Financial Concepts and Tools for Managers

Transcription

1 Financial Concepts and Tools for Managers Course Description Finance involves obtaining, using, and managing funds to achieve the company s financial objectives (e.g., maximization of shareholder value). The course is a primer that emphasizes and develops an understanding of financial concepts, tools, strategies, and major decision areas related to the financial management of the business. Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided. Course Level: Overview. This program is appropriate for professionals at all organizational levels. CPE Credits: 7 (CPA) Category: Finance Prerequisite: None Advanced Preparation: None Course Learning Objectives Module 1: The Basics 1. Manage funds to maximize shareholder value. 2. Define the concepts of finance. 3. List and discuss basic forms of business organizations. 4. Describe the role of the various financial institutions and markets. 5. Demonstrate and calculate the depreciation methods. 6. Outline the basic concepts associated with federal corporate taxation. Module 2: Financial Statement Ratios

2 1. List and define basic financial statements. 2. Explain the stockholders equity section of the balance sheet. 3. Identify and discuss the statement of cash flows. 4. Differentiate between horizontal and vertical analysis. 5. Calculate liquidity ratios. 6. Describe and calculate activity ratios. 7. Explain and give examples of solvency and debt service ratios. 8. Recognize and enumerate examples of profitability ratios. 9. Explain the Du Pont system. 10. Classify and interpret market value ratios. 11. Elaborate and clarify the limitations of ratio analysis. Module 3: Budgeting and Forecasting Financial Needs 1. Define the basic concepts of budgeting. 2. Explain the concepts of financial forecasting. 3. Outline the computational steps involved in the percent-of-sales method. 4. Demonstrate the format associated with cash budgeting. Module 4: Managing Working Capital 1. Explain the concept of working capital management. 2. Describe the benefits of cash management. 3. Demonstrate the uses of various cash management models. 4. Define and give examples of marketable securities. 5. Manage accounts receivable. 6. Implement an inventory management system. Module 5: Security, Bond, and Asset Valuation 1. Explain and list various types of risk. 2. Interpret the concept of portfolio theory. 3. Give examples of market index models. 4. Illustrate and discuss the Capital Asset Pricing Model (CAPM). 5. Explain beta s role in assessing a security risk. 6. Discuss and define return. 7. Explain the concept of the risk-return trade-off.

3 8. Describe how to value a bond. 9. Calculate bond yield and the effective rate of return on a bond. 10. Explain the concept of term structure of interest rates. 11. Describe common stock valuation. Module 6: Time Value of Money and Capital Budgeting 1. Describe the concept of time value of the money. 2. Apply the time value concept to financial decision situations. 3. Discuss what capital budgeting is. 4. List and define each of the various evaluation methods. 5. Define mutually exclusive investments. 6. Evaluate a lease versus purchase decision. 7. Allocate a limited budget to capital investment projects. 8. Explain the role of inflation in an investment decision. 9. Discuss how to incorporate risk in capital investment decisions. Module 7: Determining Cost of Capital and Capital Structure Decisions 1. Determine the cost of capital. 2. Compute and explain the cost of equity capital. 3. Explain the level of financing and the marginal cost of capital (MCC). 4. Calculate and discuss break-even analysis. 5. Compute and explain the cash break-even point. 6. Discuss and give examples of leverage. 7. Detail the use of operating leverage. 8. Articulate the concept of financial leverage. 9. Discuss the theory of capital structure. 10. Implement the EBIT-EPS approach to capital structure. Module 8: Dividends and Stock Splits 1. Distinguish between cash dividends and stock dividends. 2. Define stock splits. 3. Discuss various dividend policies.

4 Module 9: Short-Term Financing 1. Enumerate financing strategies. 2. Use trade credit. 3. Identify the types of short-term bank loans. 4. List other sources of financing. 5. Describe the process of accounts receivable financing. 6. Explain how to obtain inventory financing. Module 10: Term Loans and Leasing 1. Characterize the limitations of intermediate-term bank loans. 2. Explain the function and responsibility of Small Business Administration. 3. List the pros and cons of leasing. Module 11: Long-Term Debt 1. Articulate and give examples of long-term debt financing. 2. Make a bond refunding decision. Module 12: Stock, Convertibles, and Warrants 1. Describe the process of investment banking. 2. Differentiate between public versus private placement of securities. 3. Identify and explain the role and rights of stockholders. 4. List and define the conditions and limitations of preferred stock. 5. Explain the benefits and risks associated with common stock. 6. Clarify and elaborate on stock rights. 7. Identify and give examples of stock repurchases. 8. Describe and implement a process for margin trading. 9. Utilize short selling in a down trend market. 10. List and define governmental regulations. 11. Articulate the concept of an efficient market theory. 12. Define and give examples of convertible securities. 13. Explain the uses of stock warrants.

5 Module 13: Mergers and Acquisitions 1. Differentiate between mergers and acquisitions. 2. Explain the uses and benefits of a holding company. 3. Explain how to implement tender offer. Module 14: Options and Option Pricing, Derivatives and Risk Management, and International Finance 1. Execute and implement a voluntary settlement. 2. State how to file for bankruptcy and reorganization. 3. Discuss how to use derivatives (options and futures) to manage risk. 4. Outline the Black-Scholes option pricing model. 5. Discuss the financial risks associated with doing business globally.