FIN12 Introduction to Finance

Module Name
Introduction to Finance
Module Code
Luis Fernando Gutierrez Ferreras
High School Diploma or final certificate, equivalent to the Netherlands HAVO Diploma
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.
  • 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

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)
  • – 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


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