| Course Objectives: |
businesses need funding to sustain their assets and maximise their market value. in order to obtain these funds in the most appropriate circumstances, financing methods need to be known. the aim of this course is to explain the functioning of the financial system, to teach financing techniques, to gain financial analysis skills and to provide the necessary information for investment decisions. |
| Course Content: |
the functioning of the financial system, financing techniques, financial analysis, financial planning, investment decisions, financial audit, interest calculations, time value of money, risk and Return, Ratio Analysis, working capital management, cash management, inventory management, capital budgeting, financial theories |
Course Learning Outcomes (CLOs) are those describing the knowledge, skills and competencies that students are expected to achieve upon successful completion of the course. In this context, Course Learning Outcomes defined for this course unit are as follows:
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| Knowledge
(Described as Theoritical and/or Factual Knowledge.)
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1) Can give examples of investment and finance decisions taken by finance managers. Distinguish between real and financial assets. Knows the advantages and disadvantages of establishing a business as a company.
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2) Explains why the company's financial goal is to increase its market value. Knows how financial markets and institutions direct savings to investment. Knows the basic structures of mutual funds, pension funds, banks and insurance companies.
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3) Explains the functions of financial markets and institutions. Interprets the information in the Balance Sheet, Income Statement and Cash Flow Statement. Calculates Market Value and Book Value. Explains why Income is different from Cash Flow.
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4) Knows the principles of taxation of company income and personal income. Can measure and interpret the market value and market value added of a publicly traded company. Calculates and interprets Economic Value Added and returns on capital, assets and equity.
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5) Distinguishes between coupon rate, current yield and yield-to-maturity of the bond. Calculates the market price of a bond with a given yield-to-maturity, and the yield of a given bond, Explains why prices and yields move in the opposite direction. Can show why bonds exhibit interest rate risk.
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6) Knows why investors pay attention to bond ratings and demand higher interest rates from lower-grade bonds. Understands stock reports on the Internet or on the financial pages of newspapers. Calculates the present value of a stock given future dividend estimates and future price. Can use share valuation formulas to derive the expected rate of return for a stock.
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7) Calculates the internal rate of return of a project and knows what to consider when using the internal rate of return rule. Can calculate the profitability index and use it to choose between projects when funds are limited. Can identify cash flows that can be appropriately attributed to a proposed new project.
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| Skills
(Describe as Cognitive and/or Practical Skills.)
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1) Calculates and interprets key measures of operating efficiency, leverage and liquidity. Can show how profitability depends on the effective use of assets and the ratio of profits to sales. Knows that the sustainable growth of businesses depends on both the dividend distribution policy and the return on equity.
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2) Compares the financial situation of the business with its competitors and its own situation in previous years. Calculates the future value of a money invested with a given interest rate. Calculates the present value of a future payment. Calculates the present and future value of a series of cash payments.
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3) Can find the implied interest rate given the current and the future values. Compares the interest rates given for different time periods. Knows the difference between real and nominal cash flows and the difference between real and nominal interest rates.
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4) Can interpret Price-Earning ratios. Can calculate the net present value of an investment and use it in the selection of competing projects. Knows the payback rule and can explain why it doesn't always make shareholders better.
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5) Calculates the cash flows of a project from standard financial statements. Knows how the tax liability of the business is affected by depreciation and how this affects the value of the project. Knows how changes in working capital affect the cash flows of the project. It can use sentiment, scenario and break-even analysis to see how project profitability may be affected by errors in estimates.
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| Competences
(Described as "Ability of the learner to apply knowledge and skills autonomously with responsibility", "Learning to learn"," Communication and social" and "Field specific" competences.)
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| Week |
Subject |
Materials Sharing * |
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Related Preparation |
Further Study |
| 1) |
Company Goals and Management, Investment and Financing Decisions, Financial Markets and Financial Institutions. |
Textbook
Materyal
|
- -
|
| 2) |
Accounting and Finance, Measuring Company Performance |
Textbook
Materyal
|
- -
|
| 3) |
Time Value of Money, Present and Future Values, Compound Interest, Multiple Cash Flows, Annuities, Perpetuities. |
Textbook
Materyal
|
- -
|
| 4) |
Bond Valuation, Bond Market, Interest Rates and Bond Prices, Yield to Maturity, Yield Curve, Corporate Bonds and Insolvency Risk |
Textbook
Materyal
|
- -
|
| 5) |
Stocks and Stock Market, Stock Valuation, Market Values, Book Values and Liquidation Values, Dividend Discount Model, Growth Shares and Income(Value) Shares |
Textbook
Materyal
|
- -
|
| 6) |
Net Present Value and Other Investment Criteria Net Present Value (NPV), Payback Rule, Internal Return Rate, Profitability Index |
Textbook
Materyal
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- -
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| 7) |
Using Discounted Cash Flow Analysis in Making Investment Decisions. Calculating Cash Flows. Project Analysis. How Firms Organize the Investment Process, Some "if-what?" Questions, Breakeven Analysis, Real Options and The Value of Elasticity |
Textbook
Materyal
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- -
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| 8) |
Midterm |
-
Materyal
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- -
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| 9) |
Risk, Return and Opportunity Cost of Capital: Rates of Return, Measuring Risk, Risk and Diversification. Measuring Market Risk, Capital Budgeting and Project Risk |
Textbook
Materyal
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- -
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| 10) |
Weighted Average Cost of Capital and Company Valuation: Cost of Capital, Weighted Average Cost of Capital, Measuring Capital Structure, Calculating and Interpreting Weighted Average Cost of Capital, Valuing an Entire Business |
Textbook
Materyal
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- -
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| 11) |
Corporate Finance, Creating Value through Finance Decisions, Corporate Finance Patterns, Common Stock, Preferred Stock, Convertible Securities |
Textbook
Materyal
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- -
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| 12) |
Public Companies, Public Offerings of Companies, Shelf Registration System, Market Response to Share Issues and sales to predetermined list of investors. |
Textbook
Materyal
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- -
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| 13) |
Debt Policy, Effect of Borrowing on Firm Value in a Tax Free Economy, Capital Structure and Corporate Tax |
Textbook
Materyal
|
- -
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| 14) |
Dividend Policy, Limits on Dividends, Share Dividends and Share Splits, Share Repurchases, Equity Repurchases and Share Valuation |
Textbook
Materyal
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- -
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| 15) |
Information Contents of Dividends and Buybacks, The Irrelevance of Dividends in Perfect and Efficient Capital Markets and the Assumptions Behind, Why Dividends Can Increase or Decrease the Value, Taxation of Dividends and Capital Gains |
Textbook
Materyal
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- -
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| WORKLOAD OF TEACHING & LEARNING ACTIVITIES |
| Teaching & Learning Activities |
# of Activities per semester |
Duration (hour) |
Total Workload |
| Course |
14 |
3 |
42 |
| Laboratory |
0 |
0 |
0 |
| Application |
0 |
0 |
0 |
| Special Course Internship (Work Placement) |
0 |
0 |
0 |
| Field Work |
0 |
0 |
0 |
| Study Hours Out of Class |
0 |
0 |
0 |
| Presentations / Seminar |
0 |
0 |
0 |
| Project |
0 |
0 |
0 |
| Homework Assignments |
0 |
0 |
0 |
| Total Workload of Teaching & Learning Activities |
- |
- |
42 |
| WORKLOAD OF ASSESMENT & EVALUATION ACTIVITIES |
| Assesment & Evaluation Activities |
# of Activities per semester |
Duration (hour) |
Total Workload |
| Quizzes |
2 |
16 |
32 |
| Midterms |
1 |
15 |
15 |
| Semester Final Exam |
1 |
30 |
30 |
| Total Workload of Assesment & Evaluation Activities |
- |
- |
77 |
| TOTAL WORKLOAD (Teaching & Learning + Assesment & Evaluation Activities) |
119 |
| ECTS CREDITS OF THE COURSE (Total Workload/25.5 h) |
5 |
ECTS Information Package / Course Catalogue
