Standing before the CEO of a prominent credit union, Purdue students faced a critical $6 million decision. The twist? This was no real-world number. Instead, students had to decide whether to approve or deny this hypothetical loan amount as part of an experiential learning opportunity at the Mitchell E. Daniels, Jr. School of Business.
December 1, 2023, marked the conclusion of the Financial Management Research Challenge, a case competition hosted by the Daniels School in collaboration with the Purdue Federal Credit Union (PFCU).
The competition, which was started by Clinical Assistant Professor of Finance Fabricio d’Almeida in 2021, included 232 students from financial management courses MGMT 304 and MGMT 310, who acted as PFCU credit analysts and used their newly acquired financial acumen to determine whether a $6.26 million loan should be approved or denied.
For the potential borrower, students projected financial statements and assessed crucial financial ratios. In addition, they extended their learning beyond the textbook by examining and considering qualitative information about the prospective borrower and researching real-world numbers to assess the loan.
“Participating in the competition offered us a unique opportunity to step into the shoes of a credit loan analyst,” says Jason Ramirez, a sophomore in finance and member of one of the winning teams. “Through the process of consolidating data, evaluating key ratios, and considering economic factors, we reached informed decisions on financial loan assessments. The competition provided insights into the world of credit analysis, offering a glimpse of what a career in this field could be like.”
In the first round, students recorded a brief presentation of their final accept/reject decision and research-backed reasoning. Each video submission was judged by a panel of Daniels School of Business alumni according to a rubric. In total, 65 alumni judges participated in evaluating presentations.
In the second round, the six top-scoring teams were invited to present in person at the PFCU headquarters in West Lafayette. PFCU CEO Bob Falk and three of his top credit analysts listened to each presentation, asked tough questions, gave feedback, and elaborated on the real process of evaluating a multi-million-dollar commercial loan.
“It was great to be able to present to professionals and challenge ourselves to be prepared to answer any and all off-the-cuff questions,” says Elsa Ravaris, a sophomore majoring in finance with a minor in human resource management.
In the end, Falk and his team selected two winning groups: one team from MGMT 310 consisting of Jason Ramirez, Noah Sakaitani, Sreeya Thirunagari, Elsa Ravaris and Gianna Stephan, and one team from MGMT 304 consisting of a solo presenter, Vikram Oddiraju. Each member of the two winning teams was awarded $100.
“The competition opened my eyes to what finance professionals do on a daily basis. This experience taught me useful analysis skills and helped me build on my communication and team-building skills, which were crucial for achieving the victory,” says Stephan, a junior studying quantitative economics, data analytics and general management.
A new group of high-achieving students and prospective financial analysts will join next year’s competition when it begins in September 2024.
