Debt Financing

  • Credits: 4
  • Ending: Examination
  • Range: 2P + 2C
  • Semester: summer
  • Year: 1
  • Faculty of Business Economics with seat in Košice

Teachers

Included in study programs

Corporate Financial Management

Teaching results

The aim of the course is to acquire theoretical knowledge and practical skills in the field of debt financing of companies, especially through bank loans and guarantees, and to point out alternative financing options. Students will expand their knowledge in the field of corporate financial management and theory of loan decisions, including the practical application of acquired knowledge through the problem solving activities.
Knowledge:
• to understand the theory of loan decisions with the intention to expand knowledge of corporate financial management,
• to gain deeper and more comprehensive knowledge about specific types of loans,
• to know alternative forms of business financing,
• to understand the principles of securing bank loans,
• to understand the essence of corporate management in debt conditions.
Skills:
• to analyze debt sources of corporate financing,
• to compare and evaluate debt sources of corporate financing in accordance with the needs of the company,
• to integrate the acquired knowledge into practical procedures when deciding on debt financing of a company,
• to discuss current problems and their possible solutions.
Competences:
• the ability to think responsibly in the intentions of corporate debt financing,
• to evaluate critically alternative methods of corporate debt financing,
• to predict creatively the possibilities of corporate debt financing.

Indicative content

Lectures:
1. Subject of debt financing and legal aspects of loan and loan financing.
2. Debt and corporate debt financing.
3. Loan decision-making in the financial decision-making of the company.
4. Bank loans as a tool of corporate debt financing – classification of bank loans, short-term loan financing.
5. Bank loans as a tool of corporate debt financing – long-term loan financing, methods of loan repayment.
6. Non-monetary loans of the company.
7. Alternative debt forms of business financing.
8. Company and bank in the process of loan management.
9. Securing of loans.
10. Financial management in debt conditions of the company.
11. Credit risk management and interest rate risk management.
12. International loans and possibilities of their use in the company.
13. Bank loans in selected countries of the European Union.
Seminars:
1. Course syllabus, requirements for meeting the conditions of the active form of teaching. Introduction to finance issues. Basic concepts related to debt financing.
2. Methods of debt interest.
3. Quantification of debt needs.
4. Debt costs.
5. Debt limits of the company.
6. Short-term loan financing – overdraft loan, bills of loans. Partial written test.
7. Long-term loan financing – methods of loan repayment, present value of debt, mortgage loans.
8. Long-term loan financing – evaluation of advantages of long-term loans.
9. Non-monetary loans of the company.
10. Alternative debt forms of business financing – factoring, forfaiting.
11. Alternative debt forms of business financing – leasing.
12. Bank loans for small and medium-sized enterprises in selected countries of the European Union. Partial written test.
13. Current issues in the field of corporate debt financing.

Support literature

Elementary literature:
1. VALÁŠKOVÁ, K. – KOVÁČOVÁ, M. – KUBALA, P. Dlhové financovanie. Žilina : EDIS, 2019. 159 s. ISBN 978-80-5541-536-9.
2. WARD, A. M. Finance: Theory and Practice. 4th Edition. Chartered Accountants Ireland, 2020. 912 p. ISBN 978-1-912350-36-0.
Supplementary literature:
3. BAČOVÁ, M. Základy bankovníctva. Bratislava : Ekonóm, 2013. 164 s. ISBN 978-80-225-3586-1.
4. HYRÁNEK, E. – JÁNOŠOVÁ, V. Dlhové financovanie. Praktikum. Bratislava : Ekonóm, 2012. 104 s. ISBN 978-80-225-3388-1.
5. ROGERS, S. Entrepreneurial Finance. Finance and Business Strategies for the Serious Entrepreneur. Fourth Edition. McGraw-Hill Education, 2020. 384 p. ISBN 978-12-6046-144-2.
6. HYRÁNEK, E. a kol. Dlhové financovanie. Bratislava : Ekonóm, 2012. 186 s. ISBN 978-80-225-3365-2.
7. Current scientific and professional articles dealing with current problems in the field of debt financing.

Syllabus

Lectures: 1. Subject of debt financing and legal aspects of loan and loan financing. 2. Debt and corporate debt financing. 3. Loan decision-making in the financial decision-making of the company. 4. Bank loans as a tool of corporate debt financing – classification of bank loans, short-term loan financing. 5. Bank loans as a tool of corporate debt financing – long-term loan financing, methods of loan repayment. 6. Non-monetary loans of the company. 7. Alternative debt forms of business financing. 8. Company and bank in the process of loan management. 9. Securing of loans. 10. Financial management in debt conditions of the company. 11. Credit risk management and interest rate risk management. 12. International loans and possibilities of their use in the company. 13. Bank loans in selected countries of the European Union. Seminars: 1. Course syllabus, requirements for meeting the conditions of the active form of teaching. Introduction to finance issues. Basic concepts related to debt financing. 2. Methods of debt interest. 3. Quantification of debt needs. 4. Debt costs. 5. Debt limits of the company. 6. Short-term loan financing – overdraft loan, bills of loans. Partial written test. 7. Long-term loan financing – methods of loan repayment, present value of debt, mortgage loans. 8. Long-term loan financing – evaluation of advantages of long-term loans. 9. Non-monetary loans of the company. 10. Alternative debt forms of business financing – factoring, forfaiting. 11. Alternative debt forms of business financing – leasing. 12. Bank loans for small and medium-sized enterprises in selected countries of the European Union. Partial written test. 13. Current issues in the field of corporate debt financing.

Requirements to complete the course

active participation in seminars, additional exercises, partial written tests
written exam
Continuous assessment 40 %:
• active participation in seminars – 10 %
• elaboration of additional exercises – 10 %
• partial written tests – 20 %
Final assessment:
• written exam – 60 %

Student workload

• participation in lectures – 26 hrs.
• participation in seminars – 26 hrs.
• preparation for seminars – 12 hrs.
• preparation for partial written tests – 10 hrs.
• preparation for written exam – 30 hrs.
Total: 104 hrs.

Language whose command is required to complete the course

Slovak

Date of approval: 15.02.2023

Date of the latest change: 06.04.2024