The surging economy creates many opportunities but to secure a place in the highly competitive global economy requires individuals who have the skills for effective allocation of resources, in particular financial assets.
As a result of increasing competition in the local business environment, companies are placing greater focus on analysing operating and strategic decisions using financial data. "Business organisations capable of maximising values for their investors have significantly better access to capital. In the sophisticated capital markets, a rising number of firms are aiming to generate long-term value for their shareholders," notes Vidhan Goyal, professor, Department of Finance, School of Business and Management, The Hong Kong University of Science & Technology (HKUST).
To achieve this goal, strategic financial management knowledge and skills are needed at every level of an organisation. Managers in all functional areas should recognise the financial implications of their business decisions, especially the impact on company cash flow and shareholder value.
Aiming to equip executives whose responsibilities require them to make strategic, operating, or investment decisions with the essential know-how, HKUST's School of Business and Management is offering a financial management programme that covers tools and concepts needed for analysing financial and investment decisions.
"Through a comprehensive understanding of valuation and the value-creation process, the programme provides a framework for students to analyse the cash flow and value impact of their day-to-day business decisions," Professor Goyal explains. "An understanding of how value is measured makes students aware of activities that drive value. Students learn methods that help them determine what investments they should make, which companies they should acquire, and which new products they should introduce. In addition, the programme describes how investments should be financed and what effect financial decisions have on value."
HKUST's School of Business and Management has consistently been ranked at the top by the Financial Times and various research institutions. It is the first Asian business school to be dually accredited by the Association to Advance Collegiate Schools of Business International (AACSB) and the European Quality Improvement System (EQUIS), on par with top business schools run by institutions such as the University of Chicago, Columbia University, Harvard University, Northwestern and the Wharton School of the University of Pennsylvania in the US, as well as IMD (International Institute for Management Development, Lausanne, Switzerland), INSEAD (Institut Européen d'Administration des Affaires) and London Business School.
All faculty members at the School of Business and Management are PhD holders who have diverse international exposure and are committed to conducting cutting-edge research and to innovative and pedagogical teaching.
Professor Goyal's research interests are in empirical corporate finance, with specialised focus on capital structure and corporate governance. His work has been published in renowned finance journals such as Journal of Financial Economics, Journal of Business, Journal of Financial Intermediation, Finance Research Letters and Journal of Corporate Finance.
He is a member of the American Finance Association, the Western Finance Association and Beta Gamma Sigma, and has extensive experience in consulting and executive education for companies including local listed corporations and international hotel groups.
The programme covers an array of topics and processes. Participants learn to assess the financial health of their companies by outlining the building blocks of financial statements, relating the information provided by the financial statements to value, and analysing strategic profitability and cash flow.
They are trained to evaluate investment projects, and research and development and marketing expenditures, and to estimate project cash flow, including the consequences of previous project expenditures, shared production facilities, and product cannibalisation.
In order to get familiarised with corporate financial strategy and creation of value, participants look at alternative sources of financing, manage capital structure, and estimate cost of capital of their serving companies and that of their divisions.
In measuring and managing value, they value firms and subsidiaries using discounted cash flow and multiple valuation methods in order to identify strategic factors that build value and the link between corporate strategy and shareholder value; also, to examine value based corporate performance metrics; to understand how operational and strategic decisions contribute to overall free cash flow, return on capital and shareholder values; and to discover the key value drivers.
"The strategic financial management programme is designed to encourage participant interactions, both faculty to student and student to student, throughout the programme. It provides an excellent channel for exchanging ideas as well as building a network among the participants coming from different industries and functional backgrounds," Professor Goyal says. "To illustrate the key ideas covered in the programme, case studies and real-world examples are extensively used."