Financial Decision-Making

“Price is what you pay. Value is what you get.” – Warren Buffett.
Designed for non-business students with no prior background, this minor gives you practical skills in applied corporate finance so you can see the difference between price and value. By the end, you’ll be able to assess a company’s financial health and put a number on any financial decision—from billion-dollar projects to your own everyday choices.

Have you ever wondered how a start-up with no profits can be worth billions or why pharmaceutical firms kill some drugs after spending millions? The underlying logic also applies to everyday choices: Should you take out this loan, sign that phone contract, buy or rent, invest or keep cash?
This course is about building a rigorous yet intuitive foundation in finance so that, by the end, you can value any investment decision – whether it’s a corporate project or a personal choice.
Aimed at non-RSM/ESE students that want to get prepared for understanding the finance aspects of almost any future job, the course offers a practical introduction to applied corporate finance and valuation. Across four core modules – Financial Health of Companies, Basics of Finance, Investment Decisions, and Firm Value – you'll learn how to interpret financial statements, evaluate investments, understand the time value of money, and analyze risk and return in both corporate and personal contexts.
The emphasis is on intuition, real-world examples and active learning, not memorizing formulas. We will mix lectures with discussions, numerical exercises, simple case studies, and guest lectures from practice.
The course has 15 ECTS. Throughout the course, you will work in teams on a company valuation project. You select a real (listed) company and build a valuation. By the end, in the spirit of Warren Buffett, you will be able to say: “This is the price of the company, this is the value you get – and this is why.” And you will also be able to apply the same logic to the financial decisions in your own life.

• Analyze financial statements to assess a company’s performance, financial health, and value drivers.
• Apply the concept of the time value of money to financial decision-making.
• Evaluate investment projects using standard investment decision rules.
• Describe the basic features of financial securities such as the return and risk.
• Compare different financing options available to businesses.
• Synthesize the tools learnt in this course in a company valuation project to distinguish between price and value.

• This minor is targeted to non-business students. The course is NOT open to students from RSM and ESE.
• There is no prerequisite for this course.
• The minor is not about mathematics. The focus is on intuition and understanding, but it does include quantitative work. Students are expected to have VWO-level maths, be comfortable working with numbers and know basic statistics (e.g. mean, variance, covariance). To check whether you will be comfortable, students can do the maths readiness check here and consult the final exam formula sheet here to gauge the type of calculations expected.
• Students should have or are willing to acquire basic Excel skills to succeed in this course.
• All RSM minors have mandatory attendance.

Teaching methods
This minor consists of interactive lectures (including guest lectures) and workshops. Throughout the course, students will work in teams on a company valuation project which is split in two parts and presented in class.

Teaching materials
Textbook (recommended but not required): Fundamentals of Corporate Finance, by Hillier, D., I. Clacher, S. Ross, R. Westerfield, and B. Jordan, 2017, 3rd Edition. McGraw-Hill (ISBN 9780077178239). Older or more recent editions are fine.

Various journal and news articles will be provided to complement the textbook and facilitate in-class discussions. Further details will be announced at the start of the course.

Method of examination
Final written test and group assignments.

Composition final grade
The final grade for the course is a weighted average of the final written test (70%) and group assignments (30%).
In order to obtain a grade you need to score at least 4.5 on the written test. In order to pass the course a score of 5.5 is required for the final grade.
There is a resit opportunity for the written test but not for the assignments. Note that all partial grades are only valid for the current academic year.