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Corporate Finance (Part I) (online)
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Course Outline

Week 1
      Long-Term Financial Planning and Growth
      Short-Term Finance and Planning
      Cash and Liquidity Management
      Credit and Inventory Management

Week 2
      Introduction to Valuation: The Time Value of Money
      Discounted Cash Flow Valuation
      Interest Rates and Bond Valuation
      Stock Valuation
      Midterm exam

Week 5
      Return, Risk, and the Security Market Line
      Final Exam

Detailed Curriculum

FOCUS I. Financial Statements and Long-Term Financial Planning

Week 1:

Long-Term Financial Planning and Growth
Often firms that grow at a phenomenal pace run into cash flow problems and, subsequently, financial difficulties. In other words, it is literally possible to "grow broke." This chapter emphasizes the importance of planning for the future and discusses tools firms use to think about, and manage growth.

FOCUS II. Short-Term Financial Planning and Management

Short-Term Finance and Planning
To this point, we have described the decisions of long-term finance, including capital budgeting, capital structure, and dividend policy. This chapter introduces some aspects of short-term finance. Short-term finance is the analysis of decisions made when the relevant cash flows all occur in the near future. The focus of short-term finance is on current assets and current liabilities.

Cash and Liquidity Management
Why do firms hold any cash? This is the question Chapter 20 attempts to answer, and it discusses some very good reasons for firms to do so. This chapter shows how firms can keep investments in cash low while still operating effectively.

Credit and Inventory Management
This chapter looks at a firm's decision to grant credit. Granting credit can result in increased sales for the firm, but this benefit must be balanced against the extra costs of a credit sale. The chapter also discusses some important financial aspects of inventory management.

FOCUS III. Valuation of Future Cash Flows

Week 2:

Introduction to Valuation: The Time Value of Money
One of the most important questions in finance is: What is the value today of a cash flow to be received at a later date? The answer depends on the time value of money, the subject of this chapter.

Discounted Cash Flow Valuation
This chapter expands on the basic results from Chapter 5 to discuss valuation of multiple future cash flows.We consider a number of related topics, including loan valuation, calculation of loan payments, and determination of rates of return.

Interest Rates and Bond Valuation
Bonds are a very important type of financial instrument. This chapter shows how the valuation techniques of Chapter 6 can be used to determine bond prices.We describe essential features of bonds and how their prices are reported in the financial press. Interest rates and their influence on bond prices are also examined.

Week 3:

Stock Valuation
The final chapter of Part Three considers the determinants of the value of a share of stock. Important features of common and preferred stock, such as shareholder rights, are discussed, and stock price quotes are examined.

FOCUS IV. Risk and Return

Return, Risk, and the Security Market Line
In this chapter, we will define risk and discuss how to measure it. Then we will quantify the relationship between an asset's risk and its required return, the distinction between the two types of risk: systematic and unsystematic. We then develop the principle of diversification, which shows that highly diversified portfolios will tend to have almost no unsystematic risk.

LEARNING SOLUTIONS