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Introduction to financial consulting

Financial Opportunities in Consulting Indiana University Professional Opportunities Orientation Program September 19, 2000. Introduction to financial consulting. Who are financial consultants? What do financial consultants offer their clients?

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Introduction to financial consulting

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  1. Financial Opportunities in ConsultingIndiana UniversityProfessional Opportunities Orientation ProgramSeptember 19, 2000

  2. Introduction to financial consulting • Who are financial consultants? • What do financial consultants offer their clients? • In what types of projects are financial consultants engaged? • What is a typical day in the life of a financial consultant? • Self-Assessment • Financial consulting as a career platform

  3. Who are financial consultants? Financial Services Litigation Support Investment Consulting Services Intellectual Asset Management

  4. Introduction to InteCap • Provide economics, valuation, and strategy consulting services • Ten offices with approximately 200 professionals with backgrounds in accounting, finance, and economics • First consulting firm in the United States to launch an integrated practice dedicated to helping companies manage and extract value from their intellectual property

  5. What do financial consultants offer their clients? • Specialized expertise • Outsourcing/Resources • Fresh perspective • Objective third party opinion • Quick turn-around • Focused attention • Structured solutions to unstructured problems • The “Why” behind the numbers

  6. In what types of projects are financial consultants engaged? Economics What the value should have been Valuation What the value is Strategy What the value could be

  7. What are the results/deliverables of these projects? Economics Expert Report, Analysis, and Testimony Valuation Written Report, Analysis, and Presentation Strategy Written Assessment, Recommendation and Implementation

  8. MARKET RESEARCH INTERVIEWS INTERNET FINANCIAL STATEMENTS Question: Why did our profit margins drop on our premium product? Fact-Finding

  9. $140 New Competitor Enters the Market $120 $100 $80 $60 $40 $20 $0 1994 1995 1996 1997 1998 1999 Answer: New competitor caused prices to drop, meanwhile production costs have increased Prices Prices Prices Prices Costs Costs Costs Costs

  10. The Infringers Infringer 1 A Better Mousetrap! = Infringer 2 Infringer 3 Economics Example by InteCap Patent Infringement Litigation The Patent What is the economic injury to the patent owner? Lost Sales Depressed Prices Opportunity Cost

  11. Retained by a global manufacturer of household appliances to perform a trademark portfolio valuation ValuationExample by InteCap Trademark Valuation Total Enterprise Value 100% Total Value of Intangibles 56% Other Intangibles Value 32% 56% Fair Market Value 34%

  12. - License to Others - Sell outright - Spin-out as new company - Donate to a university StrategyExample by InteCap Intellectual Property Quality Management (IPQM) Consultant Hired to Evaluate Strategic Option Client Dilemma How can we extract value from our non-strategic technology?

  13. What is the “typical”day in the life of a financial consultant? THERE IS NO TYPICAL DAY!!!

  14. How about a “typical” week in the life of a financial consultant? • Monday- Create graphical presentations of financial analysis • Tuesday- Travel to NYC for client meeting regarding trademark valuation • Wednesday- Conduct market/industry research and review financial and business records • Thursday- Forecast cash flows and prepare a cost of capital analysis • Friday- Participate in brainstorming discussions, begin quality-control process on analyses, and celebrate Friday with firm at happy hour!

  15. Unstructured environment? Self-AssessmentWould you enjoy being a financial consultant? Do you prefer . . . • Structured environment? • Finance only? • Finance, marketing, economics, accounting? • Concentrate in a single industry? • Variety of industries? • Compartmentalized work? • Team work? • Functional work? • Project work? • Consulting culture? • Corporate culture? Other financial career Financial consultant

  16. Consulting as a career platform • Various skills acquired as a financial consultant • CPA, CFA, MBA opportunities • Client contact and industry exposure • Foundation for many other careers

  17. Consulting as a career platformExamples of InteCap Careers Consulting:Managing Director, InteCap Investment Banking:Managing Director, Bear Stearns Marketing:Brand Manager, Procter & Gamble Sales:Account Executive, Warner Lambert Graduate School:MBA - Kellogg, Chicago, UCLA, etc. Law - Michigan, UVA, Wisconsin,etc.

  18. In Summary... Financial consultants provide • Clients with • expertise and objectivity • creative solutions • clarity and structure • Consultants with • use and development of a wide range of skills • broad career platform

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