Posts filed under 'SMF'

Bucket List for My Last Couple Months in Columbus

At the beginning of January, I accepted a job and will be moving away from Columbus. After nearly five years of being in Columbus and just finishing finals for the third term of the Fisher SMF program, it’s finally hitting me that I will be leaving Columbus. Here’s my bucket list for my last two months in Columbus:

Catch the Rocky Horror Picture Show live performance at Studio 35 in Clintonville, OH.

Spend a day at The Book Loft—I’ve been there many times, but I’d love to spend an early Spring day just strolling among the books.

The Book Loft in German Village (photo credit: Bookloft.com)

The Book Loft in German Village (photo credit: Bookloft.com)

Catch a Blue Jackets game before the season ends.

Catch a musical performance by Perfume Genius at the Wexner Center in a few weeks.

Try as many quirky coffee shops, restaurants, and bars in Columbus that I haven’t tried, particularly on South Fourth Street, Broad Street, and Downtown.


Winding Down…On to the Consultation Saga

As the end of the first term has come to a screeching halt, it is hard to believe that graduation is only a couple of months away. The feeling is bittersweet to say the least. While I am dying to graduate and put my new skills to the test, I have made plenty of friends that I will miss when we all go our separate ways.

Nonetheless, this last semester is extremely important to all SMF students. You will finally participate in the coveted team projects. This is a staple of the SMF program. All SMF students participate in a team project in the final term of the spring semester. This project is very much like a consulting project. You are given multiple projects to rank and then you are assigned these projects based on a multitude of factors. These companies include Nationwide, Wells Fargo, Owens Corning, The OSU Wexner Medical Center and many more.

I was lucky enough to get The OSU Wexner Medical Center, which was my first choice! I will be working with 2 classmates to develop a model that helps them determine whether it is more beneficial to outsource or make in-house. Our first meeting with our client is within the next few days so stay tuned for the next edition in the Consultation Saga!


Guess Who Came to Speak at Fisher?

So, I’m not name dropping or anything…

BUT….

Jamie Dimon came to The Ohio State University.

This is Jamie Dimon talking to the OSU football team

This is Jamie Dimon talking to the OSU football team

 

Due to the stature of Jamie Dimon, this event could not be released before his visit. Jamie Dimon came to address our SMF Corporate Finance 3 class taught by Karen Wruck. (Other students were allowed to attend if seats were available.) It was very interesting to listen to all that Mr. Dimon had to say. He reads about 5 different newspapers every morning and is constantly reading everything else and just soaking in knowledge. He spoke to not only working hard, but working smart. He also noted that he likes to talk to an expert in whatever he is interested in learning more about, because listening to him/her for 10 minutes is worth more than hours of reading.

Fisher tends to bring in quite a few of amazing speakers, such as the CEO of L Brands, Les Wexner, and the CEO of Cardinal Health, George Barrett. Last year students even flew to meet with Warren Buffet. Who wouldn’t want to play guess who and see who will be here when you come next year?!


The Restaurant Ranking

Having lived in Columbus, OH for nearly five years now, I’ve had many opportunities to sample the restaurants, and have come up with a list of my favorites. Unfortunately, I recently found out that my favorite restaurants, Deepwood, between the Short North and Nationwide Boulevard shut down on New Year’s Eve. Deepwood was an upscale American eatery with charcuterie, soups, seasonable vegetables, and duck, as well as a wonderful selection of bourbon cocktails. In remembrance of Deepwood, I will now run through my revised listing of restaurants.

5. The Pearl – this seafood restaurant is a bit newer on the Columbus dining scene (circa 2013), but from the first time I visited, I loved its many nautical themes and casual atmosphere. It has one of the best oysters on the half shell and Moscow Mules around, and water is usually served in mason jars.

4. Hyde Park – the upscale American steakhouse, replete with a raw bar, hearty soups, seafood sides, chop salads, and carbs galore. The ambiance is wonderful, staff are always top-notch, and it’s truly an experience no matter where you’re sitting in the restaurant.

3. Rigsby’s – while Marcella’s and Martini didn’t quite make the cut (both are fantastic restaurants), both lack the heartiness and simplicity, yet incredible diversity of northern Italian cuisine, incorporating various seasonal vegetables, wines, and meats.

2.  Till – by night, Till is an off the beaten path watering hole for the older university/young professional crowd, filled with pizzas, burgers, seafood, and tofu. By day, the restaurant is more of a café with the absolute BEST pour over coffee I’ve ever tasted. My barista had me sample a number of pour over variations from Till’s supply, and she compared them to strange flavors. I settled on a Burundi coffee that she likened to the taste of “car engine.” I can’t say that I’ve ever tasted car engine, but the coffee keeps me coming back. It’s very close to campus on King Avenue, closer to Neil Avenue, and I’ve found myself many a time studying for hours on end at the coffee bar.

Number One Restaurant: L'Antibes (credit: Columbus Restaurants)

Number One Restaurant: L’Antibes (credit: Columbus Restaurants)

1. L’Antibes – in my view, this is Columbus’ best kept secret. Usually when someone asks me my favorite restaurant and I respond with L’Antibes, they usually have no idea what I’m talking about. While its official address is on North High Street in the Short North/Italian Village, its entrance is really on Warren Street. Inside the restaurant stand about ten or so square or round tables seating two to four with white table cloths, lots of natural light, pale yellow walls, and tasteful yet discreet artwork scattered throughout the restaurant. It’s very quiet, which is such a break with all the noisy Columbus restaurants where you can’t hear the people with whom you’re having dinner. The restaurant bills itself as French with American influences. Any of the escargot and salmon dishes are to die for, as well as any of the desserts or dessert wines.


Shape your degree

One of the best things about getting a Master in Finance degree at The Ohio State University is the ability to shape your degree in any way you want. Aside from being in your available electives for your specialization, such as, Corporate Finance 3 & 4, Financial Statement Analysis, Enterprise Risk Management 1 & 2, etc, there are many other classes you can take to further your knowledge in specific area. For instance, I am taking Managerial Accounting for Decision Making. I plan on pursuing a career in Corporate Financial Planning and Analysis when I graduate. Because of Fisher’s ability to let you branch out, you can take classes in many other areas such as strategy, accounting, operations, and many others. If you feel it will benefit you and your career search, Fisher can probably make it happen.

With these classes, I was able to mold my degree into exactly what I want. I am taking a few accounting classes (Financial Statement Analysis 1 & 2 and Managerial Accounting for Decision Making) to further my knowledge in accounting to become a better analyst. By being able to read financial statements, understand managerial accounting (contribution margin, pricing, budgeting) and understanding the past performance of the company, I can better understand what has and hasn’t worked and more accurately project the future and improvements. I am also taking negotiations with Prof. Lewicki. Negotiations, while it may not benefit me much now other than negotiating my salary and benefits when accepting a job (which is reason enough), will allow me to become a better CFO or manager when I take part in acquisitions or anything else that requires me to negotiate a price with a seller, supplier or whoever it may be.
In the end, being able to mold your degree will help you to mold your career…….which is why we are here, isnt it?!


Time for Electives

The beginning of the SMF program was very structured: everyone takes the basic list of courses, which includes Corporate Finance I, Investment Management I, microeconomics (formally, Industry, Risk & Pricing), and several others. Certainly, one has the opportunity to take a few electives during the first two terms, but up to only three.

There are only two required courses in the third the fourth terms collectively, which are macroeconomics (formally, Global Financial Markets) and Team Projects (which are essentially client projects the program acquires for students to work on with the clients), which allows for up to ten electives in Spring semester.

Because I am specializing in corporate finance, I’ve chosen to take Corporate Finance IV with Professor Karen Hopper Wruck. Professor Wruck is a widely published and recognized expert on corporate restructuring. Our first two classes have combined cases that she has written demonstrating how value can be created through different types of restructuring (e.g., borrowing roughly the net worth of a firm, paying the proceeds out as a special dividend, and using the increased leverage to effect prioritizing cash flow).

Another elective I’m taking is Enterprise Risk Management with René Stulz. Dr. Stulz is a world-renowned expert in risk management and is a member of the Board of Trustees of the Global Association of Risk Professionals. Our first two classes have focused on the mechanics of many of the derivatives crises, such as Barings, Lehman Brothers, Orange County, and Metagesellschaft, with the primary lesson that many of these crises came about not because derivatives are inherently bad, but because derivatives, like the machinery of almost any profession, need to be handled with care and with full knowledge of the associated risks.

In terms of fascinating classes and distinguished professors, the list goes on, and I continue to both broaden my knowledge of the various areas of finance and dive deeper into corporate finance and how firms create value for creditors and shareholders. 


Merger Simulations!

Dr. George Pinteris, academic director for the Specialized Masters in Business Finance program at Fisher College of Business, wanted to try out a merger simulation with his Corporate Finance II classes. He assigned us the Wrigley-Mars merger cases to analyze. Half the class read the information to which Mars was privy, the other half Wrigley. My team and I were assigned to Mars (the buye), in the transaction. Dr. Pinteris used one lecture period as an initial discussion of the information to which both parties had access and to emphasize that there was more to this transaction than the price Mars paid to acquire Wrigley.

Source: http://store.darden.virginia.edu/

Source: http://store.darden.virginia.edu/

My group based our negotiation strategy on five factors, in addition to the price: the placement of the current target’s CEO; the plans for one of the target’s most treasured and iconic assets (Wrigley Headquarters in Chicago); the naming of the merged company; the independence of the target’s management post-merger; and the extent to which the acquirer can impose efficiency measures on the target after the merger. As the buyer, we packaged three deals with varying premia over the current share price and over the intrinsic value—an initial offer, a target offer, and a walkaway offer.

When we began negotiations, because we were the buyer, we made the first offer: a meager control premium over current market value, with a number of conditions that granted the target substantial operational independence. The target’s counteroffer was revealing: they mentioned that they wanted a more equitable share of the synergies from the merger and countered with a very high offer outside our acceptable range. We came back with a larger control premium, with a number of more restrictive terms than the initial offer. For example, we did not place the target’s CEO in as important a position and we insisted on greater efficiency measures. The target countered with $79, still intent on capturing larger portions of the synergies in the transaction, but this time they disapproved of our demotion of the target CEO. We offered to increase our price to $75 and place the target CEO on the Board of Directors. They offered to go down to $77 with the same conditions. My group did not want to increase our price, but we had reached a set of conditions with which we were very pleased. When we offered an additional board seat, the other team acted utterly taken by surprise. After about five minutes of hushed discussion in their group hunched over their own valuations in Excel, they accepted. It was a term that neither of our groups had seriously considered, but it was something that ultimately allowed us to close the deal at a price more amenable to us, the buyer.

We had begun the negotiations with the goal of getting the lowest price with terms that would preserve Wrigley’s independence. Instead, we walked away by paying $3 over our target, but the counterparty had practically given us as much as we needed to achieve synergies by ceding decision-making authority over its Chicago headquarters, over its management and employees, and general operational aspects of the business—Wrigley had practically handed us all the synergies we needed to make the deal worth it.

In Dr. Pinteris’ next lecture, we discussed our experiences in the merger. All of our negotiation experiences had been quite different, and Dr. Pinteris used this lecture to illustrate the different scenarios that play out with different zones of agreement on price and to illustrate the importance of qualitative factors in the negotiations. I thoroughly enjoyed this simulation that Dr. Pinteris set up for us—it was hands-on and engaging, and I think I learned more about M&A negotiations than if I had simply read the case and participated in the class discussion.


The North Market

One of the staples of Columbus is the North Market. The North Market is basically a farmer’s market, and a fantastic one at that. You can buy fresh salsa (AMAZING), fresh fruits, homemade chocolate, homemade bread, different cultural foods, homemade popcorn, and fresh spices.

Spices Salsa

 

I would like to touch on the salsa and spice shops. The salsa shop has a vast array of salsas, hot sauces and a few other things. The salsa is the best I have ever had. I usually like salsa with a kick, but I have taken a liking to roasted garlic and mild salsa. Both of these are very sweet and VERY good.

The spice shop is by far my favorite, though. The spice shop has a vast array of spices. Most of the spices do not contain salt which keeps them from being “diluted.”  These spices are very potent and very good. A recipe for chili I had called for 2.5 tablespoons and 1 tablespoon was more than enough. Their chili seasoning has won multiple contests. They also have extracts, peppers, sticks of cinnamon, etc. What you can buy and the combinations are almost endless.

A full list of vendors can be seen here.

I highly recommend visiting this place!


A November Treat

“A snowball in the face is surely the perfect beginning to a lasting friendship.” 
― Markus ZusakThe Book Thief

 

One of the misconceptions about Ohio and snow is the need for there to be unbearable temperatures and for it to be just down-right cold! Well, I got hit in the face with a snowball today and found a lasting relationship with Columbus. I looked outside and thought, “UGH! Snow…”

Now this looks cold!

Now this looks cold!

Then…

I walked outside and thought it’s not even cold, and the snow is actually snow and not ice and slush and all the other nasty things that make me hate winter. Coming from the south, I thought this experience would be an awful one, but I am in love with this weather.

Fisher

Doesn't even look cold!

Doesn’t even look cold!

 

Other than the weather not being nearly as bad as I thought it would be, you can see 3 of the 5 buildings at Fisher in the pictures above. One of the best things about Fisher is, I can get to all 3 of these buildings through temperature controlled underground tunnels.

Yes… You read that correctly. There are underground tunnels at Fisher. I can go to Mason Hall and get a hot chocolate or coffee and walk back to class without ever stepping outside.

I can definitely say that when I was hit in the face with the snowball this morning, it made a lasting relationship. I cannot wait for the months to come in Columbus and at Fisher!

 

 


Valuing Public Companies

Sometimes you do assignments for classes or complete classes without realizing just how valuable that assignment or class was. One such assignment for me was a comprehensive valuation report on a publicly-traded company in our introductory finance course in the SMF program. Our professor and the academic director of the program, Dr. George Pinteris, gave us certain parameters for the projects—such as no companies in the industrials or financials industry verticals. He also restricted us from valuing certain companies that other students had done before, such as Nordstrom, L Brands, and Coca-Cola. Professor Pinteris segmented our class into groups. My group chose The Boeing Company. For the report, we had to use Capital IQ, Bloomberg, IBIS World Industry Reports, and several other sources of information. For example, in understanding the operating margins for Boeing, one must understand the price directions for key inputs, such as steel, composites, titanium, and aluminum. To understand which way those prices are moving, one must understand key economic assumptions and inputs for the prices of those commodities.

Capital IQ allows users to generate fast tables of comparable companies

Capital IQ allows users to generate fast tables of comparable companies

I especially enjoyed this project because it drew on the strengths of my team members. One member has a background in energy investments and so had keen insights into oil and natural gas commodity markets. My own background in public policy and politics informed the analysis of Boeing’s strategic direction as the United States Congress wrestles with the issue of how to stimulate exports (Boeing earns half its revenues by exporting goods). All of us were proficient at financial modeling, but one team member was especially adept and provided the team with reams of data and analysis on Boeing’s historical and projected financials. Her analysis includes several valuation methods, such as dividend discount model, discounted cash flow using multiples, transaction multiples, and market multiples. Dr. Pinteris stressed the need to produce a professional report, with an accompanying Powerpoint and presentation. In short, Dr. Pinteris’ project stressed a number of skills needed in the financial industry: teamwork, professionalism, modeling skills, and strategic thinking.


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