Taught by Harvard Law School faculty, Financial Analysis and Valuation for Lawyers is a Harvard Online course designed to help you navigate your organization or client’s financial goals while increasing profitability and minimizing risks.
The course will be delivered via HBS Online’s course platform and immerse learners in real-world examples from experts at industry-leading organizations. By the end of the course, participants will be able to:
- Gain a fundamental understanding of financial statements, using methodologies to extract and analyze the numbers
- Learn to translate your organization or client’s financial goals into practical legal solutions
- Recognize the variances in valuation and provide finance-driven insights
- Discover how to approach dispute and advocacy sessions, determining how and when to bring in financial experts to strengthen your case
- Hone your judgment skills to use ethical reasoning when the financial answer is not clear
About the Professors
John Coates is the John F. Cogan, Jr. Professor of Law and Economics at Harvard Law School, where he also serves as the Vice Dean for Finance and Strategic Initiatives, and Research Director of the Center on the Legal Profession. Before joining Harvard, he was a partner at Wachtell, Lipton, Rosen & Katz, specializing in financial institutions and M&A. He has testified before Congress and provided consulting services to the U.S. Department of Justice (DOJ), the U.S. Department of Treasury, the New York Stock Exchange, and participants in the financial markets, including hedge funds, investment banks, and private equity funds. He served as an independent consultant for the Securities and Exchange Commission in one of the first “Fair Fund” distributions and is currently serving as a DOJ-appointed independent monitor for one of the Global Systemically Important Financial Institutions.
Bala G. Dharan is the Robert B. and Candice J. Haas Visiting Professor and Senior Lecturer at Harvard Law School, and Visiting Professor of Accounting at MIT Sloan School of Management. He’s also a Managing Director at Berkeley Research Group, LLC, where he provides business and litigation services consulting. Dr. Dharan has extensive consulting experience in financial accounting and disclosures issues, finance, valuation, investment analysis, corporate governance, and forensic analysis and investigation.
Program Structure
Financial Analysis and Valuation for Lawyers consists of approximately 20 hours of material delivered over a six-week period. You can complete the coursework on your own time while meeting regular deadlines.
Syllabus
Financial Analysis and Valuation for Lawyers is designed to help you navigate your organization or client’s financial goals while increasing profitability and minimizing risks. Through examples of business valuations and presentations from real-world practitioners, you’ll learn how to interpret financial data, make a business case, and know what types of experts can help support your argument.
Learning requirements: In order to earn a Certificate of Course Completion from Harvard Online, participants must thoughtfully complete all 6 modules by stated deadlines.
| Modules | Case Studies | Takeaways | Key Exercises |
|---|---|---|---|
| Module 1: Understanding Financial Statements | Flowers Foods | Accounting is not equivalent to economicsFinancial statements have a standard structure and consistent elementsEarnings (net income) and cash flows can diverge | Finding key financial statementsDifferentiating between assets and expensesRevenue and Expense recognition |
| Module 2: Analyzing Financial Statements | Flowers FoodsDave’s Killer Bread | Ratios are a way to analyze, standardize, and compare many thingsKey ratios for financial statement analysis are P-to-B, PE, and gross margin | Calculating valuation and profitability ratiosMatching company financials to industries with ratios |
| Module 3: Valuation Using Comps | Albertsons | Market prices are a way to value public companiesRatios from comparable public companies can substitute for market prices | Calculating enterprise valueCalculating enterprise value to EBITDA ratio |
| Module 4: Discounting and Cost of Capital | Sparkle!Flowers Foods | Simple formulas relate FV to PVA good business is a growing perpetuityThe cost of capital (“K”) is the rate to turn FV into PVK can be estimated with two statistics (“beta” + the “market risk premium”) + the risk-free rate | Simple discounting exercisesUsing PV to analyze a legal doctrineChoosing among payment options for settlement of a lawsuitValuing a law degreeValuing Flowers Foods with a DCF model, including debt, using assumed forecasts |
| Module 5: Forecasting and Discounted Cash Flow Modeling | Sparkle!Flowers Foods | FCFs and not income are used to model enterprise valueRatios can help create + test FCF forecastsUsually we forecast 3-10 years, then end with a “terminal” year (“TY”), including terminal growth (“g”)Common sense can help estimate” g”Lawyers can ask 20+ questions to probe and test the reliability of forecasts used to value companies | Calculating EBITFinding and calculating inputs to a set of DCF forecastsEstimating and using growth forecastsCompleting a set of DCF forecasts for Flowers Foods |
| Module 6: Valuation Disputes and Advocacy | BP Oil SpillAdams v. AdamsMatrix v. RawlingsDisney v. Children’s TelevisionGolden Telecom | Accounting, finance, and valuation are key elements in many legal disputesPresent value, discounting, the perpetuity formula, and the DCF model are all used by lawyers in various ways in real lawsuitsAccounting, finance, and valuation, like law, involve constrained judgment | Estimating profit and compensation from the BP Oil Spill Fund for a company harmed by the spillValuing the hedge fund partnership interest of a husband involved in a divorceCalculating harm from a breach of contractCalculating the benefit from the misappropriation of intellectual propertyDeriving the fair value of a company using the DCF model and given inputs |
The HBS Online Advantage
- World-class faculty
- Edge-of-your-seat online learning
- Global peer collaboration and networking
- Real-world, case-based learning
Harvard Business School Online offers a unique and highly engaging way to learn vital business concepts. Immerse yourself in real challenges faced by business leaders across a variety of industries. You’ll wrestle with the same issues and imperfect information, while problem-solving and interacting with fellow learners from around the world.
Find out more here.
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