MSc Financial Management Second Term at Middlesex University

This is the second part of my attempt to explain what it means to study “financial management” at Middlesex Uni. The first part is my earlier April 13 post, which summarized the first term classes. (Caveats remain the same: Curriculum may change from year to year, and January starters may have a different schedule than I did.)

Corporate Finance

Corporate finance remains my favorite class. It lasts two terms, but in the second term, we studied different topics, including determining the optimal amount of debt for a firm (how much should the firm borrow?); methods of valuing a firm (including comparing it with similar firms or estimating the value of its future cash flows); and evaluating dividend policies (how much dividends should a firm be paying out?). The most difficult part will be in understanding the concepts behind each equation. For this, I had to spend a lot of time in my book, and investopedia.com became my best friend.

In terms of the coursework, we continued to have graded and seminar assignments. The bulk of the group coursework is completed during this term. The group coursework requires that each group member choose a company within the same industry and analyze the company using the information learned in class. My group chose the auto industry, so we each analyzed an auto company, presented our industry to the class, and finally submitted a group report.

Financial Analysis and Valuation

This course mainly reinforced concepts we learned in earlier classes. We reviewed ratio analysis; evaluating firm projects using net present value, payback period, and accounting rate of return; and putting together cash flow statements. The coursework was a group project in which we were given a case study to discuss the pros and cons of being listed on the stock exchange. This also required us to put together the most recent balance sheet and income statement and to examine prior year results.

Financial Data Analysis

This class was essentially an introduction to statistics and to doing dissertation research using SPSS statistics software. We wrote a short report critiquing the statistical methods used in a given research article, and we completed a group project, in which we answered questions about a given set of data using SPSS. Some of the work here also related to corporate finance, such as when we regressed company returns with market returns to determine the beta of the company. (You will learn what “beta” is in corporate finance!)

Management Accounting

Management accounting involved using accounting information to make business decisions, such as pricing or discontinuing a product. We studied budgeting, the different types of costs, and how to determine the break-even point (when you have received your initial investment back and there is neither profit nor loss). We also studied some other hot topics in accounting, including activity-based costing and the balanced scorecard. What I liked most about this class was that it provided a systematic way to go about making decisions. Our group project required us to choose the best alternative for a hypothetical ski resort. The ski resort faced the option of either closing in the off-season or keeping a wing open all year. There were some other options, including building a swimming pool and increasing advertising. We had to use what we learned in management accounting to come up with the best decision and defend our reasoning.

Dissertation

You do not begin writing your dissertation in the second term, but you are required to start formulating a topic. During the second term, we submitted a topic proposal with some explanation of why we chose the topic and 5 related articles that we can use in a literature review. This information was then used to allocate supervisors.

So What’s Next?

That was my second term in a nutshell. So what comes next? The dissertation period first requires a short literature review to discuss different methods of research. Then there is a deadline for a more detailed research proposal. And finally, we have from about June ‘til the beginning of October to complete the final work of the dissertation, which should be approximately 15,000 words. Of course, you can always start earlier if you already have an idea of what you will write.

Again, if you have any questions about any of the above, feel free to ask!

UK Trade and Investment Workshop

The latest event I participated in with London Study Ambassadors was a trade and investment workshop. I was very excited for this event because I have a strong interest in international trade, and after all, I am studying business here. What was really great about the workshop was that we got to work on a case study, and you know how much employers love case studies!

We received an introduction to UK Trade and Investment Agency and some advice from a current UK trade advisor on how to help clients. And then we were turned loose! Since none of us felt particularly qualified to give advice on how to expand overseas, we all made our best attempt to read through the client’s information and figure out how to help. We then did a simulated “meeting” with the client during which we presented our suggestions.

Overall, what I gained from this experience is that I feel a little less scared of case study interviews. I’m sure that specialized knowledge can be helpful, but a lot of what we presented involved basic problem-solving skills, such as keeping the client’s goals in mind, examining their current income, and remembering which services UKTI could offer. One thing that is potentially different from other business case studies was that we were acting as government officials, so we were careful to focus on our services, rather than tell the client exactly how to run the business.

As a takeaway from this, I would say that if you are going to study business here at Middlesex, or anywhere, for that matter, it is probably to your benefit to seek out business case studies to build your own skills at interviews and in practice. I found some practice case studies on McKinsey’s site, but please let me know if you know of any other good places to find free case studies!