Certified Corporate Finance

Analyst
VS-1130
Certified Corporate Finance Analyst
www.vskills.in


C CC Certified ertified ertified ertified Corporate Finance Analyst Corporate Finance Analyst Corporate Finance Analyst Corporate Finance Analyst
Certification Code Certification Code Certification Code Certification Code VS-1130
Vskills certification for Corporate Finance Analyst assesses the candidate as per the
companys need for finance management and provisioning. he certification tests the
candidates on vario!s areas in financial statements analysis" #onds and stocks val!ation"
$%V" risk statistics" capital asset pricing model" capital #!dgeting" long-term financing"
capital #!dgeting" dividends" iss!ing sec!rities and long-term de#t.

&hy sho!ld one take this certification' &hy sho!ld one take this certification' &hy sho!ld one take this certification' &hy sho!ld one take this certification'
his Co!rse is intended for professionals and grad!ates (anting to e)cel in their chosen
areas. *t is also (ell s!ited for those (ho are already (orking and (o!ld like to take
certification for f!rther career progression.

+arning Vskills Corporate Finance Analyst Certification can help candidate differentiate in
today,s competitive -o# market" #roaden their employment opport!nities #y displaying
their advanced skills" and res!lt in higher earning potential.

&ho (i &ho (i &ho (i &ho (ill #enefit from taking this certification' ll #enefit from taking this certification' ll #enefit from taking this certification' ll #enefit from taking this certification'
.o# seekers looking to find employment in acco!nts or finance departments of vario!s
companies" st!dents generally (anting to improve their skill set and make their CV
stronger and e)isting employees looking for a #etter role can prove their employers the
val!e of their skills thro!gh this certification.
est /etails est /etails est /etails est /etails
/!ration0 /!ration0 /!ration0 /!ration0 10 min!tes
$o. of 2!estions0 $o. of 2!estions0 $o. of 2!estions0 $o. of 2!estions0 30
4a)im!m marks0 4a)im!m marks0 4a)im!m marks0 4a)im!m marks0 30" %assing marks0 53 63078
here is no negative marking in this mod!le.
Fee Str!ct!re Fee Str!ct!re Fee Str!ct!re Fee Str!ct!re
9s. 3"000:- 6*ncl!des all ta)es8
Companies that hire Vskills Companies that hire Vskills Companies that hire Vskills Companies that hire Vskills Corporate Finance Analyst Corporate Finance Analyst Corporate Finance Analyst Corporate Finance Analyst
Corporate Finance Analysts are in great demand. Companies speciali;ing in finance are
constantly hiring skilled Corporate Finance Analyst. Vario!s p!#lic and private companies
also need Corporate Finance Analysts for their acco!nts or finance departments.





Certified Corporate Finance Analyst
www.vskills.in

a#le of Contents a#le of Contents a#le of Contents a#le of Contents

1. 1. 1. 1. *ntrod!ction *ntrod!ction *ntrod!ction *ntrod!ction to Corporate Finance to Corporate Finance to Corporate Finance to Corporate Finance
1.1 What Is Corporate Finance?
1.2 The Corporate Firm
1.3 The Goal Financial Management
1.4 The Agency Problem and Control of the Corporation
1.5 Financial Markets

5. 5. 5. 5. Financial Statements and Cash Flo( Financial Statements and Cash Flo( Financial Statements and Cash Flo( Financial Statements and Cash Flo(
2.1 The Balance Sheet
2.2 The Income Statement
2.3 Taxes
2.4 Net Working Capital
2.5 Financial Cash Flow
2.6 The Accounting Statement of Cash Flows

3. 3. 3. 3. Financial Statements Analysis and <ong Financial Statements Analysis and <ong Financial Statements Analysis and <ong Financial Statements Analysis and <ong- -- -erm %lanning erm %lanning erm %lanning erm %lanning
3.1 Financial Statements Analysis
3.2 Ratio Analysis
3.3 The Du Point Identity
3.4 Using Financial Statement Information
3.5 Long-Team Financial Planning
3.6 External Financing and Growth
3.7 Some Caveats Regarding Financial Planning Models

=. =. =. =. /isco!nted Cash Flo( Val!ation /isco!nted Cash Flo( Val!ation /isco!nted Cash Flo( Val!ation /isco!nted Cash Flo( Val!ation
4.1 Valuation: The One-Period Case
4.2 The Multiperiod Case
4.3 Compounding Periods
4.4 Simplifications
4.5 What Is a Firm Worth?

3. 3. 3. 3. >o( to Val!e ?onds and Stocks >o( to Val!e ?onds and Stocks >o( to Val!e ?onds and Stocks >o( to Val!e ?onds and Stocks
5.1 Definition and Example of a Bond
5.2 How to Value Bonds
5.3 Bond Concepts
5.4 The Present Value of Common Stocks
5.5 Estimates of Parameters in the Dividend Growth Model
5.6 Growth Opportunities
5.7 The Dividend Growth Model and the NPVGO Model
5.8 Price-Earnings Ratio
5.9 Stock Market Reporting

Certified Corporate Finance Analyst
www.vskills.in

1. 1. 1. 1. $et %resent Val!e and @ther *nvestment 9atio $et %resent Val!e and @ther *nvestment 9atio $et %resent Val!e and @ther *nvestment 9atio $et %resent Val!e and @ther *nvestment 9atio
6.1 Why Use Present Value
6.2 The Payback Period Method
6.3 The Discounted Payback Period Method
6.4 The Average Accounting Return Method
6.5 The Internal Rate of Return
6.6 Problems with the IRR Approach
6.7 The Profitability Index
6.8 The Practice of Capital Budgeting

A. A. A. A. 4aking Capital *nvestment /ecisions 4aking Capital *nvestment /ecisions 4aking Capital *nvestment /ecisions 4aking Capital *nvestment /ecisions
7.1 Incremental Cash Flows
7.2 The Baldwin Company: An Example
7.3 Inflation and Capital Budgeting
7.4 Alternative Definitions of Operating Cash Flow
7.5 Investments of Unequal Lives: The Equivalent Annual Cost Method

B. B. B. B. 9isk Analysis" 9eal @ptions" and Capital ?!dgeting 9isk Analysis" 9eal @ptions" and Capital ?!dgeting 9isk Analysis" 9eal @ptions" and Capital ?!dgeting 9isk Analysis" 9eal @ptions" and Capital ?!dgeting
8.1 Sensitivity Analysis, Scenario Analysis, and Break-Even Analysis
8.2 Monte Carlo Simulation
8.3 Real Options
8.4 Decision Trees

C. C. C. C. 9isk and 9et!rn 9isk and 9et!rn 9isk and 9et!rn 9isk and 9et!rn
9.1 Returns
9.2 Holding Period Returns
9.3 Return Statistics
9.4 Average Stock Returns and Risk-Free Returns
9.5 Risk Statistics
9.6 More on Average Returns

10. 10. 10. 10. 9et!rn and 9isk 9et!rn and 9isk 9et!rn and 9isk 9et!rn and 9isk
10.1 Individual Securities
10.2 Expected Return, Variance, and Covariance
10.3 The Return and Risk for Portfolios
10.4 The Efficient Set for Many Securities
10.5 Diversification: An Example
10.6 Risk less Borrowing and Lending
10.7 Market Equilibrium
10.8 Relationship between Risk and Expected Return (CAPM)






Certified Corporate Finance Analyst
www.vskills.in

11. 11. 11. 11. An Alternative Vie( of 9 An Alternative Vie( of 9 An Alternative Vie( of 9 An Alternative Vie( of 9isk and 9et!rn isk and 9et!rn isk and 9et!rn isk and 9et!rn
11.1 Factor Models: Announcements, Surprise, and Expected Returns
11.2 Risk: Systematic and Unsystematic
11.3 Systematic Risk and Betas
11.4 Portfolios and Factor Models
11.5 Betas and Expected Returns
11.6 The Capital Asset Pricing Model and the Arbitrage Pricing Theory
11.7 Empirical Approaches to Asset Pricing

15. 15. 15. 15. 9isk Cost of Capital" and Capital ?!dgeting 9isk Cost of Capital" and Capital ?!dgeting 9isk Cost of Capital" and Capital ?!dgeting 9isk Cost of Capital" and Capital ?!dgeting
12.1 The Cost of Equity Capital
12.2 Estimation of Beta
12.3 Determinants of Beta
12.4 Extensions of the Basic Modal
12.5 Estimating Eastman Chemical's Cost of Capital
12.6 Reducing the Cost of Capital

13. 13. 13. 13. Corporate Financing /ecisions and +fficient Capital 4arkets Corporate Financing /ecisions and +fficient Capital 4arkets Corporate Financing /ecisions and +fficient Capital 4arkets Corporate Financing /ecisions and +fficient Capital 4arkets
13.1 Can Financing Decisions Create Value?
13.2 A Description of Efficient Capital Markets
13.3 The Different Types of Efficiency
13.4 The Evidence
13.5 The Behavioral Challenge to Market Efficiency
13.6 Empirical Challenges to Market Efficiency
13.7 Reviewing for Differences
13.8 Implications for Corporate Finance

1=. 1=. 1=. 1=. <ong <ong <ong <ong- -- -erm Financing erm Financing erm Financing erm Financing
14.1 Common Stock
14.2 Corporate Long-Term Debt: The Basics
14.3 Preferred Stock
14.4 Patterns of Financing
14.5 Recent Trends in Capital Structure

13. 13. 13. 13. Capital Str!ct!re Capital Str!ct!re Capital Str!ct!re Capital Str!ct!re
15.1 The Capital Structure Questions the Pie Theory
15.2 Maximizing Firm Value versus Maximizing Stockholder Interests
15.3 Financial Leverage and Firm Value: An Example
15.4 Modigliani and Miller: Proposition II (No Taxes)
15.5 Taxes






Certified Corporate Finance Analyst
www.vskills.in

11. 11. 11. 11. Capital Str!ct!re Capital Str!ct!re Capital Str!ct!re Capital Str!ct!re
16.1 Cost of Financial Distress
16.2 Description of Financial Distress Cost
16.3 Can Costs of Debt Be Reduced?
16.4 Integration of Tax Effects and Financial Distress Costs
16.5 Signaling
16.6 Shirking, Perquisites, and Bad Investments: A Note on Agency Cost Equity
16.7 The Packing-Order Theory
16.8 Growth and the Debt-Equity Ratio
16.9 Personal Taxes
16.10 How Firms Establish Capital Structure

1A. 1A. 1A. 1A. Val!ation and Capital ?!dgeting for the <evered Firm Val!ation and Capital ?!dgeting for the <evered Firm Val!ation and Capital ?!dgeting for the <evered Firm Val!ation and Capital ?!dgeting for the <evered Firm
17.1 Adjusted Present Value Approach
17.2 Flow to Equity Approach
17.3 Weighted Average Cost of Capital Method
17.4 A Comparison of the APV, FTE, and WACC Approaches
17.5 APV Example
17.6 Beta and Leverage

1B. 1B. 1B. 1B. /ividends and @ther %ayo!ts /ividends and @ther %ayo!ts /ividends and @ther %ayo!ts /ividends and @ther %ayo!ts
18.1 Different Types of Dividends
18.2 Standard Method of Cash Dividend Payment
18.3 Stock Dividends and Stock Splits

1C. 1C. 1C. 1C. *ss!ing Sec!rities to the %!#lic *ss!ing Sec!rities to the %!#lic *ss!ing Sec!rities to the %!#lic *ss!ing Sec!rities to the %!#lic
19.1 The Public Issue
19.2 Alterative Issue Methods
19.3 The Cash Offer
19.4 The Announcement of New Equity and the Value of the Firm
19.5 The Cost of New Issues
19.6 The Rights Puzzle
19.7 Shelf Registration

50. 50. 50. 50. <ong <ong <ong <ong- -- -erm /e#t erm /e#t erm /e#t erm /e#t
20.1 Long-Term Debt: A Review
20.2 The Public Issue of Bonds
20.3 Bond Ratings
20.4 Some Different Types of Bonds






Certified Corporate Finance Analyst
www.vskills.in

51. 51. 51. 51. <easing <easing <easing <easing
21.1 Types of Leases
21.2 Accounting and Leasing
21.3 Indian Accounting Standard 19 on Lease Accounting
21.4 Taxes, the IRS, and Leases
21.5 The Cash Flows of Leasing
21.6 A Detour for Discounting and Debt Capacity with Corporate Taxes
21.7 NPV Analysis of the Lease-versus-Buy Decision
21.8 Reasons for Leasing

55. 55. 55. 55. @ptions and @ptions and @ptions and @ptions and Corporate Corporate Corporate Corporate Finance Finance Finance Finance
22.1 Options
22.2 Call Options
22.3 Put Options
22.4 Selling Options
22.5 Combinations of Options
22.6 Valuing Options
22.7 An Options Pricing Formula
22.8 Stocks and Bonds as Options
22.9 Investment in Real Projects and Options
22.10 Executive Stock Options
22.11 Valuing a Start-Up
22.12 More about the Binomial Model

53. 53. 53. 53. &arrants and Converti#les &arrants and Converti#les &arrants and Converti#les &arrants and Converti#les
23.1 Warrants
23.2 The Difference between Warrants and Call Options
23.3 Warrant Pricing and the Black- Scholes Model
23.4 Convertible Bonds
23.5 The Value of Convertible Bonds
23.6 Reasons for Issuing Warrants and Convertibles

5=. 5=. 5=. 5=. /erivatives and >edging 9isk /erivatives and >edging 9isk /erivatives and >edging 9isk /erivatives and >edging 9isk
24.1 Derivatives, Hedging, and Risk
24.2 Actual Use of Derivatives
24.3 Short-Term Finance and Planning
24.4 Tracing Cash and Net Working Capital
24.5 Defining Cash in Terms of Other Elements
24.6 The Operating Cycle and the Cash Cycle
24.7 Some Aspects of Short-Term Financial Policy
24.8 Cash Budgeting
24.9 The Short-Term Financial Plan



Certified Corporate Finance Analyst
www.vskills.in

53. 53. 53. 53. Cash 4anagement Cash 4anagement Cash 4anagement Cash 4anagement
25.1 Reasons for Holding Cash
25.2 Determining the Target Cash Balance
25.3 Managing the Collection and Disbursement of Cash
25.4 Investing Idle Cash

51. 51. 51. 51. Credit 4anagement Credit 4anagement Credit 4anagement Credit 4anagement
26.1 Terms of the Sale
26.2 Optimal Credit Policy
26.3 Credit Analysis
26.4 Collection Policy

5A. 5A. 5A. 5A. 4ergers and Ac2!isitions 4ergers and Ac2!isitions 4ergers and Ac2!isitions 4ergers and Ac2!isitions
27.1 The Basic Forms of Acquisitions
27.2 The NPV of a Merger
27.3 Do Mergers Add Value?
27.4 The Tax Forms of Acquisitions

5B. 5B. 5B. 5B. Financial /istress Financial /istress Financial /istress Financial /istress
28.1 What is Financial Distress?
28.2 What happens in Financial Distress?
28.3 Prepackaged Bankruptcy

5C. 5C. 5C. 5C. *nternational *nternational *nternational *nternational
29.1 Terminology
29.2 Foreign Exchange Markets and Exchange Rates
29.3 Purchasing Power Parity
29.4 International Capital Budgeting
29.5 Exchange Rate Risk
29.6 Political Risk

















Certified Corporate Finance Analyst
www.vskills.in

Sample D!estions Sample D!estions Sample D!estions Sample D!estions
1. 1. 1. 1. &hich of the follo(i &hich of the follo(i &hich of the follo(i &hich of the follo(ing items is $@ a so!rce of information from the corporate ng items is $@ a so!rce of information from the corporate ng items is $@ a so!rce of information from the corporate ng items is $@ a so!rce of information from the corporate
ann!al report' ann!al report' ann!al report' ann!al report'
A. 4anagement,s disc!ssion and analysis.
?. S!pplementary sched!le of segment information.
C. A!ditor,s report.
/. Val!e <ine *nvestment S!rvey.

5 55 5. . . . &hich of the follo(ing tools and &hich of the follo(ing tools and &hich of the follo(ing tools and &hich of the follo(ing tools and techni2!es are the most !sef!l to the financial techni2!es are the most !sef!l to the financial techni2!es are the most !sef!l to the financial techni2!es are the most !sef!l to the financial
statement analyst' statement analyst' statement analyst' statement analyst'
A. Crossing refers to correction to #e done #y ?ank if any
?. Common si;e financial statements and financial ratios.
C. he letter to the shareholders and a map.
/. $one of the a#ove

3 33 3. . . . & && &hat type of ratios meas!re the li2!idity of specific assets and the efficiency of hat type of ratios meas!re the li2!idity of specific assets and the efficiency of hat type of ratios meas!re the li2!idity of specific assets and the efficiency of hat type of ratios meas!re the li2!idity of specific assets and the efficiency of
managing assets' managing assets' managing assets' managing assets'
A. %rofita#ility ratios.
?. <i2!idity ratios.
C. Activity ratios.
/. <everage ratios.

= == =. . . . &hich of the follo(ing statements is false' &hich of the follo(ing statements is false' &hich of the follo(ing statements is false' &hich of the follo(ing statements is false'
A. Financial ratios are predictive.
?. $o r!les of th!m# apply to the interpretation of financial ratios.
C. Financial ratios can indicate areas of potential strength and (eakness.
/. Financial ratios can serve as screening devices.

3 33 3. . . . &hich of the follo(ing ratios (o!ld #e ! &hich of the follo(ing ratios (o!ld #e ! &hich of the follo(ing ratios (o!ld #e ! &hich of the follo(ing ratios (o!ld #e !sef!l in assessing short sef!l in assessing short sef!l in assessing short sef!l in assessing short- -- -term li2!idity' term li2!idity' term li2!idity' term li2!idity'
A. Average collection period" de#t ratio" ret!rn on assets.
?. C!rrent ratio" 2!ick ratio" cash-flo( li2!idity ratio.
C. C!rrent ratio" inventory t!rnover" fi)ed asset t!rnover.
/. D!ick ratio" acco!nts receiva#le t!rnover" ret!rn on assets.


Answers: 1 (D), 2 (B), 3 (C), 4 (A), 5 (B)