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Fundamentals of Finance

Study Course Description

Course Description Statuss:Approved
Course Description Version:9.00
Study Course Accepted:05.03.2024 11:39:11
Study Course Information
Course Code:SBUEK_164LQF level:Level 6
Credit Points:3.00ECTS:4.50
Branch of Science:Economics; Finances and LoanTarget Audience:Marketing and Advertising
Study Course Supervisor
Course Supervisor:Anželika Berķe-Berga
Study Course Implementer
Structural Unit:Faculty of Social Sciences
The Head of Structural Unit:
Contacts:Dzirciema street 16, Rīga, szfatrsu[pnkts]lv
Study Course Planning
Full-Time - Semester No.1
Lectures (count)8Lecture Length (academic hours)2Total Contact Hours of Lectures16
Classes (count)6Class Length (academic hours)2Total Contact Hours of Classes12
Total Contact Hours28
Part-Time - Semester No.1
Lectures (count)7Lecture Length (academic hours)2Total Contact Hours of Lectures14
Classes (count)6Class Length (academic hours)2Total Contact Hours of Classes12
Total Contact Hours26
Study course description
Preliminary Knowledge:
Microeconomics, Macroeconomics, Basics of Accounting, Mathematics, English.
Objective:
To develop students’ understanding of corporate finance, to provide insight into financial analysis within a company, cash flow assessment, financial reporting as well as financial planning.
Topic Layout (Full-Time)
No.TopicType of ImplementationNumberVenue
1Introduction. Business functioning environment and basic principles of operation. Budget planning. The value of money over time. Current value, future value.Lectures1.00auditorium
2NPV, IRR. Cash flow, methods for evaluation thereof. Annuity.Lectures1.00auditorium
3Changes in the value of money over time. Evaluation of cash flow with variable elements. Annuity evaluation. Tasks.Classes1.00auditorium
4Net present value. Internal rate of return – creation of tables in Excel, formulas (NPV, IRR), creation of discounted cash flow charts.Classes1.00auditorium
5Analysis of financial statements. Sources of company financing. Company capital, its structure. Asset financing. Fixed assets. Current assets.Lectures1.00auditorium
6Profit and loss statement. Company profit and profitability. Cash flow, evaluation thereof.Lectures1.00auditorium
7Company reports, their planning calculations. Data processing in Excel software, calculation of report positions, forecasting.Classes1.00auditorium
8Company financial analysis. Groups of financial indicators. Profitability and activity indicators.Lectures1.00auditorium
9Assessment of the financial position of a company. Liquidity, capital and investor indicators. DuPont analysis. WACC rate.Lectures1.00auditorium
10Company financial analysis. Groups of financial indicators. Profitability and activity indicators. Horizontal and vertical analysis of reports. Creation of formulas using Excel; calculation of the proportions of horizontal and vertical analysis.Classes1.00auditorium
11Budgeting. Discounted cash flow for investment projects.Lectures1.00auditorium
12Evaluation of project alternatives.Lectures1.00auditorium
13WACC rate. Budgeting. Discounted cash flow for investment projects. Cash flow planning – creation of tables and formulas using Excel; cash flow compilation, discounting, NPV value calculation. Projekta alternatīvu novērtēšana.Classes1.00auditorium
14Project task result presentations in groups.Classes1.00auditorium
Topic Layout (Part-Time)
No.TopicType of ImplementationNumberVenue
1Introduction. Business functioning environment and basic principles of operation. Budget planning. The value of money over time. Current value, future value.Lectures1.00auditorium
2NPV, IRR. Cash flow, methods for evaluation thereof. Annuity.Lectures1.00auditorium
3Changes in the value of money over time. Evaluation of cash flow with variable elements. Annuity evaluation. Tasks.Classes1.00auditorium
4Net present value. Internal rate of return – creation of tables in Excel, formulas (NPV, IRR), creation of discounted cash flow charts.Classes1.00auditorium
5Analysis of financial statements. Sources of company financing. Company capital, its structure. Asset financing. Fixed assets. Current assets.Lectures1.00auditorium
6Profit and loss statement. Company profit and profitability. Cash flow, evaluation thereof.Lectures1.00auditorium
7Company reports, their planning calculations. Data processing in Excel software, calculation of report positions, forecasting.Classes1.00auditorium
8Company financial analysis. Groups of financial indicators. Profitability and activity indicators.Lectures1.00auditorium
9Assessment of the financial position of a company. Liquidity, capital and investor indicators. DuPont analysis. WACC rate.Lectures1.00auditorium
10Company financial analysis. Groups of financial indicators. Profitability and activity indicators. Horizontal and vertical analysis of reports. Creation of formulas using Excel; calculation of the proportions of horizontal and vertical analysis.Classes1.00auditorium
12Evaluation of project alternatives.Lectures1.00auditorium
13WACC rate. Budgeting. Discounted cash flow for investment projects. Cash flow planning – creation of tables and formulas using Excel; cash flow compilation, discounting, NPV value calculation. Projekta alternatīvu novērtēšana.Classes1.00auditorium
14Project task result presentations in groups.Classes1.00auditorium
Assessment
Unaided Work:
During the course, students must become acquainted with the nature of company finances, indicators, budgeting, discounting, basic conditions for compiling cash flow.
Assessment Criteria:
Assessment of learning outcomes will be done through individual calculations, group work, developing a project based on practical financial analysis, presenting and commenting on the project and group work results. At the end of the course, students write an examination paper. 1. Participation in lectures – 10% 2. Participation and quality of work in seminars – 15% 3. Homeworks and literature tests – 20% 4. Independent work (a project) – 20% 5. Examination grade – 35%
Final Examination (Full-Time):Exam (Written)
Final Examination (Part-Time):Exam (Written)
Learning Outcomes
Knowledge:Students will be able to apply the knowledge gained during the course in planning their personal and company budgets, working in private business as well as in the public sector.
Skills:Upon successful completion of the course, students will be able to comprehend financial statement data as well as make the necessary calculations to assess the financial position of the company. They will be able to perform simple cash flow forecasting and discounting using Excel.
Competencies:Students will be able to explain the company’s profitability, liquidity, activity, capital and efficiency indicators, calculate cash flow values, perform calculations related to interest rate calculations, as well as analyse the company’s financial statements. Students will be able to evaluate investment projects.
Bibliography
No.Reference
Required Reading
1Brealey A. B., Myers S. C., Allen F. Principles of Corporate Finance. 13th Ed., 2020, 918 p.
2Brealey R. A., Myers S. C., Marcus A. J. Fundamentals of Corporate Finance. 10th Ed. 2020, 728 p.
3Ross S. A., Westerfield R. W., Jordan B. D. Essentials of Corporate Finance. 10th Ed., 2020, 652 p.
Additional Reading
1J. B. Berk, P. DeMarzo, J. Harford. Fundamentals of Corporate Finance. 3rd Ed., Pearson Education, 2015, 756 p.
2R. A. Brealey, S. Myers, A. J. Marcus. Fundamentals of Corporate Finance. 10th Ed., McGraw Hill, 2019, 728 p.
3Schoenmaker D., Schramade W. Principles of Sustainable Finance, 2019, 394 p.
Other Information Sources
1Rīgas biržas mājaslapa.
2M. Rurāne. Finanšu menedžments. Rīga, RISEBA, 2006 - 384 lp.
3M. Rurāne. Uzņēmuma finanses. Jumava, 2007, 266 lp.
4K. Subatnieks. Komercsabiedrības naudas plūsma. Drukātava, 2008, 99 lp.
5L. J. Gitman. Principles of Managerial Finance. 12th Ed., Pearson International Ed., 2007, 848 p.