Corporat Finance 2600-DSFRdz2FPRZ
Lecture:
1. Principles, objectives, and functions of financial management:
• Positioning of corporate finance within the science of finance
• Basic importance and definitions related to corporate finance
• Objectives and functions of financial management
• The relationship between finance and other business areas
2. Information contained in basic financial documents
• Fundamental analysis
• Ratio analysis
3. The time value of money.
• Future value and present value of money ( discounting vs compounding).
• Annuity payments in arrears and in advance.
• Perpetuities.
• Effective interest rate.
• Inflation.
4. Sources of capital
• Sources of equity capital
• Sources of debt capital
5. Short-term management of corporate finance
6. Investment decisions and their assessment in the short and long term
7. Risk and return
8. The relationship between investment and financial decisions
9. The use of real options in corporate finance - introduction
10. Financial management in international markets - introduction
Exercises:
1. Introduction to corporate finance
2. Financial statement overview - agency problems, auditor's opinion,
3. Five major components of the financial statements:
• Balance sheet
• Income statement
• Cash flow statement
• Statement of changes in equity
• Notes to the financial statements
4. Analysis of financial statements. Ratio analysis - assessment of:
• Liquidity
• Efficiency
• Solvency
• Profitability
• the company’s position in the capital market
5. The time value of money:
• Future value and present value
• Effective interest rate
• Annuity payments in advance and arrears
6. Specifics of stocks and bonds
• Differences between equity and debt capital
• Rights arising from stocks and bonds
• Types of bonds and stocks
7. Valuation of stocks using the DCF and Gordon model (including with growing dividends). Valuation of bonds with a fixed coupon rate
8. Risk and return. Dependency analysis - Capital Asset Pricing Model (CAPM)
9. The cost of capital in a company: equity, debt, and weighted average cost of capital (WACC).
10. Systematic and unsystematic risk:
• Beta coefficients
• Hamada’s model
• Economic value added
11. Assessment of investment decisions made under certainty:
• Net present value (NPV)
• Internal rate of return (IRR)
• Modified internal rate of return (MIRR)
• Payback period (BP)
• Discounted payback period (DBP)
12. Analysis of the break-even point. Operational, financial, and combined leverage
13. Assessment of operational and financial risk using the concepts of break-even point and leverage
14. Working capital managemen.
15. Mergers and acquisitions. Motives for mergers. Assessment of effectiveness. Share buybacks
Type of course
Prerequisites (description)
Course coordinators
Learning outcomes
Upon completion of the course, the student:
• Knows and understands the terminology and basic principles related to corporate financial management (K_W01).
• Has an in-depth understanding of the principles, procedures, and practices related to corporate financial management (K_W02).
• Has an in-depth understanding of the theories and economic models related to corporate financial management (K_W03).
• Has an in-depth understanding of the technological, social, political, legal, economic, and ecological processes and phenomena and their impact on corporate finance (K_W05).
In terms of skills:
• Can apply the theory of economics and finance to recognize, diagnose, and solve problems related to financial decisions within an organization (K_U01).
• Can correctly interpret social, political, legal, economic, and ecological processes and phenomena, understanding their impact on corporate finance (K_U02).
• Can independently and collaboratively prepare analyses, diagnoses, and reports on the financial aspects of an organization and sector, and present them communicatively using information and communication tools (K_U03).
• Can plan and organize individual and team work (K_U05).
• Has the ability to self-educate and improve acquired qualifications (K_U06).
In terms of attitudes:
• Is ready to assess and critically approach situations and phenomena related to the functioning of organizations in the market (K_K01).
• Is ready to think and act entrepreneurially (K_K02).
• Is ready to adhere to ethical standards related to marketing activities (K_K03).
Assessment criteria
Lecture, practical examples, interactive explanation of key concepts, exercises, case studies, group work. Classes are conducted in-person or, in exceptional circumstances, through Zoom and the e-Learning platform.
Exercises include discussion, group work, and individual work on problems encountered in businesses.
Bibliography
Basic Literature:
Cieślik R., Postuła M. (eds.) Financial Management of a Company – Theory and Practice, WN WZ UW, Warsaw 2020.
Postuła M. (ed.) Corporate Finance in Managerial Decisions, WN WZ UW, Warsaw 2016.
Supplementary Literature:
Rutkowski A. Financial Management, PWE, Warsaw 2016.
Ehrhardt M.C., Brigham E.F. Corporate Finance: A Focused Approach, 6th edition, South-Western, 2016.
Selected articles from “McKinsey on Finance”, “The Economist”.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: