Studiegids

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Financial Management

Vak
2019-2020

Admission requirements

Not applicable

Description

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.

This course 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 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:
1. use the basic techniques for investment evaluation;
2. link the major debates in corporate finance to real life cases;
3. have a real understanding of the major debates in corporate finance;
4. Utilize the time value of money (based on i.e. NPV and IRR) and financial statement analysis in capital budgeting decision making;
5. Discuss the impact of risk on cost of capital;
6. Estimate the intrinsic value of investment securities and determine whether or not they should be purchased given the current market price;
7. Discuss the benefits and disadvantages of selecting debt or equity to finance corporate activities.

Timetable

The schedule can be found on the Leiden University student website

Mode of instruction

2 hours interactive lectures, presentations and discussions every week, 6 weeks long.

Assessment method

Assessment is as follows:

20% for class participation/presence,
30% for group assignments on cases that are presented and discussed in class,
50% for the final written exam (multiple choice).

In order to pass students must have a total grade of at least a 6 (six).

Blackboard

blackboard

Reading list

Brigham/Ehrhardt/Fox, Financial Management : Theory and Practice - 9781473729605

Signing up for classes and exams

You have to sign up for classes and examinations (including resits) in uSis. Check this link for more information and activity codes.

There is only limited capacity for external students. Please contact the programme Coordinator

Contact information

Programme Coordinator: [ms. Esme Caubo] (mailto:ictinbusiness@liacs.leidenuniv.nl)

Remarks

Also register for every course in Blackboard. Important information about the course is posted here.