Tue 1 Feb 2011
One of my goals of doing an MBA was to reflect accurately on the health of a firm subject to real options. Whether its business downturn, economic uncertainty or competitive pressures, the financial decisions made are strategically important to any firm. Any misguided or under-optimized decision can make a company go insolvent. So as part of my learning on advanced financial management, we’re analyzing business cases that deal with unique aspects of financial decision making. Prof. Cohen’s pedagogy is very practical and relevant. His case study approach helps us understand businesses in a larger perspective subject to myriad problems and stimulates our data analytic, reasoning and critical thinking abilities. Finance has always tickled my interest and has remained a passionate elusion to me. I hope to gain enough experience, knowledge and skills that will help me spot risks, evaluate options and make strategic, sustainable decisions.
As part of my beginnings in this wonderful world of finance, I analyzed Crocs, Inc., a tremendously successful ‘fad’ sensation that dissipated soon enough into the realm of slow, sluggish growth, economic battering and some insane business decisions. The goal was to value the firm using valuation multiples and discounted free cash flow methods, perform sensitivity analysis using gross profit margin and revalue the firm based on variations in sales and COGS. This was a unique experience as I collected the data, understood, analyzed, evaluated alternatives and synthesized value out of it. The report can be accessed here (Crocs, Inc. Case Study) as a pdf file. The report is not devoid of flaws, but I consider that a honest effort in the right direction. As we practice and iterate through cases, I hope to excel at it. I hope the day is not far when I can say with pride that I can successfully analyze firms and gauge their financial health.
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