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Students should have an understanding of the fundamentals of Accounting.
1. Knowledge and understanding The course introduces the students to the basic principles of financing and investing decisions, providing the analytical tools for assessing company’s financial situation and company's value. The aim is to provide students with a thorough understanding of techniques, theories and issues found in practical corporate finance situations. 2. Applying knowledge and understanding The objective of the course is to strengthen the knowledge of the principles of finance with the aim of providing students with the know-how required to operate as managers or entrepreneurs within an international company. At the end of the course the student will be able to: a. realize a financial analysis and determine the company’s financial situation b. conduct a capital budgeting analysis c. identify the future financial needs of the company d. evaluate the financial debt sustainability and the company’s capital structure e. identify the company’s value according to the DCF model and the market 3. Making judgements At the end of the course the student will be able to derive financial information from the company financial reporting and thus will be in a position to analyze and provide practical guidance to Senior Management 4. Communication skills The student will be able to communicate with financial intermediaries and consultants in an effective way, leveraging on the industry language 5. Learning skills By interacting with the professor, by solving exercises and working through case studies, the student will learn to analyze and evaluate the most often encountered financial problems in today’s companies. Emphasis is set on a proactive way to address problems.
The course introduces the students to the basic principles that guide corporate managers and entrepreneurs in making their ordinary and extraordinary financing decisions in national and international companies. It also provides the analytical tools to operate in the financing and investing area. Topics covered include: financial analysis, cash flow estimation, time value of money, capital budgeting, the relationship between risk and return, cost of capital, capital structure decisions, company's valuation.
Section 1 – Financial Analysis and Financial Planning 1. Accounting statements. Working capital and asset conversion cycle 2. Cash Flow Analysis: walking through from earnings to cash flow 3. How to perform a financial analysis: ratios and cash flows 4. Long term Financial planning: basics
Section 2 – Capital budgeting 5. The time value of money. Compounding and discounting. 6. Investment analysis and valuation criteria
Section 3 – Cost of capital 7. Risk and return. Portfolio theory and The Capital Asset Pricing Model 8. The cost of capital; debt, equity and WACC
Section 4 – Capital Structure 9. Capital structure: theories. 10. The design of the capital structure. Share issues and implementing debt policies. Leveraged Buyouts
Section 5 – Company value 11. Measuring value creation. Mergers and demergers 12. Valuation techniques: DCF and Market valuation
Vernimmen Pierre, Corporate finance. Theory and practice, 2014, 4th ed. John Wiley&Sons, ISBN 978-1-118-84933-0
The course will alternate theoretical teaching – face to face lectures - and practical sessions on corporate cases and exercises to allow students to apply the concepts illustrated during classes.
At the end of the course the exam will be a written test (exercises and multiple-choice questions) on the topics covered during the course. The test is closed book. A non-programmable calculator is allowed. There is a 30 point grading scale with highest result being 30/30 and pass result 18/30. It is possible to prepare a group report (a minimum of two persons and a maximum of three) addressing subjects indicated by the professor. The report must be sent via email to the professor one week prior to the date of the exam (to which the student has registered). The project will include a written report and a short presentation to discuss the main outcomes in class. This assignment is aimed to gathering information, developing solutions or furthering the understanding of the topic, the ability to work within a team and to summarize/communicate concisely the results of the work completed. The report grade can add up to 2 points to the final grade obtained in the written test. The score granted with the group is valid for the whole academic year.