Course Details


Course Name: Capital Allocation
CPD Hour: 1 Hour
Type: Online/Video
Price: €15


Description:
In this course we are going to tackle capital allocation, that is, how the CEO, and you as their strategic partner, go about deploying cash inside the business. CEO’s are ultimately measured on their record of generating returns for their shareholders. The single most important determinant of shareholder returns is capital allocation. Knowing what tools you have available and when to use them is the key. We’ll look how and when you source cash. We’ll also look at the strategies behind selecting the most optimal use of that cash, which may include buying back shares in yourself.


Topics:
Introduction
Jack Welch
Warren Buffet
Teledyne
Operators and Allocators
Lesson Overview
What is Capital Allocation?
Cash Sources and Deployment
Capital Allocation Decisions
Gamestop Corp Case Study - Intro
Gamestop Corp Case Study - Statement Overview 1
Gamestop Corp Case Study - Statement Overview 2
Gamestop Corp Stock
3 Things we learned
Operating Sources of Cash for Allocation
Charlie Munger
Centralized Capital Allocation
Working Capital
EBITDA
Operating Cash Flow
Free Cash Flow
Review
Investment of Capital
The Investment Universe
Relative and Absolute Returns Matter
Warren Buffet Quote
Oversized Bets
Focus on Cash
Being Contrarian
Diversify or Not
Pitfall of Diversification
Hidden Value
Warren Buffet Quote
Review
Cash Raised
The Right Mix
Maintaining Excessive
Too Much Equity Increases Your Hurdle
Patience
Issue Shares Judiciously
DEBT vs Shareholder Value
Review
Dividends and Stock Repurchases
Taxes and Valuation
Dividends can Suffer from Tax Leakage
Dividend Yield Attracts Certain Investors
Special Dividends Show a Lack of Imagination
Historical S and P 500 P/E Ratio
Think of Valuation in a Long Term Context
Exit
Zero Sum Scenario 1
Zero Sum Scenario 2
Formula
Share Buybacks
Tender Offers
Stock Splits
Review
Shares Bought Back
Six Common Traits of Master Capital Allocators
Master Capital Allocation
Dividends are Generally Bad
Considers the Taxes
Measures the Cash
Exercises Long-Term Patience
Avoids Shareholder Dilution
Looks for Buyback Opportunities
CEO and CFO
Review Question 1
Review Question 1 - Debrief
Review Question 2
Review Question 2 - Debrief
Review Question 3
Review Question 3 - Debrief
Review Question 4
Review Question 4 - Debrief







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