Corporate Finance

Syllabus

Thematic definition of lectures: 1. Development, characteristics and content of corporate finance. Content, principles and procedures of corporate financial management. Basic categories used in financial management. Financial policy of the enterprise and financial objectives of the business activity. Financial decision-making of the enterprise. 2. Financing of the enterprise, its property, financial and capital structure. Necessary amount of capital of the enterprise. Capital structure. Structure of financial resources of the enterprise. Optimal financial structure of the enterprise. 3. Acquisition of equity capital from external sources. Deposits of owners. Venture (risk) capital entry. Raising equity capital in venture capital companies. Shares and their types, ordinary, preference and employee shares. Technique of share issue. 4. Raising equity capital from internal sources. Financing corporate needs from profits. Method of quantifying profit. Distribution of profits: taxes, dividends, formation of reserve funds. Self-financing of the enterprise. Pension funds. Financing of corporate needs from depreciation. Depreciation as a source of financing. Depreciation policy of the state and enterprises. Other internal sources of financing. 5. Acquisition of long-term and medium-term capital by means of credit. Issuance of corporate bonds, their types, coverage, yield and repayment. Financial credits: term loans, mortgage loans, revolving loans, export credits. Supplier loans. Special forms of credit: leasing, forfaiting, franchising. 6. Obtaining financial resources from short-term loans. Trade credit. Promissory note as an instrument of trade credit. Fixed and non-fixed liabilities, advances, issue of commercial paper, short-term bank loans. Factoring as a form of short-term financing. 7. Financial support of enterprises from public sources. Reasons and factors for targeting financial support. Direct and indirect forms of support. Financial support of enterprises in the Slovak Republic, entities and programmes. Forms and objectives of the European Union subsidy policy. 8. Placement (allocation) of capital in fixed tangible and intangible assets. Characteristics of financial aspects of investment. Methods of selecting a suitable variant of an investment project. The impact of inflation on investment decision-making. Selection of an investment project in the capital budget. Financing of major investment projects. 9. Financial investment of an enterprise. Investing capital in financial assets. The role and instruments of the financial market. Criteria for financial investment. Portfolio of securities. Strategic objectives of corporate financial investment. 10. Financing of current assets of the enterprise, their characteristics and structure. Management of inventories, receivables and prompt cash. Cash cycle. 11. Factors influencing the exchange rate in the long and short term. Management of the enterprise's currency risks. 12. Determination of enterprise value. Motives for determining the value of an enterprise. Basic information inputs and factors. Methods of enterprise value determination. Valuation of business assets in special conditions. 13. Financial analysis and planning of the enterprise. The importance and roles of financial analysis in the management of corporate finance. Retrospective financial analysis. New criteria for assessing business performance - economic value added (EVA) and market value added (MVA). Predictive financial analysis. Definition of the nature and tasks of a financial plan. Structure, content and process of financial plan development. Characteristics of the different parts of the financial plan. Methods and models for the development of a company's financial plan. Control of implementation, adjustments and changes to the plan... Thematic definition of exercises: 1. Cash flow - cash flow of the enterprise. Calculation of cash flow by direct and indirect methods. Analysis of financial ratios - specifically liquidity ratios. 2. Time value of money - future value of money (interest earner, saver, funder), present value of money (de-interest earner, funder, redeemer). The impact of inflation and taxation of interest income on the time value of money. 3. Financial and capital structure of the enterprise - costs related to the commitment of the individual components of capital, cost of equity capital, cost of foreign capital, calculation of the average nominal and real cost of capital. 4. Raising equity capital from external sources - shares and their value (nominal, book, market, etc.), share issue and subscription right - calculation of subscription right in case of additional share issue, subscription right price, new average market price of shares after issue. 5. Raising equity capital from internal sources - financing the company from profits. Factors influencing the formation of the economic result. Taxation of the economic result - adjustment of the economic result to the tax base by means of the so-called addable and deductible items, calculation of the economic result after taxation, distribution of profit. 6. Acquisition of equity from internal sources - types of depreciation (tax, accounting), difference between them. Calculation of depreciation through accounting depreciation methods (straight-line, progressive, declining, uneven). 7. Obtaining financial resources through loans. Establishment of the most commonly used loan repayment plans (repayment plan with the same amount of repayment, with the same amount of total payment, with a regularly increasing repayment, etc.). 8. Financing businesses through the use of finance leases - calculation of the lease price, down payment, lease payment. Application of leasing in financing the acquisition of fixed assets of the enterprise. 9. Comparison of financing through leasing and credit. Conversion of costs related to leasing and credit to present value, selection of an efficient form of financing (in terms of the criterion of cost minimization). 10. Placement of capital in fixed assets - types of investment projects, calculation of basic economic parameters of investment projects (capital expenditures, expected cash receipts, useful life). 11. Evaluating the efficiency of investment projects through methods of evaluating the efficiency of investment projects, with the main focus on dynamic methods (net present value, internal rate of return, as a complementary method payback period with time update). 12. Evaluation of the riskiness of investment projects - use of basic statistical methods in the analysis of the riskiness of investment projects (standard deviation, coefficient of variation). Comparison of the riskiness of several investment projects. 13. Financial investments of the enterprise - basic methodology of calculating the market price of securities (bonds, preferred and common shares). Calculation of expected return and riskiness of securities.