Financial Management (in English)

Syllabus

Thematic definition of lectures: 1. Financial management - basic definition, essential knowledge and skills of a financial manager. Roles and activities of a financial manager. The position of financial management in the organisational structure of the company (taking into account size criteria, legal form of business). Impact of the macro- and micro-environment on financial management. Specific issues of financial management - agency, social responsibility and business sustainability. 2. Ownership and participation approach in the formulation of business and core financial objective of the enterprise. Sub-financial objectives. Financial strategy - nature, formulation and linkages to other functional strategies of the enterprise. Components of financial strategy - debt policy, credit policy, tax policy, liquidity policy, profit distribution policy, financial reporting policy. 3. Basic bases of financial analysis of an enterprise - information inputs and financial reporting, construction of financial ratios, interpretation of results. Trend, time and spatial (sectoral) analysis, pyramidal decompositions. Creditworthiness, bankruptcy and credit-bankruptcy models. Prediction of financial health of the enterprise by complex sets of indicators. 4. Financial planning - main tasks and principles, organisation of the planning process, link to financial analysis. Periodic and project planning. Basic outputs of long-term and short-term financial plan. Evaluation of financial performance of the enterprise - identification of the degree of financial health, financial sustainability and economic normal. 5. Financial market - the place of raising capital. Financial market segments - money, capital, foreign exchange, insurance, precious metals, derivatives. Financial market organiser and participants. Construction of the stock exchange index and its predictive value. Forms of corporate capital - own (external and internal sources), foreign (external and internal sources). 6. Management of corporate capital - quantification of the cost of own and foreign capital, determination of the cost of capital. Optimization of enterprise capital structure - initial assumptions, determinants and theoretical approaches - classical, traditional, Miller-Modigliani, trade-off theory and specific approaches. Agency linkage to the processes of optimization of the capital structure of the enterprise. 7. Intangible and tangible fixed assets - characteristics of investment decision-making and basic parameters of the investment project. Interactions between pairs of investment projects and possibilities of solving potential problems. The procedure of quantification of capital expenditures of the project, cash flows of the project. Static methods of investment projects preference evaluation. Dynamic methods of investment project preference assessment. 8. Investment decision-making and risk - technical (internal, external), commercial (internal, external) and financial risk. Application of the real options approach to long-term project decision-making. Impact of inflation on investment project parameters, implications for project preference assessment methods. Other specific methods of investment project preference assessment. 9. Financial instruments and financial risk - the content of financial investment from a time perspective, the portfolio of financial instruments and the motives for its formation, the definition of the vertices of the magic triangle of the financial investor. Procedures of quantification and forms of financial instrument profitability, financial instrument riskiness and financial instrument (financial market) liquidity. Optimisation of the process of portfolio value creation and management. Basic financial investment strategies. 10. Short-term (current) assets - structure and cycle, operating and cash cycle. The main methods of optimization of production inventories and products of the enterprise. Basic procedures of management of the enterprise's receivables. Models of optimization of prompt cash. 11. Policy of distribution of net profit - dividend policy of the enterprise, division of dividends by types and forms. Dividend and anti-dividend policy of the enterprise. Dividend neutrality policy. Legislative and financial factors, objective and subjective factors determining the dividend policy of the enterprise. 12. Payment services and payment operations - choice of payment methods (forms) and instruments, payment system and payment service providers. Documentary payment instruments. Domestic and foreign payment operations. Bank guarantee, bill of exchange, cheque as components of payment instruments. 13. Causes and forms of involvement of enterprises in international financial relations. Motives leading to the decision to merge or acquire enterprises. Forms of mergers according to the production focus and ways of combining enterprises. Determination of expected merger outcomes and expected merger costs. Methods of financial settlement of merger by merger and merger by acquisition. Evaluation of merger results. Thematic definition of exercises: 1. Analysis of the current financial situation of the enterprise - basic documentation (financial statements). Definition of interrelationships within the tribalance system. Identification of the business entity on the basis of selected financial and performance indicators. Horizontal and vertical analysis 2. Identification of background information for the purpose of financial strategy formulation. Interpretation of the intentions of selected businesses on the basis of published financial strategies. Approaches to the formulation of corporate financial objectives. 3. Analysis of the financial situation of the enterprise - financial ratios. Liquidity, activity, indebtedness, profitability and market value of the enterprise. Trend and time analysis of ratios. Identification of interrelationships of selected ratios. 4. Formulating the basis of the financial plan of the enterprise - forecasting the target values of qualitative and quantitative indicators. Integration of the impact of industry parameters on the outputs of the long-term financial plan. 5. Evaluation of the financial performance of the enterprise - identification of problems and inconsistencies between individual outputs of financial planning. Assessment of the quality of the financial plan - Altman Z-score, Creditworthiness Index, IN model, economic normal. 6. Quantification of cost of equity - ß-factor approach, building block method, dividend approach. Quantification of cost of foreign capital - interest bearing and non-interest bearing capital. Impact of the interest tax shield on the cost of capital. Cost of capital in absolute and relative terms. 7. Capital structure modelling and EVA (economic value added). Approaches leading to the translation of capital structure determinants into cost of capital - financial leverage, cost of financial distress, agency costs. Point of indifference. 8. Investment project preference assessment - net present value, internal rate of return. Impact of inflation and risk on investment project parameters. Determination of the discount factor. Impact of financing methods on the efficiency of the investment project. 9. Determination of return on equity and debt financial instrument (income and capital return). Methods of assessing the riskiness of a financial instrument and the implications for the price of the financial instrument (issue, face, market, intrinsic, fair value). 10. Portfolio investing - process approach (steps). Portfolio performance evaluation, quantification of portfolio risk. Use of CAPM approaches in improving portfolio performance. Use of derivative instruments in portfolio value management. 11. Management of receivables and their valuation - determination of the procedure of decision making on granting trade credit. Evaluating the benefits of granting trade credit. Quantification of borrower credit default and impacts on receivable value. 12. Cash and short-term liability management - Baumol model, Miller-Orr model. Short-term investment parameters - yield, transaction costs, conversion time. Fixed and volatile liabilities, trade credit and APR (annual percentage rate of charge). 13. Mergers and acquisitions - determining the costs of the merger and the financial benefits to the parties to the transaction. Financial issues of dealing with the financial settlement of a merger. Presentation of the advantages and disadvantages of selected vertical, horizontal and conglomerate mergers.