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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_164 | LQF level: | Level 6 | ||||||
| Credit Points: | 3.00 | ECTS: | 4.50 | ||||||
| Branch of Science: | Economics; Finances and Loan | Target 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, szf rsu[pnkts]lv | ||||||||
| Study Course Planning | |||||||||
| Full-Time - Semester No.1 | |||||||||
| Lectures (count) | 8 | Lecture Length (academic hours) | 2 | Total Contact Hours of Lectures | 16 | ||||
| Classes (count) | 6 | Class Length (academic hours) | 2 | Total Contact Hours of Classes | 12 | ||||
| Total Contact Hours | 28 | ||||||||
| Part-Time - Semester No.1 | |||||||||
| Lectures (count) | 7 | Lecture Length (academic hours) | 2 | Total Contact Hours of Lectures | 14 | ||||
| Classes (count) | 6 | Class Length (academic hours) | 2 | Total Contact Hours of Classes | 12 | ||||
| Total Contact Hours | 26 | ||||||||
| 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. | Topic | Type of Implementation | Number | Venue | |||||
| 1 | Introduction. Business functioning environment and basic principles of operation. Budget planning. The value of money over time. Current value, future value. | Lectures | 1.00 | auditorium | |||||
| 2 | NPV, IRR. Cash flow, methods for evaluation thereof. Annuity. | Lectures | 1.00 | auditorium | |||||
| 3 | Changes in the value of money over time. Evaluation of cash flow with variable elements. Annuity evaluation. Tasks. | Classes | 1.00 | auditorium | |||||
| 4 | Net present value. Internal rate of return – creation of tables in Excel, formulas (NPV, IRR), creation of discounted cash flow charts. | Classes | 1.00 | auditorium | |||||
| 5 | Analysis of financial statements. Sources of company financing. Company capital, its structure. Asset financing. Fixed assets. Current assets. | Lectures | 1.00 | auditorium | |||||
| 6 | Profit and loss statement. Company profit and profitability. Cash flow, evaluation thereof. | Lectures | 1.00 | auditorium | |||||
| 7 | Company reports, their planning calculations. Data processing in Excel software, calculation of report positions, forecasting. | Classes | 1.00 | auditorium | |||||
| 8 | Company financial analysis. Groups of financial indicators. Profitability and activity indicators. | Lectures | 1.00 | auditorium | |||||
| 9 | Assessment of the financial position of a company. Liquidity, capital and investor indicators. DuPont analysis. WACC rate. | Lectures | 1.00 | auditorium | |||||
| 10 | Company 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. | Classes | 1.00 | auditorium | |||||
| 11 | Budgeting. Discounted cash flow for investment projects. | Lectures | 1.00 | auditorium | |||||
| 12 | Evaluation of project alternatives. | Lectures | 1.00 | auditorium | |||||
| 13 | WACC 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. | Classes | 1.00 | auditorium | |||||
| 14 | Project task result presentations in groups. | Classes | 1.00 | auditorium | |||||
| Topic Layout (Part-Time) | |||||||||
| No. | Topic | Type of Implementation | Number | Venue | |||||
| 1 | Introduction. Business functioning environment and basic principles of operation. Budget planning. The value of money over time. Current value, future value. | Lectures | 1.00 | auditorium | |||||
| 2 | NPV, IRR. Cash flow, methods for evaluation thereof. Annuity. | Lectures | 1.00 | auditorium | |||||
| 3 | Changes in the value of money over time. Evaluation of cash flow with variable elements. Annuity evaluation. Tasks. | Classes | 1.00 | auditorium | |||||
| 4 | Net present value. Internal rate of return – creation of tables in Excel, formulas (NPV, IRR), creation of discounted cash flow charts. | Classes | 1.00 | auditorium | |||||
| 5 | Analysis of financial statements. Sources of company financing. Company capital, its structure. Asset financing. Fixed assets. Current assets. | Lectures | 1.00 | auditorium | |||||
| 6 | Profit and loss statement. Company profit and profitability. Cash flow, evaluation thereof. | Lectures | 1.00 | auditorium | |||||
| 7 | Company reports, their planning calculations. Data processing in Excel software, calculation of report positions, forecasting. | Classes | 1.00 | auditorium | |||||
| 8 | Company financial analysis. Groups of financial indicators. Profitability and activity indicators. | Lectures | 1.00 | auditorium | |||||
| 9 | Assessment of the financial position of a company. Liquidity, capital and investor indicators. DuPont analysis. WACC rate. | Lectures | 1.00 | auditorium | |||||
| 10 | Company 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. | Classes | 1.00 | auditorium | |||||
| 12 | Evaluation of project alternatives. | Lectures | 1.00 | auditorium | |||||
| 13 | WACC 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. | Classes | 1.00 | auditorium | |||||
| 14 | Project task result presentations in groups. | Classes | 1.00 | auditorium | |||||
| 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 | |||||||||
| 1 | Brealey A. B., Myers S. C., Allen F. Principles of Corporate Finance. 13th Ed., 2020, 918 p. | ||||||||
| 2 | Brealey R. A., Myers S. C., Marcus A. J. Fundamentals of Corporate Finance. 10th Ed. 2020, 728 p. | ||||||||
| 3 | Ross S. A., Westerfield R. W., Jordan B. D. Essentials of Corporate Finance. 10th Ed., 2020, 652 p. | ||||||||
| Additional Reading | |||||||||
| 1 | J. B. Berk, P. DeMarzo, J. Harford. Fundamentals of Corporate Finance. 3rd Ed., Pearson Education, 2015, 756 p. | ||||||||
| 2 | R. A. Brealey, S. Myers, A. J. Marcus. Fundamentals of Corporate Finance. 10th Ed., McGraw Hill, 2019, 728 p. | ||||||||
| 3 | Schoenmaker D., Schramade W. Principles of Sustainable Finance, 2019, 394 p. | ||||||||
| Other Information Sources | |||||||||
| 1 | Rīgas biržas mājaslapa. | ||||||||
| 2 | M. Rurāne. Finanšu menedžments. Rīga, RISEBA, 2006 - 384 lp. | ||||||||
| 3 | M. Rurāne. Uzņēmuma finanses. Jumava, 2007, 266 lp. | ||||||||
| 4 | K. Subatnieks. Komercsabiedrības naudas plūsma. Drukātava, 2008, 99 lp. | ||||||||
| 5 | L. J. Gitman. Principles of Managerial Finance. 12th Ed., Pearson International Ed., 2007, 848 p. | ||||||||
