Corporate Valuation: Acquiring Advanced Financial Skills at Wharton
Wharton@Work recently sat down with Michael Roberts, Wharton’s William H. Lawrence Professor of Finance, to talk about corporate valuation. As academic director of the new executive education program, Corporate Valuation and Business Strategy, Roberts says acquiring the knowledge and skills to perform valuations provides benefits for both individual executives and the firms for whom they work.
Wharton@Work: Wharton Executive Education hasn’t offered a program on corporate valuation before. Why is this an important subject today?
Michael Roberts: Corporate Valuation provides the framework and the tools to evaluate decisions that affect the entire company. While the business environment is often changing in terms of regulations and macroeconomic forces, for example, the basic principles behind corporate valuation don’t change. Once you have a fundamental understanding of business valuation, you can use it to evaluate the financial implications of large-scale strategic, operating, and financing decisions in any circumstance.
W@W: What can participants expect to take away from the program?
MR: They will gain an understanding and skillset that enables them to perform advanced business valuation in a variety of situations and for a variety of reasons. Participants will also achieve a greater degree of independence from other financial experts — being able to conduct full-scale valuations from start to finish helps to level the playing field when engaging with other finance professionals.
They will develop a much broader perspective on business because, as the program emphasizes, successful corporate valuation requires an understanding and appreciation for all aspects of business. Last, and closely related, is that participants will improve their communication with everyone in the organization, not just financial executives. Corporate valuation distills all aspects of the business down to their financial implications, tying different functional areas together. In concert, these skills will serve participants well throughout their careers, especially as they progress up the corporate ladder.
W@W: Who are the executives this program is designed for?
MR: Corporate Valuation is for executives with a solid foundation in finance who are interested in assessing the financial implications of decisions affecting the entire company, such as strategic and financial acquisitions, and large-scale corporate initiatives. It is also for executives looking to gain insight into the financial position of their own corporation. Participants might be engaged in strategic planning, corporate development, finance and treasury, risk management, or product and division managers. Additionally, investment analysts who need to estimate corporate enterprise or equity values could benefit. Titles include general manager, vice president, executive director, CEO, COO, or president of an entrepreneurial or fast-growing company, to name a few.
W@W: As the developer of the program, how have you made it stand apart?
MR: This is a unique program. First, Wharton finance is known for its rigor and quantitative analysis. We combine these features with a strong emphasis on practical application. The program is not limited to lectures. On the contrary, the program is very hands-on. Participants will perform actual valuations in a variety of settings, which enables them to understand the many nuances involved in valuations and highlight potential pitfalls and common errors.
W@W: For those who are seeking to deepen their financial knowledge, is the new program complementary to other Executive Education offerings?
MR: Absolutely. Corporate Valuation and Business Strategy is a natural extension of Wharton Finance for Executives. It builds on the principles and techniques taught in that course to provide participants with a working knowledge of how to value entire businesses from start to finish and how to address some of the more advanced issues in capital budgeting, such as financial strategy, net operating losses, etc.
The new program is also a perfect complement to our more specialized offerings, such as Mergers and Acquisitions and Private Equity. Participants can use it as preparation for these programs, or as a follow up if they are interested in diving deeper into the financial issues.