CORPORATE BANKING AND FINANCE
Learning outcomes of the course unit
The course aims to deepen the understanding of criteria and methodologies for the analysis of financial equilibrium. Students will acquire skills and abilities to identify problems and make appropriate choices in the field of firm financial management. The theme is contextualized within the institutional framework of the Basel Accords, which altered bank-firm relationships and implied incentives to raise the quality of credit relations.
At the end of the course, students will have acquired:
a. the knowledge required to understand and describe in detail the concept of financial equilibrium, as a condition for firm competitiveness on capital markets, and also knowledge of methodologies for the analysis and monitoring of financial management.
b. the knowledge of financial theory guidelines for the optimization of financial choices in the use of capital and the ability to apply methodologies for the analysis of performance in terms of value creation;
c. the ability to plan and monitor firm growth paths and critically assess financial sustainability using independent judgment;
d. communication skills with company and bank management in the analysis of financial statements and business plans for the evaluation of creditworthiness;
e. the knowledge of working methods for financial analysis and the ability to critically evaluate, with independent judgment, the degree of potential stability of firms in relation to adverse dynamics of the economic cycle, market conditions and the resulting degree of creditworthiness.
Course contents summary
• The assessment of company financial equilibrium in the framework of the Basel Accords: bank capital requirements for credit risk, credit rating and its impact on enterprise financial management.
• Financial analysis. Historical financial analysis: balance sheet reclassification, balance sheet ratios, cash flows analysis. Financial forecasting: financial plans and their construction.
• Corporate valuation: balance sheet-based methods, income statement-based methods, mixed methods, cash flow discounting-based methods. Metrics of value created by management, risk measurement and cost of capital.
• Financing operations: pool loans, corporate bonds, mezzanine finance.
• Equity operations: venture capital, private equity, initial public offering, crowfunding.
• Extraordinary finance operations: merger and acquisition, leverage buyout, management buyout, project finance, spin off.
• Corporate crisis and debt restructuring.
Various Authors, L’equilibrio finanziario (ed. E. Pavarani), McGraw Hill, 2006, Chapters: 1 - 2 - 3 - 5 - 6 (excluding 6.6) - 7.
Various Authors, Pianificazione Finanziaria (ed. E. Pavarani and G. Tagliavini), McGraw Hill, 2006, Chapters: 6 – 7 (only 7.1 and 7.2) - 9 (except 9.7 and appendices) - 10 (excluding appendices).
Teaching materials available at the photocopy office of the Economic Department.
Online course materials.
• Acquisition of knowledge: lectures.
• Acquisition of the ability to apply the methodology of analysis: exercises.
• Acquisition of judgment: lessons stimulate capacity for critical evaluation of potential and limits of the different methods of analysis.
• Developing capacities for learning: lessons present problematic situations and stimulate critical focus search for appropriate solutions.
• Acquisition of technical language: the teacher will illustrate the meaning of the most common terms used by the financial community.
Assessment methods and criteria
The acquisition of the ability to communicate with appropriate technical vocabulary will be assessed through 3 closed-ended questions about the meaning of terms used in the field of corporate finance. Each question will be assessed 1 point.
The acquisition of basic knowledge of institutions, methodologies, theories and concepts will be assessed with 3 open-ended questions. Each question will be assessed 3 point.
The acquisition of the ability to apply methods of analysis methods will be assessed through two exercises. Each exercise will be assessed 6 point.
The acquisition of learning skills and autonomy of judgment will be evaluated with 2 open-ended questions. Each question will be assessed 3 point.