This course focuses on the corporations' sources and uses of funds. It mainly deals with the long-term investment of the corporations, the sources of funding and the capital structure of corporations, short-term financial management, and other actions that managers take to increase the value of the business to the shareholders.
The purpose of this course is to help students develop an understanding of the principles of financial management and how these principles may be used to analyze problems and design solutions, with particular emphasis on the techniques of dealing with management decisions related to the sources and uses of funds.
Quiz 50%
Final Exam 50%
1 Introduction to Financial Management
1.1 Financial Management and Financial Managers
1.2 The Goal of Financial Management
1.3 Forms of Business Organization
1.4 Agency Problem
2 Time Value of Money
2.1 Discounted Cash Flow Analysis: Single Cash Flows
2.2 Discounted Cash Flow Analysis: Annuities and Perpetuities
2.3 Comparing Rates: EAR vs. APR
2.4 Loan Amortisation
3. Bond and Stock Valuation
3.1 Bond Valuation
3.2 Stock Valuation
4 Risk and Return
4.1 Risk and Return of a Single Asset Held in Isolation
4.2 Risk and Return in a Portfolio Context
4.3 Capital Asset Pricing Model
4.4 Efficient Financial Markets
5 Analysis of Financial Statements
5.1 Ratio Analysis
5.2 The DuPont Identity
6 Financial Planning
6.1 Overview of Financial Planning
6.2 The Percentage of Sales Approach
7 Basics of Capital Budgeting
7.1 Investment Criteria
7.2 Advantages and Disadvantages of Investment Criteria
7.3 NPV vs. IRR
8 Capital Budgeting Decisions
8.1 Project Cash Flow Estimation
8.2 Capital Budgeting Project Evaluation
9 Project Analysis and Evaluation
9.1 Scenario Analysis and Sensitivity Analysis
9.2 Break-Even Analysis
9.3 Operating Leverage
10 Cost of Capital
10.1 Overview of Cost of Capital
10.2 Individual Costs of Capital
10.3 Weighted Average Cost of Capital
11 Capital Structure
11.1 Overview of Capital Structure
11.2 The Effect of Financial Leverage
11.3 Capital Structure Theories
12 Dividend Policy
12.1 Dividend Policy Theories
12.2 Dividend Policy in Practice
13 Short-Term Finance and Planning
13.1 Working Capital Management
13.2 Operating Cycle and Cash Cycle
13.3 Cash Budget
14 Current Asset Management
14.1 Cash Management
14.2 Credit Management
14.3 Inventory Management