Corporate Finance

For each course in my homemade MBA curriculum, I will provide before-and-after commentary – think of it as a Coursera course review.  The before section will cover my expectations going into the course and any specific reasons I chose to take it.  The after section will be a reflection of what I thought of the course (format, material, professor, workload, etc.), what I learned vs. what I expected to learn, and whether or not I would recommend it to others (and why).  I hope this Coursera course-review format is useful for the rest of you out there who are making your own homemade MBAs using Coursera.

 

Homemade MBA Coursera course:  Introduction to Corporate Finance

Finance pic

  • Parent University: University of Pennsylvania, Wharton School of Business
  • Description: Part of the Wharton MBA Foundation Series. This course serves as an introduction to business finance (corporate financial management and investments) for graduate level business school students preparing for upper-level course work. The primary objective is to provide a framework, concepts, and tools for analyzing financial decisions based on fundamental principles of modern financial theory.

 

Chosen to replicate the HBS MBA course: Finance 1

  • Description:  This course examines the role of finance in supporting the functional areas of a firm, and fosters an understanding of how financial decisions themselves can create value.

 

 

Before

Expectations going in:

  • As I am vaguely familiar with the concepts of Finance from my job and from some personal finance leisure reading, I expect to learn about the time value of money, the balancing of risk and return in investments, and about financial evaluation criteria for projects at work.

Specific reasons I chose this course:

  • In addition to being a perfect match for the HBS Finance 1 course, I chose this course because it was offered by Wharton, a top-tier business school.  Also, Finance is an important subject to understand for my current job (and intended career).

 

After

My thoughts of the course:

  • Format – good
    • This class used the reliable combination of video lectures accompanied by a weekly homework assignment, called a “problem set.”  The problem sets were usually about 10 questions and took a few hours to complete.  We were allowed three attempts on each problem set, with the highest score taken as the grade.  The problem sets were due the week they were released, so there was no working ahead (or falling behind) in this class if you wanted the Statement of Accomplishment.  The week after each problem set was due, Prof. Allen released the solutions so you could review your work.  A total of five problem sets combined to make 25% of your final grade.
    • Case.  In addition to the problem sets, there was a case.  The case presented us with a business situation and asked a range of questions that tested concepts we had learned throughout the class.  The case was released in Week 5 of the course, consisted of 17 questions, and took me well over 10 hours to complete, as some of the calculations were rather lengthy and complex.  In hindsight, I found that the Case was fantastic preparation for the final exam, which essentially had a mini-case in it (6 years of cashflows in the final, vs. 25 years in the Case).  The Case was worth 25% of our final grade.
    • Final exam.  The final exam was very important at a whopping 50% of our final grade.  Although slightly nerve wracking, this did more closely mirror the weighting of homework to exams in most graduate level courses.  Fortunately, the final was not timed for those of us taking it via Coursera (it was for the on-campus students).  I found the final to be a fair, challenging test of the concepts we learned in class.  However, I thought the final exam wasn’t as thorough or as difficult as the case (thankfully!).
    • This class also made good use of the discussion forums for fellow students to help each other out with homework problems, much like you would in a real class.  However, I think it was more difficult to collaborate on the Coursera discussion forums without crossing the line into territory that I would consider cheating, but every person is entitled to their own opinion of exactly where that line is.
  • Material – amazing
    • This was real Wharton material.  It was as if we were sitting in the lectures right next to the real Wharton MBA students (well, I guess it was a camera was sitting in lecture with them, not me, but it felt the same).  Also, it was very nice of Prof. Allen to provide typed lecture notes, as well as scans of the handwritten material (see photo) from each lecture.
Wharton's Intro to Finance split-screen video lecture

Wharton’s Intro to Finance split-screen video lecture

    • One con of this format was that there was a ridiculous amount of background noise (coughing, papers shuffling, etc.) in the first four weeks of lectures that was very distracting and made it difficult to hear Prof. Allen at times.  However, thanks to some feedback on the discussion forums, the Wharton/Coursera staff were able to fix this issue for Weeks 5 and 6 (thanks!).
  • Professor – Ok
    • For such a prestigious school, I wasn’t overly impressed with Prof. Allen.  While it was obvious that he is an expert in Finance with a firm command of the material, I didn’t see his skill as a teacher come across in this class.  I thought he was surprisingly poor at answering questions from the real students in class, and conveyed a slightly impatient tone/demeanor to his students.  That said, it’s hard to pick up the real feeling of a lecture (or a prof.’s tone/demeanor) through a video recording.  Prof. Allen did a good job of using “motivation examples” at the beginning of each lecture to set the scene for how the concepts he was about to teach us could be applied in the real world.   He was also very well organized and very prepared for his lectures.
  • Workload – intense!
    • There’s no way around it, this class was intense.  The time commitment was significant, the pace was fast, and the material was difficult.  In addition to three hours of lecture each week (two 1.5 hour real classroom lectures), there was a problem set every week that took about another 3ish hours to complete, with much effort and concentration required.  The case added another 10-15+ hours of focused effort, and the final perhaps another 2-3.  I’m glad this class was only six weeks, because I don’t know how much longer I could sustain the effort without burning out.  Now that I’m done, I do feel really proud of finishing the class, and this Statement of Accomplishment will really mean something to me.
  • Other
    • One little nit-pick – Prof. Allen makes his on-campus students do the calculations in the Wharton class with a financial calculator because they won’t have access to excel during the in-class exam.  However, this bears no relevance to the real world where you will always, and I mean always have access to excel.  It would be more useful to set up the assignments, case, and exam to assume excel usage than archaic financial calculators.  I felt for the real MBA students in class that had to suffer through without excel!

What I learned vs. what I expected to learn

  • This class delivered on all of my expectations.  We covered time value of money, evaluation criteria for determining which projects to invest in, and a decent amount of portfolio management – including a deeper dive into the Capital Asset Pricing Model than I will ever need!

Would I recommend this course to others?  

  • Yes

Why/Why not

  • Although this class is certainly brisk, and probably more suited for those who are mathematically inclined, I think the basics of Finance is an important aspect of any Homemade MBA.  This class covered all the core material an Intro to Finance class should cover, and did a good job of focusing on the basics.  And, of course, it’s from Wharton, a highly reputable and high-ranking business school, so that is certainly a plus!

 

 

As a reminder, each course of my homemade MBA curriculum replicates a course from Harvard Business School’s first-year Required Curriculum (as noted here in my post explaining how I made my homemade MBA curriculum).

Finance Statement of Accomplishment

Finance Statement of Accomplishment

If you have any thoughts or questions about this course or my review of it, please let me know in the comments section below.

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  1. Jochen

    I enjoyed reading your comment, and I think it is a very adequate description of the course. I share your impressions. Case was a bigger hurdle than the final; and once you went through this class, you will never forget the difference between real and nominal 😉 So, it’s a good training in a classical math class format.

    I can compare this to another finance class I made at University of Michigan which addresses a more general audience in a very good communication style presenting pretty much the same basics. Difficulty of both courses is about the same, and so is the workload, but the style is completely different:
    UMich is very accommodating but the final is strictly timed with two attempts and changing questions for each trial – and the forum is closed until deadline of the final; you also definitely need to score 60% with the final alone to pass. Wharton’s finance is more focused on the math structures than communication and presents a more detailed and informative preparation for the final, at least for those who passed the case before…

    Both courses may be comparable to Finance 1 and 2 on your HBS schedule. I am definitely glad having survived the run-through after all this hard work as I am not a number guy.
    By the way, I use a German Excel which demands commas where the US version demands points and uses different expressions for formulas; it is very easy to fail because of these necessary adjustments for the auto grader, and I lost most of my time looking for possible errors in technical compatibility. It may be helpful to add a short tutorial to both courses to get everybody in line with the software, so that we can focus on the math problems instead…

    Another point concerning our professor: he is definitely very present in finance research projects and publications. You may have a look at Amazon, especially for a study on banking in 21st century (free for kindle); this can enlighten some of his somewhat distanced remarks on CAPM and actual risk management tools. So, in terms of certification value, besides the Wharton factor he seems to have quite a remarkable standing.

    1. homemadeMBA

      Thanks, Jochen! It has been fun interacting with you on the Coursera discussion forums, and now here on my site.

      I’ll look into the Michigan class, as the Ross business school is also well known in the US, if not abroad.

      That’s funny re using German excel…I had the same issue at the beginning as I’m using Norwegian excel. It has taken me a while to get used to the different uses of commas and decimal points, but thankfully it only hurt me on assignment 1!

      Also, good point about Prof. Allen. Maybe I should have been a little more generous!

      1. Jochen

        Hey again, you don’t need to do the Michigan class on finance if you already passed the Wharton Finance (congrats for this achievement!); it would just double the same content. You may have a look to get a feeling for the communication style, if you like to know.
        For anyone (like me) in need of some preparation before accessing the world of compounding math classes, it may be good starter. I did not like the Michigan certification text so much, only naming the professor but no content.
        This is really done so much better by Wharton because they usually list the subjects, mention the program and give some orientation for outsiders on the course content, making the statement a fairly valuable document of your achievement.
        Carry on, MasterBA 😉

  2. john

    I think you’re being harsh on Professor Allen. I’ve been doing the Wharton Finance, Marketing and Op Management courses as a way of looking at MOOCs and refreshing skills (I got my MBA at Columbia some years ago) so I come at this from a different place than you. But, for what it’s worth, I thought Professor Allen’s lectures were exceptionally good in terms of clarity and exposition.

    As for his abruptness re student questions – most of that was because they seemed to be raising stupid points or issues that would be explained in later examples.

    1. homemadeMBA

      As someone who already has an MBA, you have a very interesting perspective, John. Perhaps it’s because you had already learned the concepts of Finance that you thought the questions asked in class were stupid?

      Also, I’m curious to hear how you think these Wharton classes (and any others that you might have taken) compare to the real brick-and-mortar MBA classes you took at Columbia. Are they comparable?

      Thanks for sharing, and best of luck on the Marketing final (if you haven’t already finished it!).

      1. john

        The questions usually are stupid, the ones asked in bricks and mortar classes are too. Not all of them obviously and I think that my opinion on this was the same during class as it is now with the benefit of partly rememberd knowledge. And that’s no reflection on the intelligent of the questioners. But, bottom line – I thought the professor’s reaction to all the questions was efficient and not rude.

        As for your question re comparison – I would say that the finance course covered about half of an intro to finance course (and that, of course is what it is, half of the Wharton first semester class) and, as indicated, the lectures are superior to those I had.

        Operations Management was interesting i that it covered different territory from my operations research class which was taught by a brilliant professor. Either that or I’ve completely forgotten whole areas of it!

        Marketing, on the other hand is my area of specialisation and I think the area least suited to the MOOC system. It’s been interesting to see what they teach and I’ve learned a few things, but simultaneously I disagree vehemently with some of the theories expounded – notably the areas of influence and loyalty – but then I tend to side with the minority on those – albeit a minority whose views are based in reality and are gaining credibility. For me the most interesting things have been the case studies and the research examples. Haven’t done the final yet, but I’m at 100% so far so not overly worried about it.

        1. jochen

          Just a side pointer in terms of class communication, finance topics and Columbia teaching:
          I really enjoyed the two parts of Columbia’s ‘Economics of Money and Banking’ on payment structures and central banking history. It is filmed lectures like the Wharton style, but you have the chance to witness rather clever student questions, especially at the end of the course, answered by a passionate professor who really cares a lot to explain finance structures to his audience (no math here, 12 weeks of sharp structural analysis of the banking mechanisms from 100 years ago until today). Totally great learning experience and deep insights into the financial machinery, pretty academic but a great complement to more application oriented MBA programs!

  3. john

    Pride comes before a fall – scored 39/40 on the marketing final because I clicked in the wrong place on one answer!

  4. mike

    Just finished the course.. thought it was very good as well, very enjoyable.. few technical issues on the first four weeks of lectures that they fixed up by week 5 , other than that can’t complain about the content and the material provided ie slides, notes and past exams

    Hopefully the course will continue in the future even though Prof. Allen is leaving Wharton. There was a video on youtube somewhere which someone uploaded showing Prof. Allen outlining that he was going to do the Corp. Finance class in two courses.

    Unfortunately it appears as those we will only get part 1. But 1 is at least better than none and who knows maybe another professor from Wharton will pick up the ball and continue.

    I think they should be pleased with the reception their 4 foundation courses are receiving.

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