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CEO’s, CFOs and Boards are ultimately measured on their record of generating returns for their shareholders, and the single most important determinant of shareholder returns is capital allocation. This course takes a compelling look at how to master capital allocation to create shareholder value and competitive advantages for your organization.

This course covers:

  • How capital allocation can be used to supersize shareholder returns
  • How to define capital allocation and evaluate cap allocation decisions
  • Operating sources of cash
  • Investment of capital
  • Cash raised from financing
  • Dividends and repurchases

We also take a look at the six traits of highly successful CEOs, such as Jack Welch and Warren Buffet, who have proven to be masters of capital allocation over decades of creating astounding results for their shareholders.

Learning Objectives

  • Define what is capital allocation and identify the relevant tools
  • Identify and evaluate sources of cash generated by the business
  • Integrate financing strategy with capital allocation to preserve flexibility and maximize returns
  • Evaluate uses of surplus cash to pay dividends and/or repurchase shares
Last updated/reviewed: September 17, 2017

25 Reviews (102 ratings)Reviews

3
Member's Profile
Not as enlightening as some of Blair's other classes. Lots of hero worship of Welch and Buffett, and lots of sloganeering. The notion that a CEO must be EITHER an operator or a capital allocator is absurd. Most boards expect their CEOs to perform both roles. The Gamestop example was excellent and the share buyback material was very helpful. The rest of the course suffered from a lack of concrete, actionable advice.
5
Member's Profile
Once again Blair delivered a jam-packed session with great enthusiasm and eagerness to explain very important concept in Finance. This was a very insightful presentation with excellent content which I highly recommend to every Finance professional. Many thanks to both Proformative and to Blair.
5
Member's Profile
This as an exceptionally informative course. The instructor provided practical insights and opinions that add significant value to the underlying material. Mr. Cook is one of the best instructors I have experienced online and I highly recommend his courses.
5
Member's Profile
Excellence in motion! Mr. Cook once again delivered a 5-star piece. He really has a knack of explaining/ delivering contents in an excellent manner. Great lecturer/ speaker. Well done sir. Great job!
4
Member's Profile
As straight forward as the course seemed to be, it covered a lot of ground and I need to sit through it again. It is one of those classes that needs one's undivided attention.
5
Anonymous Author
The instructor was on one of the best I come across for my continuing education courses. He was enthusiastic and made the material relatable.
5
Anonymous Author
Very informative course. This is an area that is very important to the business but not easy to find courses that cover this topic.
5
Member's Profile
A very informative course, full of useful examples, very well presented, and make a complicated topic quite easy. Thank you.
5
Anonymous Author
Incoming and sitting CFO's would benefit greatly from this course. In depth, full of insight, and clearly delivered.
5
Member's Profile
Great instructor, great course. Helpful for CFOs and non-CFOs alike; great information to be aware of
5
Anonymous Author
I continue to be impressed with Blair Cook's lessons. Very important topic and expertly presented.
4
Anonymous Author
This was a good conceptual course to reinforce the core purpose of a for-profit entity.
4
Anonymous Author
Great course. Discusses an important topic that many overlook.
5
Member's Profile
Great, effective instructor. Definitely a fun course to take.
5
Anonymous Author
Valuable course for someone on track to be a finance leader
5
Member's Profile
Blair is very informative and always fun to listen to!
4
Member's Profile
Thank you very much for the valuable course.
5
Anonymous Author
Excellent, the best course you provide.
4
Anonymous Author
Good content and well organized
5
Member's Profile
Good overview of capital...
5
Anonymous Author
Good introductory course.
5
Member's Profile
great course!
4
Anonymous Author
Good overview
5
Member's Profile
Interesting
4
Member's Profile
Good study

Prerequisites

Course Complexity: Intermediate

Prerequisite: Exposure to corporate finance

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

2 QuestionsCourse Questions and Answers

User picture

I enjoyed taking this course, however where can I find more information regarding analyzing share buybacks? In particular, how do I determine when it is better to buyback shares as oppose to making other investments, e.g., acquisitions or other growth initiatives?

Thanks in advance.

Instructor
Member's Profile

Share buybacks are discussed in most finance textbooks, but the level of discussion mimics what is included in the course. The real crux of your question is what is the best use of free cash - to buy back own shares or to grow the business. This is a multi-faceted question that is unique in each case.

The mathematical answer is to compare the returns. If you believe your stock is undervalued, the buyback has an associated return based on the delta between trading price and intrinsic value. Compare that return against what an investment in growth might do for share price. Easier said than done because both analyzes are based on assumptions, though arguably the buyback has a higher certainty of operating assumptions. However, to generate the return under the buyback, the stock price needs to normalize, the timing of which is uncertain.

If you find someone who has figured out a way to model these uncertainties to make this decision, please do share. It would advance discussion in boardrooms everywhere, which generally go along the lines, do we believe management can profitably grow the business or should be just look at the most efficient way to return capital to shareholders. Sadly, the discussions rarely get into the deep valuation type analysis.

Course Syllabus
INTRODUCTION AND OVERVIEW
  11:02What is it and how can I evaluate it?
  5:57Operating sources of cash for allocation
  8:20Investment of capital
  5:35Cash raised from financing
  13:29Dividend and stock repurchases
  3:33Six common traits of master capital allocators
Continuous Play
  55:17Mastering the Capital Allocation Process as a Business Leader
SUPPORTING MATERIALS
  PDFSlides: Master Capital Allocation
  PDFMaster Capital Allocation Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM