FIN12 Introduction to Finance

Module Name: 
Introduction to Finance
Module Code: 
FIN12
Year: 
1
Phase: 
1
Block: 
3
Teacher : 
Luis Fernando Gutierrez Ferreras
Email address : 
s00127@mail.wittenborg.eu
Prerequisite: 
High School Diploma or final certificate, equivalent to the Netherlands HAVO Diploma
Introduction: 
The course is designed for those who wish to achieve a broad understanding of financial management, but without the in-depth knowledge as asked for students majoring in financial management. The course gives an insight in a modern, Western financial and management accounting process. This course resets on a solid foundation of theory but the main focus throughout is its practical value. It does assume that no previous knowledge of financial management (although a basic understanding of financial statements is required) and is designed in an accessible style – open learning style.
Goals: 
  • Understand the role of financial management in a business and between the business and shareholders
  • Describe and understand the agency problem
  • Understand and analyse projected financial statements and the problems of risk and uncertainty
  • Understand major categories of financial ratios and their limitations
  • Understand the nature and importance of investment decision-making and the nature of risk calculation with appraisal in investments
  • Identify the main sources of business financing and their applications
  • Understand the purpose of working capital and how to manage them
Content: 

Introduction to financial management

  • The role of the finance function
  • The essentials features of financial management
  • The objectives of a business
  • Wealth maximization and ethical behaviour
  • Corporate governance and the agency problem
  • Corporate governance and economic performance

Financial planning and projected financial statements

  • The role of projected financial statements
  • Preparing projected financial statements
  • Projected cash flow statements
  • Projected profit and loss account (income statement)
  • Projected balance sheet
  • Projected financial statements and decision making
  • Projected financial statements and risk
  • Projected financial statements and spreadsheets

Analysing and interpreting financial statements

  • Financial ratios
  • Financial ratios classification
  • Key steps in financial ratio analysis
  • Calculating the ratios
  • Profitability, Efficiency, Liquidity and Gearing
  • Investment ratios
  • Financial ratios and the problem of overtrading
  • Trend analysis and prediction of financial failure

Financing a business – Source of financing

  • Sources of finance
  • Sources of external finance
  • Long-term sources of external finance
  • Ordinary shares
  • Preference shares
  • Loans and debentures
  • Interest rates and interest rate risk
  • Finance leases
  • Securitization
  • Short-term sources of external finance
  • Internal sources of finance
  • Long-tern and short-term sources of internal finance

Financing a business – raising long-term finance

  • The Stock Exchange
  • Share issues
  • Providing long-term finance for smaller business
  • Venture capital
  • Government assistance
  • Alternative Investment Market (AIM)
  • Amzon.com – case study

Managing working capital

  • The nature and purpose of working capital
  • The scale of working capital
  • Managing stocks (inventories )
  • Managing debtors (receivables)
  • Managing cash
  • Managing trade creditors (payables)

Working capital problems of the small business

Instruction / Study Load : 

24  Lesson hours
8  Preparation Lesson hours
20  Assignments / Homework hours
20 Exam and exam preparation hours
68 Literature ( Depending on the length and difficulty of the book ) hours

The course uses 340 pages from the book(s) and journal articles where:

  • 100 pages easy reading and understanding material – 14 hours
  • 190 pages average reading and understanding material – 38 Hours
  • 50 pages difficult reading and understanding material – 16 hours

Criteria:

  • Difficult reading and understanding material – 3 pages per hour
  • Average reading and understanding material – 5 pages per hour
  • Easy reading and understanding  material – 7 pages per hour

Total 140 Hours

IBA Final Qualification Mapping: 
Mapped with numbers 1, 13 and 16 See the EEG for further reference.
Teaching Language: 
English
Teaching Methods: 
  • Classroom lecturing
  • Case study discussions
  • Feedback and presentation sessions
  • Video and film
  • Discussion sessions
  • Research Papers
Module / Lecture and seminar status: 
Compulsory
Testing and assessment: 
Written Examination (1) See the EEG for further reference.
European Credits: 
5
Required literature: 
  • Financial Management for Non-Specialists, 2nd Ed., Peter Atrill, Prentice Hall, ISBN 0-13-022775-7