BUS202 - Principles of Finance
Principles of Finance (3 credits)
Students in this course will learn how managers, investors, and government agencies use the financial records that are prepared by businesses and nonprofits. They will also learn how to use these financial statements to make assessments of future return.
Student will learn how to use financial concepts such as the time value of money, pro forma financial statements, financial ratio analysis, capital budgeting analysis, capital structure, and the cost of capital. The course will also provide an introduction to bonds and stocks. Upon completion of this course, they will understand financial statements, cash flow, time value of money, stocks and bonds, capital budgeting, ratio analysis, and long term financing, and apply these concepts and skills in business decisions.
Upon successful completion of this course, the student will be able to:
- Explain the objectives of the financial manager and how the structure of a corporation affects financial decisions.
- Explain how the financial manager uses and analyzes the income statement, the balance sheet statement, and the statement of cash flows to make better informed decisions.
- Explain the concept of time value of money and how the present value calculation is related to the future value calculation.
- Explain the rules and methods in capital budgeting when making financial decisions.
- Explain how the financial manager makes financial investment decisions when confronted with issues of risk and uncertainty while considering different risk preferences.
- Explain the different components of a company’s capital structure.
- Explain the Modigliani-Miller theorem in finance.
- Apply the WACC formula for estimating a company’s cost of capital.
- Explain the use of the CAPM model for estimating valuations of a company’s rate of return.
- Use Excel to prepare an analysis of a company’s financial statements and stock data.
Textbook: To Be Determined