Course Contents

• Introduction: The Goals of Managerial Finance, the Role of Financial Managers, Financial Decisions, Basic Forms of Business Organizations, the Financial Institutions and Markets, Corporate Tax Structure. • Financial Statements & Cash Flow: A brief history of Accounting and financial statements: The Balance sheet, The Income Statement, Statement of retained Earnings, Statement of cash flows. • Analysis of Financial Statements: The Scope and Purpose of Financial Analysis, Financial Statement Analysis, Horizontal Analysis, Vertical Analysis, Ratio Analysis; Liquidity Ratios, Activity Ratios, Leverage Ratios, Profitability Ratios, Market Ratios, Summary and Limitations of Ratio Analysis, the DuPont Equation • Short Term Financing: Trade Credit, Bank Loans, Banker’s Acceptances, Commercial Finance Company Loans, Commercial Paper, Receivable Financing, Inventory Financing. • Time Value of Money: The Interest Rate, Simple Interest, Compound Interest, Compounding More than Once a Year, Future Value, Present Value, Solving for interest rate and Time, Future Value of an Annuity, Present value of an Annuity, Perpetuities, Effective Annual Interest Rates, Amortizing a Loan. • Bond Valuation: Introduction of Bonds, Bond Ratings, Different types of Bonds, Bond Markets, Yield to Maturity • Equity Markets and Stock Valuation: Common Stock Valuation, Some features of Common and Preferred Stocks, The Growth Models • Capital Budgeting: Capital Budgeting Decision Process, Finding the Initial Investment, Finding the Operating Cash Inflows, Finding the Terminal Cash Flow, Overview of Capital Budgeting Techniques, Payback Period, Net Present Value, Internal Rate of Return, Comparing NPV and IRR Techniques.

Course Synopsis

The course introduces the theory and practice of financial management to students who are largely unfamiliar with finance. The course covers the analytical tools used in Financial Statement Analysis, Time Value of Money, Short Term Financing, The Management of Working Capital, Investment Decisions, Fundamental Valuation Techniques, and Capital Budgeting Techniques.

Course Learning Outcomes

After the completion of this course, students will be able to: • Understand basics of financial management • Analyze financial statements. • Conduct horizontal / vertical analysis. • Learn concept of Time value of money. • Understand, calculate and interpret a range of basic financial ratios appropriate to a set of financial statements, particularly in the key areas of profitability, solvency/liquidity and market ratios • Evaluate proposals through Capital Budgeting Techniques.