Financial management is concerned with the creation and maintenance of wealth and is an integral part of overall corporate strategy. This course focuses on three key areas within the finance function. Long-term policy decisions deal with financing, capital structure, dividend, and investment decisions. Short-term policy decisions deal with working capital management such as the management of cashflow, receivables, trade credit, and inventory. Finally, the global perspective deals with political and currency factors, government regulation, emerging and new market opportunities.
- Distinguish between profit maximization (a tactical and unprofitable aim) and value maximization (a strategic and desired goal).
- Understand the basic framework for determining investment value and why the risk and timing of cashflows are essential considerations.
- Distinguish between economic value-added and market value-added.
- Recognize the four major financial management policy issues: capital structure, financing, dividend, and investment decisions.
- Understand how the market environment – both domestic and global – impacts financial decision-making.
- Understand how asymmetric information between the firm and its investors may lead to different assessments of the firm’s value.
- Cases are developed based on contemporary financial problems in industry. Practical application experience is gained from documented cases in the financial press, including, but not limited to, the Wall Street Journal and CNBC.
Spreadsheet analysis is employed for case preparation and presentation.