Kurso programos
FINANCIAL MANGEMENT II (BS at Vilnius University 3'rd year International Business Group)
VILNIUS UNIVERSITY
BUSINESS SCHOOL
FUNDAMENTALS OF CORPORATE FINANCE
Prepared by prof. dr. Arvydas Paškevičius
The aim of the course is to form theoretical and practical finance management skills that would enable one to successfully plan, organise, analyse, and assess the financial performance of a company and the projects of its development.
Intended outcomes of the subject: The ability to establish the value of stocks by means of a discounted cash flow method; The ability to calculate the net present value by means of a discounted cash flow method; The ability to calculate the criteria of the payback time, the discounted payback time, the average book return, the internal profit rate, and the profitability index, The ability to establish the income and expenditure of a capital investment project and to present them in the cash flow financial forms; The ability to assess the cost-reducing investments and to calculate the minimum tender price; The ability to analyse capital investment projects by means of the “what-if“ analysis method and to calculate the accounting and financial breakeven.
The purpose of the course is not only to acquaint the students with the fundamental concepts of corporate managerial finance but also to formulate practical skills while solving elementary financial problems. Therefore, the course includes not only theoretical lectures but also practical work and home assignments. The course consists of 48 hours, 5 credits.
ONLINE STUDIES
„World Health Organization has declared the infections COVID-19 caused by SARS-CoV-2 coronavirus a pandemic, therefore the University has decided to preventively halt the study process. . Students and employees should study remotely via on-line measures - lectures and seminars will not be happening in the University's classes.”
Pro-Rector for Community Affairs
Dr. Birutė Švedaitė - Sakalauskė
Dear students.
We will work online through several programs.
First of all, the VMA you already know well. There you will find a self-test and exam that will be taken from home, online. And also a link to this page.
Second, my WEB page. Here you will find all the information about the course organization, lecture schedule and content, lecture slides, exercise assignments, test questions, lectures, assessment requirements and your exam results.
Third, the MS Teams program. This program will be used to read lectures online, organize online exercises and present your case study analyses online.
Instructions for installing the MS Teams program can be found HOW TO ATTEND A VIDEO LECTURE (Instructions in English are given at the end).
After installing Teams, use the link to join FINANCIAL MANGEMENT II TEAM.
The link to the "Making Capital Investment Decisions Preparation to the Test" video is provided in the SCHEDULE table
How do I find the examination center?
VMA
SCHEDULE
Nr. | S.D. | Data | Time | Room | Chapter | Notes |
1 | Thu | 06 February 2020 | 11:00-12:30 | 201a. | Net Present Value and other investment Criteria |
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2 | Thu | 06 February 2020 | 13:00-14:30 | 201a. | Net Present Value and other investment Criteria | Homework: Chapter 9 Questions and Problems # 1-16 |
3 | Thu | 13 February 2020 | 11:00-12:30 | 201a. | Net Present Value and other investment Criteria PRACTICE | . |
4 | Thu | 13 February 2020 | 13:00-14:30 | 201a. | Net Present Value and other investment Criteria PRACTICE | Homework: Chapter 9 Test Questions |
5 | Thu | 20 February 2020 | 11:00-12:30 | 201a. | Guest lecturer | . |
6 | Thu | 20 February 2020 | 13:00-14:30 | 201a. | Net Present Value and other investment Criteria Preparation to the Test | Homework: Preparation for examination. Self-test |
7 | Thu | 27 February 2020 | 11:00-12:30 | EC | Test #1 | Homework: Chapter 10 Questions and Problems # 1-5 |
8 | Thu | 27 February 2020 | 13:00-14:30 | 201a. | Making Capital Investment Decisions | Homework: Chapter 10 Questions and Problems # 1-5 |
9 | Thu | 05 March 2020 | 11:00-12:30 | 201a. | Making Capital Investment Decisions | . |
10 | Thu | 05 March 2020 | 13:00-14:30 | 201a. | Making Capital Investment Decisions PRACTICE | Homework: Chapter 10 Questions and Problems # 6-18. Chapter 10 Test Questions |
11 | Thu | 12 March 2020 | 11:00-12:30 | 201a. | . | |
12 | Thu | 12 March 2020 | 13:00-14:30 | 201a. | Making Capital Investment Decisions PRACTICE |
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13 | Thu | 19 March 2020 |
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| Making Capital Investment Decisions Preparation to the Test
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14 | Thu | 19 March 2020 |
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| Project analysis and evaluation
| Homework: Preparation for examination. Self-test |
15 | Thu | 26 March 2020 | 11:00-12:30 | 201a. | Test #2 |
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16 | Thu | 26 March 2020 | 13:00-14:30 | 201a. | Homework: Chapter 11 Questions and Problems # 1-6 | |
17 | Thu | 02 April 2020 | 11:00-12:30 | EC | Project analysis and evaluation |
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18 | Thu | 02 April 2020 | 13:00-14:30 | 201a. | Homework: Chapter 11 Questions and Problems #7-15. | |
19 | Thu | 09 April 2020 | 13:00-14:30 |
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| Easter holidays |
20 | Thu | 09 April 2020 | 15:00-16:00 |
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21 | Thu | 16 April 2020 | 11:00-12:30 | on line | Project analysis and evaluation Preparation to the Test #3 |
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22 | Thu | 16 April 2020 | 13:00-14:30 | on line | Project analysis and evaluation Preparation to the Test #3 | Homework: Preparation for examination. Self-test |
23 | Thu | 23 April 2020 | 11:00-12:30 | on line | Test #3 | It is mandatory to turn on the MS TEAMS and the video camera during the test
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24 | Thu | 23 April 2020 | 13:00-14:30 | on line | Case study presentations | |
25 | Thu | 30 April 2020 | 11:00-12:30 | on line | Case study presentations |
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26 | Thu | 30 April 2020 | 13:00-14:30 | on line | Case study presentations |
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27 | Thu | 07 May 2020 | 11:00-12:00 | on line | EGZAM | It is mandatory to turn on the MS TEAMS and the video camera during the EGZAM
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28 | Thu |
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29 | Thu |
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SYLLABUS
1. Introduction to Corporate Finance
1.1. Corporate Finance and the Financial Manager
1.2. The Forms of Business Organization
1.3. The Goal of Financial Management
1.4. The Agency Problem and Control of the Corporation
1.5. Financial Markets and the Corporation
2. Financial Statements and Cash Flow
2.1. The Balance Sheet
2.2. The Income Statement
2.3. Cash flow
3. Working with Financial Statements
3.1. Cash Flow and Financial Statements: A Closer Look
3.2. Standardized Financial Statements
3.3. Ratio Analysis
3.4. The Du Pont Identity
3.5. Using Financial Statement information
Lecture Notes Q&P Test Questions
4. Long-term Financial Planning and Growth
4.1. What is Financial Planning?
4.2. Financial Planning Models: A First Look
4.3. The Percentage of Sales Approach
4.4. External Financing and Growth
Lecture Notes Q&P Test Questions
5. The Time Value of Money
5.1. Future Value and Compounding
5.2. Present Value and Discounting
5.3. More on Present and Future Values
Lecture Notes Q&P Test Questions
6. Discounted Cash Flow Valuation
6.1. Present and Future Values of Multiple Cash Flows
6.2. Valuing Level Cash Flows: Annuities and Perpetuities
6.3. Comparing Rates: The Effect of Compounding
6.4. Loan Types and Loan Amortization
Lecture Notes Q&P Test Questions
7. Interest Rates and Bond Valuation
7.1. Bonds and Bond Valuation
7.2. More on Bond Features
7.3. Bond Ratings
7.4. Some Different Types of Bonds
7.5. Bond Markets
7.6. Inflation and Interest Rates
7.7. Determinants of Bond Rates
Lecture Notes Q&P Test Questions
8. Stock Valuation
8.1. Common Stock Valuation
8.2. Some Features of Common and Preferred Stock
8.3. Stock Markets
Lecture Notes Q&P Test Questions
9. Net Present Value and Other Investment Criteria
9.1. Net present value
9.2. The Payback Rule
9.3. The Discounted Payback
9.4. The Average Accounting Return
9.5. The Internal Rate Of Return
9.6. The Profitability Index
Lecture Notes Q&P Test Questions
10. Making Capital Investment Decisions
10.1. Project Cash Flows: A First Look
10.2. Incremental Cash Flows
10.3. Pro Forma Financial Statements and Project Cash Flows
10.4. More on Project Cash Flow
10.5. Alternative Definitions of Operating Cash Flow
10.6. Some Special Cases of Cash Flow Analysis
Lecture Notes Q&P Test Questions
11. Project analysis and evaluation
11.1. Evaluating NPV Estimates
11.2. Scenario and Other What-If Analyses
11.3. Break-Even Analysis
11.4. Operating Cash Flow, Sales Volume, and Break-Even
11.5. Operating Leverage
11.6. Capital Rationing
Lecture Notes Q&P Test Questions
CASE ANALYSIS AND PRESENTATION
Student’s registration of case studies
Send requests and presentations: arvydas@paskevicius.com
The example of presentation: Health Development Corporation Presentation Excel
Slide presentations limited to a duration of 10-15 minutes. (desirable in the University form of presentations). Presentations file name must be shortened name of the case. Calculation tables, as additional material illustrating the decision is contained in the Excel form. The presentation you have to send no later than 24 hours before the presentation. The first slide specify: the theme and the author (s) surname (s).
Case studies do not have a straight answer. Different people shall bring a unified solution, so the analysis of the case must present YOUR decision and justify it argumentative. The analysis of the test should be kept in mind that the latest information about the problem and the company can be find on the internet.
Assessment of case analysis and presentation:
1. Presentations submission timeliness, slide quality, oratorical art, audience involvement in the case study 0-3.
2. The complexity of the analysed problem 0-3
3. Case studies breadth, i.e. quite a lot of work done 0-4
4. Depth of the case analysis, i.e. use sophisticated analytical techniques 0-4
5. It was collected an additional, interesting and valuable material on the Internet. For example how the company is now doing, what the consequences, modern innovations. 0-2
6. A summary of the findings, what is memorable, the most valuable of the case presented, where you can apply the acquired knowledge 0-2
7. Working as opponent of the peer presentations or active participation in the cases analysis 0-1. Good questions or comments prized pluses, 3-4 pluses equal to 1 point.
1. Lockheed Tri Star and Capital Budgeting. Pages 367-369.
2. Merck & Company: Evaluating a Drug Licensing Opportunity. Pages 371-376.
3. Tree Values. Pages 377-379.
4. The Super Project. Pages 381-394.
5. NetFlix.com, Inc. Pages 395-403.
6. A-Rod: Signing the Best Player in Baseball. Pages 405-418.
7. Ocean Carriers. Pages 419-423.
8. Whirpool Europe. Pages 425-430.
9. Health Development Coporation. Pages 431-434.
10. The Investment Detective (Investment criteria and discounted cash flow) Page 257
11. Worldwide Paper Company (Analysis of an expansion investment) Page 259
12. Target Corporation (Multifaceted capital investment decisions) Page 263
13. Aurora Textile Company (Analysis of an automation investment) Page 283
14. Compass Records (Analysis of working capital investment) Page 295
15. Victoria Chemicals plc (A): The Merseyside Project (Relevant cash flows) Page 309
16. Victoria Chemicals plc (B): Merseyside and Rotterdam Projects (Mutually exclusive investment opportunities) Page 317
17. Euroland Foods S.A. (Strategic resource allocation) Page 325
18. Star River Electronics Ltd.(Capital project analysis and forecasting) Page 337
LITERATURE
1. Fundamentals of Corporate Finance, Ross, S. A. 2016.
2. Principles of Corporate Finance, Brealey, Myers, 2016.
3. Financial Management, Ray M. Brooks. 2010.
4. Capital Markets, Fabozzi Modigliani. 2010 .
Textbook materials (access can be granted individually) Ch1 Ch2 Ch3 Ch4 Ch5 Ch6 Ch7 Ch8 Ch9 Ch10 Ch11
EVALUATION
Assessment requirements:
Analysis and solutions of tasks and problems at seminars, attendance of lectures and practical classes, interim tests, examination.
Final assessment criteria:
The grade assigned for problem solution at seminars is multiplied by 10%.
The grade assigned for case study task solution is multiplied by 30%.
Colloquium tests shall be taken by electronic means at the Examination center. Students are required to solve not less than 50% of all tasks presented in 3 tests. Where the grade for the colloquium is above 5, it is multiplied by 20% and shall be added to the final result. It is necessary to pass all 3 tests.
Composition of the final accumulative grade:
The final accumulative grade shall be composed of:
Problem solutions at seminars and lectures – 10 %
Case study task solution – 30%
Grade from colloquium 1 – 20%
Grade from colloquium 2 – 20%
Grade from colloquium 3 – 20%
TEST RESULTS
Grįžti