Corporate Governance, Death and Taxes, Enron, Finance and Financial Management, Financial and Management Accounting, London Stock Exchange, MBA blog, mba student blog, Parmalat, Strathclyde Business School, strathclyde mba, University of Strathclyde, WorldCom
Yep – exams are looming again shortly – here, Mehdi Dhoman reflects on Term 2:
“Second wave of exams are just round the corner (double eeek!!!!). The terms just fly-by, it’s a bit uncanny! Before we know it, we’ll be already working on the final drafts of our project dissertation. With an additional four modules nearly completed, how has my perspective on the Strathclyde MBA evolved? It’s still definitely not a stroll in the park but still very interesting. This term focused on accounting and finance and these were the two modules I was most looking forward to. For the Financial and Management Accounting assignment, we had to look closely at the financial statements (the accounting books) of actual companies listed on the London Stock Exchange and make recommendations from ratios calculations we come up with. We actually had to look at two companies within the same industry and benchmark our results for two years of operations, which meant that we had to dissect companies’ annual reports, look into their overall market strategy, their financing structure and so forth. The ratios calculations themselves are not hard, the maths is very straightforward, but the real effort is to dig the appropriate values hidden underneath layers and layers of excess information within the companies’ annual report.
A break from numbers, we had the corporate governance module. We look at the pertinence of Corporate Governance in a context where more and more investment institutions are looking to invest in emerging economies. The whole topic took prominence as a result of spectacular collapse of giants such as Enron, WorldCom and Parmalat. The first portion of the modules delves quite heavily on these collapses and how the directors were completely inept to salvage the companies. Nowadays institutions issue guidelines across the world to ensure that board of directors are emboldened appropriately to properly oversee the companies in an effort to avoid further catastrophic crashes. I find it very interesting that investors actually consider corporate governance as an equal indicator as the financial performance of a company when judging a prospective investment.
Back into numbers again, with Finance and Financial Management, which for me is the headlining act of this gig. The subject is indeed very wide covering risk, capital budgeting, capital structure, financing, corporate finance and so on. I had no previous experience of finance and always had a slightly skewed preconception that the whole thing would be dry and downright boring. But no, it was not!!! Professor David Hillier just captured my attention from the get go. There are several learning points, one of which is investment appraisal, and the necessary indicators to use such as Net Present Value and Internal Rate of Return to make the appropriate assessment. We now know that Net Present Value is the daddy of all of these indicators. The course is very much aligned with actual context of the world’s financial realities. The assignment as well involves a fair amount of maths but then again it is still straightforward. Another point of reflection is how money just constantly loses its value… it’s practically a certainty: “Death, Taxes and your money will just keep losing its value!!!!”. Maybe it’s time to start trading with something that has an intrinsic value…
We are no longer strangers in a strange land thanks greatly to the friendship that’s growing amongst the cohort. I am constantly aware that the year will just zoom by and even though we are buried with work and extra reading, we still find the time and make some effort to socialise from time to time. All in all, the outlook is very positive and I am enjoying my experience (well maybe less when exam study week is upon us…). “