TEACHING PLAN FOR CORPORATE FINANCE. 1. Basic description

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1 TEACHING PLAN FOR CORPORATE FINANCE 1. Basic descriptin Name f the curse: Crprate Finance Academic year: Term: 2nd Degree / Curse: Internatinal Business Prgram Cde: Number f credits: 6 Ttal number f hurs cmmitted: 150 Teaching language: English Lecturer: Jaume Bnet Timetable: Tuesdays, 09:00 11:30 Thursdays, 09:00 11:30 Office Hurs: Tuesdays, 08:00 09:00 Thursdays, 08:00 09:00 2. Presentatin f the curse In the internatinal sphere, the used accunting principles are cnverging (IFRS, USGAAP, etc.). In this cntext, in rder t take imprtant business decisins, it is imperative t be able t build, read, underst analyze the financial statements f cmpanies, n matter which cuntry they are frm. One f the gals f the curse is that students master the vcabulary f financial statements accunting reprts, use it t cmmunicate with internal external interlcutrs. It als fcuses n hw t measure crprate investments t cnsider the different finance resurces that are currently available. The curse cvers different areas: After intrducing the basic cncepts f Financial Accunting, yu will perfrm the analysis interpretatin f the financial statements, using different methds, in rder t assess the trend f a cmpany. Anther imprtant issue is t be able t calculate present future value f mney underst all the cmpnents f interest rates. These cncepts will be essential t calculate rates f return evaluate all the decisins in capital budgeting.

2 Participants will be able t manage the crprate wrking capital frecast financial statements. Frm this infrmatin, they culd estimate future cash flws perfrm a cmpany valuatin. 3. Cmpetences t be achieved in the curse General cmpetences Instrumental cmpetences G.I.2. Ability t relate cncepts knwledge frm different areas. G.I.4. Ability t tackle slve prblems. G.I.5. Ability t take decisins in cmplex changing envirnments. G.I.8. Oral written cmpetence in cmmunicating in English. General persnal cmpetences G.P.1. Ability t adapt, lead wrk in a grup that is multicultural, interdisciplinary, cmpetitive, changing cmplex in nature. G.P.3. Mral cmmitment ethical sense. Generic systemic cmpetences G.S.3. Ability t think glbally. G.S.4. Entrepreneurial capability. G.S.5. Ability t learn n ne s wn. Specific cmpetences Disciplinary cmpetences E.D.10. Intrduce basic financial cncepts analytical techniques intrduce their tin t internatinal transactins. Prfessinal cmpetences E.P.1. Ability t underst the decisins taken by ecnmic agents their interactin in the markets. E.P.2. Ability t analyse ecnmic market indicatrs when taking decisins within the rganisatin. E.P.9. Assess discuss the ecnmic financial psitin f an rganisatin. E.P.17. Ability t express underst spken written cmmunicatin in English at an advanced level in the internatinal business envirnment. E.P.24. Develp the ability t synthesise. Cmpetences fr bility G.A.1. Ability t apply acquired knwledge skills. G.A.2. Ability t use quantitative criteria qualitative insights when taking decisins. G.A.3. Ability t search explit new infrmatin surces. Own cmpetences f the subject Ability t underst analyze Crprate Financial Statements in rder t evaluate the financial ecnmic situatin f a cmpany. Ability t frecast financial statements f a cmpany. Ability t perfrm a cmpany valuatin.

3 4. Cntents PART 1: BASICS IN FINANCIAL ACCOUNTING 1.1. Accunting equatin accunting cycle 1.2. Cmprehensive chart f accunts 1.3. Main Financial Statements Balance Sheet Incme Statement Statement f Owner s Equity Cash Flw Statement 1.4. Main differences between IFRS U.S. GAAP PART 2: CASH FLOW MANAGEMENT 2.1. Ecnmic Cash Flw vs. Financial Cash Flw 2.2. Calculatin methds t Financial Cash Flw: Direct Indirect 2.3. Free Cash Flw 2.4. The high prfit/n cash paradx PART 3: FINANCIAL STATEMENTS ANALYSIS 3.1. Hrizntal Analysis 3.2. Vertical Analysis 3.3. Rati Analysis Liquidity Asset Management Debt Management Prfitability: ROA, ROI ROE DuPnt Analysis PART 4: COST ACCOUNTING 4.1. Direct Indirect Csts 4.2. Variable Fixed Csts 4.3. Csts Allcatin 4.4. Break-even Pint PART 5: TIME VALUE OF MONEY 5.1. Future Values Present Values 5.2. Slump Sum 5.3. Annuities 5.4. Perpetuities 5.5. Uneven Cash Flws PART 6: INTEREST RATES 6.1. The Cst f mney 6.2. Determinants f Market Interest 6.3. The Term Structure f Interest Rates

4 PART 7: RISKS AND RATES OF RETURN 7.1. Risk-Return Trade-Off 7.2. St-Alne Risk 7.3. Risk in a Prtfli Cntext (CAPM) 7.4. Relatinship between Risk Rates f Return PART 8: COST OF CAPITAL 8.1. Weighted Average Cst f Capital (WACC) 8.2. Basic Definitins 8.3. Factrs that Affect the WACC PART 9: BASICS OF CAPITAL BUDGETING 9.1. Net Present Value 9.2. Internal Rate f Return 9.3. Mdified Internal Rate f Return 9.4. Payback Perid PART 10: CASH FLOW ESTIMATION AND RISK ANALYSIS Cnceptual Issues in Cash Flw Estimatin Analysis f an Expansin Prject Replacement Analysis PART 11: WORKING CAPITAL MANAGEMENT Current Assets Investing Financing Plicies Cash Cnversin Cycle Cash Budget Inventries accunts Receivable Accunts Payable Bank Lans Accruals PART 12: FINANCIAL PLANNING AND FORECASTING Sales Frecast Frecasted Financial Statements Analyzing the Effect f Changing Ratis Cmpany Valuatin Methds DCF Multiples Venture Capitalist

5 5. Assessment The final grade will be determined by the weighted average f the fllwing activities carried ut thrughut the term: Assessment elements In-class quizzes, assigned exercises cases Class participatin Time perid During the term Type f Assessment agent assessment Cmp Opt Lecturer Selfassess Cassess Onging X Type f activity Cncep X tual tin X X Analysi s, tin synthe sis Gruping Weight (%) Indiv Grup (#) X 15% X 10% Midterm exam Week 5 X X Cncep tual, tin, verall underst ing X 25% Grup case Week 10 X X Applica tin X 10% Final exam (a minimum grade f 4 is required t pass the curse) Exam Week X X Cncep tual, tin, verall underst ing X 40% Taking the final exam is a necessary cnditin t receive a quantitative evaluatin f the curse. In case f nn-attendance t the final exam, the student will receive an N.A. grade. Class participatin will be evaluated as 10%, cntributing up t 1 pint (ut f 10) t the final grade. Only thse students wh fulfil the fllwing criteria can btain partial r full credit in this categry f the assessment:. demnstrate preparatin: relate things t bk chapters, readings cases. cntribute in an active significant way t nging class discussins

6 Supplementary Evaluatin Fr thse students wh during the regular term evaluatin have btained a weighted final grade belw 5.0, but have btained a cntinuus evaluatin abve 4.0 (In-class Quizzes assigned exercises, Grup Case class participatin), there will be a supplementary evaluatin accrding t ESCI-UPF calendar academic regulatins. This supplementary evaluatin will imply a re-take f the final exam that will accunt fr 40% f the ttal grade. The ttal final grade will keep the btained grades in the rest f cntinuus evaluatin elements. 6. Bibligraphy teaching resurces Basic bibligraphy BRIGHAM, HOUSTON. Fundamentals f Financial Management. Cncise Editin. Cengage Learning (8th editin) WARREN, REEVE & DUCHAC. Managerial Accunting. Cengage Learning (12th Editin) Supplementary bibligraphy JONES, MOWEN, HANSEN, RICH. Financial Accunting: The Crnerstne f Business Decisins. Cengage Learning (2nd editin) POWERS & NEEDLES. Internatinal Financial Reprting Stards. An intrductin. Suth-Western, Cengage Learning (3rd editin) DRURY. Management Cst Accunting. Cengage Learning (8th editin) BREALEY & MYERS. Principles f Crprate Finance. Mc Graw-Hill Educatin (11 th editin) Methdlgy The teaching learning prcesses will be based n lecturer s slides, readings f the recmmended bks practical cases. It is matry t have read each case befre the class in rder t be able t slve it during the sessin.

7 8. Scheduling activities Week Sessin In class Class preparatin Week 1 Lecture 1 Lecture 2 Basic accunting cncepts, Financial Statements Financial Statement Analysis Brigham, chapter 3 Brigham, chapter 4 Week 2 Lecture 3 Lecture 4 Case studies exercises Cst Accunting Warren, chapter 3 4 Drury, chapter 2, 3 8 Week 3 Lecture 5 Lecture 6 Case studies exercises Time Value f Mney Brigham, chapter 5 Week 4 Lecture 7 Interest Rates Brigham, chapter 6 Lecture 8 Case studies exercises Week 5 Lecture 9 Risks Rates f Return Brigham, chapter 8 Lecture 10 Midterm exam Week 6 Lecture 11 Cst f Capital Brigham, chapter 10 Lecture 12 Case studies exercises Week 7 Lecture 13 Basics f Capital Budgeting Brigham, chapter 11 Lecture 14 Case studies exercises Week 8 Lecture 15 Lecture 16 Cash Flw estimatin risk analysis Wrking Capital Management Brigham, chapter 12 Brigham, chapter 15 Week 9 Lecture 17 Financial planning frecasting Brigham, chapter 16 Lecture 18 Case studies exercises Week 10 Lecture 19 Lecture 20 Cmpany Valuatin Methds Case studies exercises Final exams week Final exam