FINC 671 Financial Management

Introduction

Whether you work for a small private company or a large public one, financial management can involve many complex issues. Just about any decision a business makes has a financial aspect to it, from deciding compensation policies, the realm of human resource managers, to pricing products, the marketer's territory.

This subject addresses the major issues to be considered in the financial management of a business.

Aims

FINC 671 is intended to introduce students to the decision-making processes used in corporate financial management. Since it is assumed that this is the student's first exposure to financial concepts, the first part of the subject will define the objective of financial management and then provide the tools needed to conduct financial analysis. This sets the stage for a discussion of the investment, financing and dividend decisions of the firm.

Objectives

By the end of this subject students should be able to understand the scope of corporate financial management and have the tools and a framework in which to analyse the investment, financing and dividend decisions of the firm. Specifically, students should be able to:

• Understand the objective function of corporate finance.
• Understand the concept of time value of money and be able to calculate present and future values.
• Read and interpret the financial statements of a firm and analyse the firm's performance using financial ratios.
• Understand the basic principles of valuation as applied in corporate finance.
• Understand the relationship between risk and return.
• Understand capital budgeting principles and the application of capital budgeting techniques to making investment decisions for the firm, both for long-term investment and investments in working capital.
• Understand the financing decision of the firm and its application to the capital structure of the firm.
• Understand the analysis process of the firm in establishing dividend policy.