Managerial Finance Course Outline
Course Overview
This course provides a comprehensive understanding of the principles of finance applied in managerial decision-making. It covers financial analysis, planning, capital budgeting, and the strategic use of financial resources to optimize business value.
Module 1: Introduction to Managerial Finance
- 1.1. Understanding Managerial Finance
- Definition and scope
- Role of finance in business management
- Key financial goals (profit maximization vs. wealth maximization)
- 1.2. Financial Management vs. Accounting
- Differences between finance and accounting
- Relationship between financial management and business strategy
- 1.3. The Financial Environment
- Financial markets and institutions
- Overview of financial instruments and types of business organizations
Module 2: Financial Statement Analysis
- 2.1. Understanding Financial Statements
- Balance sheet, income statement, and cash flow statement
- Key financial ratios and metrics
- 2.2. Ratio Analysis
- Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios
- Interpreting financial health and performance
- 2.3. Cash Flow and Financial Planning
- Cash flow analysis
- Budgeting and forecasting
Module 3: Time Value of Money
- 3.1. Basics of Time Value of Money (TVM)
- Present value (PV) and future value (FV) concepts
- Discounting and compounding
- 3.2. Applications of TVM
- Annuities, perpetuities, and mixed cash flows
- Loan amortization and retirement planning
Module 4: Valuation of Financial Assets
- 4.1. Valuation of Bonds
- Bond characteristics
- Yield to maturity, coupon rates, and bond pricing
- 4.2. Valuation of Stocks
- Dividend discount model
- Price/earnings ratio and market valuation
Module 5: Capital Budgeting
- 5.1. Capital Investment Decisions
- Importance of capital budgeting
- Types of investment projects
- 5.2. Techniques for Capital Budgeting
- Payback period, net present value (NPV), internal rate of return (IRR), profitability index (PI)
- 5.3. Risk Analysis in Capital Budgeting
- Sensitivity analysis, scenario analysis, and break-even analysis
Module 6: Cost of Capital
- 6.1. Determining the Cost of Capital
- Cost of debt, cost of equity, and weighted average cost of capital (WACC)
- 6.2. Capital Structure Decision
- Debt vs. equity financing
- Optimal capital structure
Module 7: Working Capital Management
- 7.1. Managing Current Assets and Liabilities
- Components of working capital
- Working capital cycle
- 7.2. Cash and Inventory Management
- Techniques for effective cash management
- Inventory control methods
- 7.3. Credit and Receivables Management
- Credit policies
- Managing accounts receivables and payables
Module 8: Financial Risk Management
- 8.1. Types of Financial Risks
- Interest rate risk, credit risk, liquidity risk, and market risk
- 8.2. Hedging and Risk Mitigation Techniques
- Derivatives: options, futures, and swaps
- Insurance and diversification strategies
Module 9: Dividend Policy and Corporate Financing
- 9.1. Dividend Policy Decisions
- Dividend payout theories
- Factors influencing dividend policy
- 9.2. Equity Financing and Long-term Debt
- Issuing new shares vs. bonds
- Initial Public Offerings (IPOs) and secondary market offerings
Module 10: Mergers, Acquisitions, and Corporate Restructuring
- 10.1. Overview of Mergers and Acquisitions (M&A)
- Types of mergers and acquisitions
- Motives and financing of M&A
- 10.2. Corporate Restructuring
- Spin-offs, divestitures, and leveraged buyouts (LBOs)
Module 11: International Managerial Finance
- 11.1. Global Financial Management
- Foreign exchange risk and management
- International capital budgeting
- 11.2. Multinational Financial Operations
- Managing currency risks and financing global operations
Module 12: Ethical Issues and Corporate Governance
- 12.1. Ethics in Financial Management
- Financial scandals and ethical dilemmas
- Role of corporate governance in financial decision-making
Course Assessments
- Case Studies and Group Projects
- Quizzes and Assignments
- Final Exam and Course Review
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