Brief Description of Cases

The following table provides a brief description of all the cases.

Case Name

Topic

Lisa Mathews Investment Opportunities

Valuation Problem Set (A)
Reliance Capital
Cost of Capital for Utilities in India
Financial Statements and
Industry Structure, 2007
The Use of Cash Flow Statements
Financial Performance of Major Steel Firms
Value Based Management at Marico Ltd.
Valuation Problem Set (B)
Indian Premier League
Option Pricing Problem Set
Tata Steel: The Bid for Corus
Working Capital Management
at Excel Crop Care Ltd.
Trent Ltd. Rights Issue of
Convertibles and Warrants
Financial Instruments Problem Set
BGR Energy Systems Initial
Public Offering
Shree Cement Ltd.

Time value of money, capital budgeting

Risk and return
Risk and return
Estimation of cost of capital
Financial statement analysis

Fujairah Bank

Financial statement analysis

Financial statement analysis
Role of CFO, value, economic profit
Financial forecasting, discounted cash flow valuation
Capital budgeting, discounted cash flow valuation
Options, derivatives, real options
Mergers and acquisitions, valuation
Working capital, short-term financial management
Capital structure, financing, convertibles and
warrants
Financing, financial innovation, financial engineering
Financing, IPOs
Bank loans, short-term financial planning and
management
Bank loans, short-term financial planning and
management, financial forecasting

Case Descriptions

MODULE 1: BUILDING BLOCKS

C1: Lisa Mathews Investment Opportunities
An individual is appraising a hotel project. She is required to take a decision on the basis of NPV and
DCF analysis. She also has to determine the size of the investment. The objective is to introduce time
value of money and discounted cash flow analysis.

C2: Valuation Problem Set (A)

The problem set covers estimation of returns, standard deviations, alpha, beta, R2 and standard error
for stocks using different return intervals and market proxies as well as construction of two stock
portfolios.
The objective is to introduce the risk and return of investments in stocks.

C3: Reliance Capital

The case introduces risk and return of investing in stocks in the context of a mutual fund. The
objective is to introduce risk and return of investments in stocks and mutual funds.

C4: Cost of Capital for Utilities in India

The case presents the cost of capital estimation procedure for utilities in India. The objective is to
introduce issues in the estimation of cost of capital.

C5: Financial Statements and Industry Structure, 2007

The case demonstrates how financial statements reflect industry characteristics. The objective is to
introduce the use of ratios in predicting firm characteristics. Students are asked to predict the firm
and its industry group using disguised financial statements.

Case Descriptions

xvii

C6: The Use of Cash Flow Statements

The case presents the cash flow statements of three companies drawn from India and the U.S. The
objective is to introduce analysis of cash flow statements. In particular, the case demonstrates how
cash flow statements reflect the life cycle of the firm, the nature of business and the financial
condition of the company.

C7: Financial Performance of Major Steel Firms

The balance sheet, income statement and cash flow statements of major steel firms in India are
presented. Students are required to assess the financial performance of these firms. The objective is
to introduce financial statement and industry analysis.

C8: Value Based Management at Marico Ltd.

The case presents measures of financial performance and health for Marico. The measures include
economic profit (also known as Economic Value Added) and other classic measures, such as financial
ratios and stock price performance. Students are asked to evaluate the strategy and estimate the
potential value creation ability of Marico. The objective of the case is to introduce principles of value
based management, and show how to interpret the range of financial criteria presented and reflect on
the consistency of those criteria in measuring value creation of firms.

MODULE 2: CAPITAL BUDGETING AND DISCOUNTED CASH FLOW VALUATION

C9: Valuation Problem Set (B)
The valuation problem set covers:
(1) Building a simple proforma,
(2) Determinants and use of valuation metrics like P/E, P/B
(3) Valuation of a public companys stock, and
(4) Evaluation of a proposed high-leverage, project finance transaction.
The learning objective is to help students gain familiarity with practical applications of valuation
techniques.

C10: Indian Premier League

The Indian Premier League (IPL) conceived by the Board of Control for Cricket in India (BCCI) is
a T20 format cricket competition. The case tracks the development of the plan and launch of the first
season of play. The case asks how attractive the plan is to all the parties involved and requires students
to assess the risk and reward of the plan. The learning objective is to help students gain familiarity
with performing discounted cash flow analysis.

xviii

Case Descriptions

C11: Option Pricing Problem Set

This case presents seven exercises designed to introduce students to option pricing using the BlackScholes/Mertons model and binomial-tree analysis and its application in capital budgeting. The
learning objective is to introduce the analysis of plain-vanilla call and put option prices.

C12: Tata Steel: The Bid for Corus

The case documents a high profile cross border acquisition by an Indian company. Students are
required to assess the strategic motives of these firms and perform a valuation analysis. The learning
objective is to introduce issues in a cross border, high leverage acquisition.

MODULE 3: WORKING CAPITAL MANAGEMENT

C13: Working Capital Management at Excel Crop Care Ltd.
In 2006, a divisional manager at ECCL commissioned a study to improve the overall working capital
management. Students are asked to make inter-firm comparisons and estimate the likely savings from
improvements.
The objective of the case is to introduce issues in overall working capital management. To explore
a range of issues in working capital management with a primary focus on accounts receivable and
inventory; extend students skills in financial statement modeling and analysis; and examine some of
the challenges in financial (and general) management of firms in developing countries.

MODULE 4: CAPITAL STRUCTURE, SHORT-TERM AND LONG-TERM FINANCING

C14: Trent Ltd. Rights Issue of Convertibles and Warrants
Trent Ltd. is faced with a large need for external financing to support growth. The case illustrates the
value of convertible debt and warrant as a financing instrument in these circumstances. The objective
of the case is to introduce issues in the design of securities.

C15: Financial Instruments Problem Set

The problem set covers valuation of some innovative financial instruments. The objective is to
introduce valuation of seven innovative financial instruments.

C16: BGR Energy Systems Initial Public Offering

The case presents the initial public offering of shares by a rapidly growing firm. The objective is to
introduce issues in going public and IPO valuation.

Case Descriptions

xix

C17: Shree Cement Ltd.

The case documents a request from a company to enhance and renew working capital limits from a
major bank. The bank has to decide whether to accept the proposal. The case introduces concepts
like maximum permissible finance.

C18: Fujairah Bank

A credit analyst at a major UAE Bank receives a proposal from an existing customer for the
enhancement of working capital limits. The case provides an understanding of the commercial
banking industry and the role of a loan officer, and asks the student to assess a proposed loan. The
case provides an opportunity for financial statement analysis.
The objective of the case is to introduce issues credit analysis and working capital estimation.

Case Map for the Benefit of

Readers
In the table given below, I have provided a link to specific chapters in standard text books like
Principles of Corporate Finance by Brealey, Myers and Allen and Fundamentals of Corporate Finance
by Stephen Ross, Westerfield, and Jaffe.
Readers may use the cases along with these or other standard text books.
Case No.

Principles of Corporate
Finance

Fundamentals
of Corporate Finance

Ch 1, 2, 3, 4, 5, 13

Ch 1, 4, 5, 6

2, 3

Ch 7, 8

Ch 9, 10

Ch 9

Ch 12

5, 6, 7

Ch 28

Ch 2, 3

8, 14

Ch 17, 18

9, 10

Ch 10, 11

Ch 6, 7

11

Ch 20, 21

Ch 22, 23

12

Ch 33, 34

Ch 29

13

Ch 30, 31

Ch 26-28

14

Ch 22

Ch 24, 13, 14, 18

14, 15, 16

Ch 14, 15

Ch 19, 20

17, 18

Ch 32

Ch 26-28