Financial Management

Course description Financial Management
Year: 2017-2018
Catalog number:
Teacher(s):
Language: English
Blackboard: Yes
EC: 3
Level: 400
Period: Semester 1 & 2, Block I, III
Hours of study: 84:00 hrs
  • Yes Elective choice
  • Yes Contractonderwijs
  • Yes Exchange
  • Yes Study Abroad
  • No Evening course
  • No A la Carte
  • No Honours Class

Admission requirements

None

Description

As financial management accounting continues to change at a rapid pace “The important thing is not to stop asking questions; curiosity has its own reason for existence” (Einstein).

Financial Management is an introductory course integrating concepts of corporate finance with investments and the money/capital markets. Topics include the role of money in the economy; the time value of money; financial analysis and planning; security valuation and capital market theory, capital budgeting; short- and long-term financing; and working capital management. Value maximization and risk/return trade-offs in financial decision making are employed as integrative concepts throughout the course. The idea is to make exercises in advance - in groups -, in order to reinforce participants’ knowledge and understanding. Moreover case studies will be used that are discussed in class. To enliven the classes and to make the link with actual business, the lecturer and invited guest speakers will share personal practical experiences.

This course – action-based learning - is intended for anyone interested in decisions which are made based on financial analysis, applying the input-process-output model of Situation-Challenges-Value Proposition.

Topics covered:

  • Students will estimate cash flows and risk and use these values to compute NPV and IRR. Students will be able to adjust cash flows to account for changes in working capital, asset disposal, and depreciation; make purchase decisions based on these calculations; explain how to make decisions when capital constraints exist or when projects are mutually exclusive.
  • Students will solve equations involving a single payment, an annuity or complex cash flows. Students will choose among investment opportunities, payment arrangements, etc. based on these calculations.
  • Students will evaluate corporate performance using comparative analysis. Based on this analysis they can relate strengths and weaknesses and make and support recommendations to improve financial performance and = create sustainable long-term value.

Course objectives

This course provides students with insights in value creation: to compute the value of expected future cash flows at any point of time, to be discounted to the value as of now (the decision-moment). At the end of the course students will be able to:

  • Utilize the time value of money (based on i.e. NPV and IRR) and financial statement analysis in capital budgeting decision making (investing on long-term projects);
  • Discuss the impact of risk on cost of capital (means of financing);
  • Estimate the intrinsic value of investment securities and determine whether or not they should be purchased given the current market price;
  • Discuss the benefits and disadvantages of selecting the correct capital structure of debt or equity to finance corporate activities, supporting the investments for value creation.

Timetable

Semester 1:

  • Course: Tuesday and Friday 14:00 – 17:00 hrs, September 26th – October 24th 2017
  • Exam: 14:00 – 17:00 hrs, October 27th 2017

Semester 2:

  • Tuesday & Friday 14:00 – 17:00 hrs, February 27th – March 23rd 2018
  • Exam: 14:00 – 17:00 hrs, March 28th 2017

Mode of instruction

The course emphasises small-scale, interactive teaching that focuses on real-life case studies. Students will be debriefed, in hindsight, on what really happened.

Course Load

8 3-hour interactive classes/case discussion seminars
Case preparation before each seminar
Final exam

Assessment method

Final exam (50%); Group assignments (30%); Class participation (20%)

Blackboard

Yes

Reading list

Mandatory literature (may be subject to change!)

  • Fundamentals of Corporate Finance (7th, 8th or 9th edition) by Richard A. Brealy, Stewart C. Myers, Alan J. Marcus. McGraw-Hill ISBN 9780071314749 (7th edition)

Additionally a study pack with course readings and case studies will be provided at the start of the course.

Registration

Students who follow the Management track register for the track as a whole via Usis and this Jotform.

Students who want to follow this course as an elective register via Usis and this Jotform.

Registration Studeren à la carte and Contractonderwijs

Registration Studeren à la carte via: www.hum.leidenuniv.nl/onderwijs/alacarte
Registration Contractonderwijs via: http://www.hum.leidenuniv.nl/onderwijs/contractonderwijs/

Contact

info@sbb.leidenuniv.nl

Remarks

None

Languages