Introduction to Finance and Accounting
Course Description
This course introduces fundamental concepts of using accounting principles and financial tools and analysis for effective managerial decision making. Topics include the role of the financial manager in the organization, concepts and principles underlying financial accounting practices, financial statement analysis, and operational planning and budgeting.
Topics and Objectives
Analyzing Financial Statements
- Explain the use of financial accounting information in making informed and ethical business decisions.
- Identify the audience, purpose, and nature of financial statements.
- Interpret financial statements using comparative analysis.
- Calculate key financial ratios.
- Evaluate financial statement analysis tools.
- Recommend business alternatives using financial statement analysis.
Managerial Accounting
- Describe the various cost descriptors (fixed, variable, direct, indirect, sunk, etc.).
- Apply Cost-Volume-Profit analysis to a business situation.
Working Capital and Short-Term Financing Techniques
- Relate changes in accounts receivable, inventory, and accounts payable policies to the cash conversion cycle.
- Prepare a cash budget.
- Compare and contrast various cash management techniques.
- Compare and contrast the various methods of short-term financing.
Time Value of Money
- Calculate present value and future value for single amounts, annuities, and uneven streams of cash flow.
- List various financial applications of the time value of money.
- Explain the components of a discount/interest rate.
Valuation and Rates of Return
- Explain the concept of yield to maturity.
- Calculate the value of bonds, preferred stocks, and common stocks under alternative scenarios.
- Calculate the required rates of return for bonds, preferred stocks, and common stocks under alternative scenarios.
Capital Structure and Long-Term Financing Strategies
- Compare and contrast the Capital Asset Pricing Model (CAPM) with the
- Discounted Cash Flows Method.
- Evaluate an organization's debt/equity mix and dividend policy.
- Describe the major constituents of the financial market.
- Describe the characteristics and the cost of various debt and equity instruments.
- Evaluate long-term finance alternatives (e.g., stocks, bonds, leases).
