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Students should have an understanding of the fundamentals of Accounting.
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 a 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 c. evaluate the financial debt sustainability and the company’s capital structure d. identify the company’s value according to the DCF model and the market
The course introduces the students to the basic principles that guide corporate managers and entrepreneurs in making their financing decisions as debt and equity financing. It also provides the analytical tools for assessing company’s financial situation, for calculating the financial convenience of an industrial investment project, for determining the value of a corporation. The aim is to provide students with a thorough understanding of techniques, theories and issues found in practical corporate finance situations.
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.
Topics: Section 1 – Financial Analysis and Financial Planning 1. Accounting statements: Capital Employed and Invested Capital - Working capital and asset conversion cycle - Earnings 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 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 and practical sessions on corporate cases an exercises
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.