If you do well in this course, you will be able to:
- Understand the role and place of the finance functions in the business organization
- Know the objectives of financial management in the business organization
- Evaluate the financial condition and financial performance of a firm by computing and interpreting key
financial ratios derived from the firm's financial statement
- Understand the tradeoffs between risk and expected return
- Understand the concepts of operating leverage, financial leverage, and combines leverage
- Calculate the degree of operating leverage, financial leverage, and combined leverage
- Know how to study the interrelationships between a firm's sales and costs of various output levels by
using breakeven analaysis techniques
- Know how to project a firm's future financing needs by using the percent of sales method, trend
analysis, linear regression, cash budgets, and proforma financial statement
- Recognize the relationships between types of assets and how they are financed.
- Familiarize him/herself with the concept of optimal capital structure
- Familiarize him/herselfwith principles and techniques of working capital management including cash
management, management of marketable securities, accounts receivable management, inventory
management, and sources of short-term financing
- Familiarize him/herself with capital budgeting techniques
- Understand how to assign a required rate of return to a capital investment
- Know how to evaluate investment proposals by using the payback method, the net present value
method, and the internal rate of return methods
- Know the advantages and limitations of each method
- Know how to make compound interest and present value calculations to solve valuation problems
including bond prices, common stock valuation, future value and present value of single sums,
annuities, and uneven cash flows
- Familiarize him/herself with the sources of intermediate and long-term funds including the primary
and secondary security markets
- Recognize the principal advantages and disadvantages of common stock, financing preferred stock financing, bond financing, and lease financing
- Know how to calculate a firm’s cost of capital by weighing the cost of debt, preferred stock, and common equity
- Know how to use the internet in order to obtain financial information about business firms, specific industries, and securities markets