components value proposition (what, for who, price) value architecture (how - value chain, resources, competencies) profit equation (revenues, costs) Business model canvas overlap customer segments, customer relationships, value proposition = value proposition key partners, key activities, key resources, channels = value architecture revenue stream, cost structure = profit equation Innovation What: Product, process, managerial, business model

Wednesday, August 30, 2023 | 5 minutes Read

Reading Financial Statements (CFI)

https://corporatefinanceinstitute.com/course/learn-to-read-financial-statements-free-course/ https://www.credential.net/6ea89591-f3eb-477b-b5c4-fc5c9f2a806e Balance Sheet aka Statement of Financial Position Current = <1 year Assets and liabilities Deferred taxes: timing difference between accounting income and taxable income → can be asset and/or liability Goodwill: e.g. brand, customers, premium paid on acquisition Intangible: e.g. trademark, patent, copyright Contingencies: e.g. lawsuit with expected future payout e.g. 12 month subscription for £100 → both cash and unearned revenue +£100, each month unearned -£10, revenue +£10

Wednesday, August 23, 2023 | 1 minute Read

Introduction to Business Valuation (CFI)

https://corporatefinanceinstitute.com/course/intro-business-valuation/ https://www.credential.net/6424b711-a689-4088-b6f7-4e389cedff20 The examples and spreadsheets included in the course are super useful! All also available here: https://learn.corporatefinanceinstitute.com/resources/templates/ General Corporate Finance Asset valuation technique (based on replacement cost, liquidation value) isn’t used much so not in this course Enterprise value (assets) = equity value (market cap = shares * price) + net debt (debt - cash) Capital structure = debt to equity ratio Payment order: vendors/employees (COGS) → debt holders (interest) → government (tax) → shareholders (net earnings)

Wednesday, August 16, 2023 | 4 minutes Read

Corporate Finance Fundamentals (CFI)

https://corporatefinanceinstitute.com/course/corporate-finance-fundamentals/ https://www.credential.net/78615569 Introduction Primary market Buy side: institutions/investments Sell side: investment banks Corporations: exchange bonds/shares for capital Secondary market Fund managers buy/sell at stock exchange through investment banks Capital Investment Creates economic benefit greater than one year Increase assets Calculations NPV = FV/(1+r)^n Note: Excel =NPV is different from manual calculation → “Excel NPV formula assumes that the first time period is 1 and not 0. So, if your first cash flow occurs at the beginning of the first period (i.e. 0 period), the first value must be added to the NPV result, not included in the values arguments (or use XNPV).”

Wednesday, August 9, 2023 | 3 minutes Read

Financial Modeling Foundations (LinkedIn Learning)

https://www.linkedin.com/learning/financial-modeling-foundations https://www.linkedin.com/learning/certificates/61b4251cb70b473f8b1820d156848110144fdf6450252fca362d9706a6d36749 Financial models should: Be simple Focus on key cash flow drivers Convey assumptions and conclusions Help evaluate risks through: Sensitivity analysis Break-even analysis Scenario analysis Types of models Comparison Deterministic (known inputs, precise outputs) vs stochastic (probability-based, Monte Carlo simulations; more complex) Three Statement Model DCF Model Buyout Model Valuation from model Present value of discounted free cash flow or multiples lnvestment decision and implied value depends on equity IRR versus market hurdle rate Entry multiple and acquisition premium depends on equity IRR and hurdle rate Base case risk measurement Weighted average cost of capital, multiples, terminal growth Debt capacity, debt terms Senior and subordinated debt financing and exit multiple Traditional risk assessment from equity perspective Sensitivity analysis and scenario analysis of DCF and multiple value Sensitivity analysis and scenario analysis of equity IRR Sensitivity analysis and scenario analysis of equity IRR Tradition risk assessment from debt perspective Break-even analysis to determine ability to refinance and maintain credit rating Break-even analysis to determine at what point cash flow can’t service debt Break-even analysis to determine IRR on senior and subordinated debt Monte Carlo analysis with model Probability distribution of EPS and DCF valuation Probability distribution of equity IRR and probability of DSCR below 1.0 Probability distribution of equity IRR, senior IRR and junior IRR lnformation base Historical financial statements, analysis of value drivers Contracts and analysis of commodity prices and other value drivers Historical financial statements, analysis of value drivers, transaction terms Model starting point Historic balance sheet Sources and uses analysis Sources and uses and pro-forma balance sheet Cash flow process Net cash flow after dividends that result in changes in short-term debt or surplus cash Cash flow waterfall that ultimately measure dividends paid to equity Cash flow waterfall that ends in dividends paid to equity Debt analysis New and existing New debt issues from transaction New debt issues from transaction Model termination Arbitrary terminal period End of project life Transaction holding period Model output DCF valuation, EPS projection, implied P/E, credit quality Equity IRR, project IRR, DSCR Equity and debt IRRs, debt/EBlTDA Corporate financial model (three-statement model) 02-0X, 03-0X files

Wednesday, July 26, 2023 | 4 minutes Read

Introduction to Corporate Finance (Columbia Business School)

Introduction to Corporate Finance https://learning.edx.org/course/course-v1:ColumbiaX+CORPFIN1x+1T2023/home Basic Finance Concepts Rate of Return $$Rate,of,return_{annual}=\frac{Return - initial,investment}{Initial,investment}=\frac{Gain}{Initial,investment}$$ Ex: Invest £100k, return £50k $$Rate,of,return_{annual}=\frac{50-100}{100}=-50%$$ Future Value $$Future,value=Present,value\times(1+rate,of,return)$$ Compounding Future Value $$FV_{t,years}=PV\times(1+r)^t$$ Ex: Invest £100k, RoR = 10% $$FV_2=£100k\times(1+0.10)^2=£121k$$ Present Value $$PV=\frac{FV}{(1+r)^t}$$ Ex: £150k return in 2 years at 10% RoR $$PV=\frac{£150k}{(1+0.10)^2}=£124k$$ Opportunity cost of capital = alternative investment RoR $$PV=\frac{C_1}{(1+r)^1}+\frac{C_2}{(1+r)^2}+\frac{C_3}{(1+r)^3}+…$$ Ex: Return of £110 in 1 year, £121 in 2 years, cost of capital = 10%

Wednesday, July 19, 2023 | 6 minutes Read

Business Strategy from Wharton: Competitive Advantage

https://learning.edx.org/course/course-v1:Wharton+StrategyX+1T2023/home Strategy Definition a distinctive … different from competitors …array of… more than one …interdependent choices that… complementary …address certain questions objective where to compete (product, customers, geography) value proposition source of competitive advantage (price, costs; activites, resources, capabilities) Evaluation Internal Fit Strategy, CA and OE vs SP Competitive advantage Fundamentally higher prices and/or lower costs Operational effectiveness (OE) Best practice → absolute but not relative improvement (often through copying) Necessary but not sufficient, as often leads to strategic convergence, meaning the value proposition too similar for consumers (low differentiation) Strategic positioning (SP)

Wednesday, July 12, 2023 | 5 minutes Read

Corporate Strategy (UCL/UoL)

https://www.coursera.org/learn/corporatestrategy Introduction Corporation = multiple businesses Businesses differentiated by who, what, how (customer, product, place) Corporate strategy = portfolio selection + portfolio organisation Ownership Ownership matrix: Parent vs business, public vs private Shares ≠ votes. Example: Family owns 80% of parent, which owns 40% of business (but 60% of voting rights). Family have 32% of shares and 48% of votes. But as family has 80% of parent (majority), they can control all 60% of voting rights.

Wednesday, June 21, 2023 | 11 minutes Read