Distance Learning






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Finance

Syllabus for pre-PhD Distance learning course on Economics

FINANCE

Hayk Mnatsakanyan, PhD, Associate Professor
Yerevan State University, Distance Learning Laboratory

1. Course module description
The course module is designed for graduate and post graduate students. This course module covers the major topics in corporate finance and financial management including financial management functions, working capital management, estimation of financial assets, which is intermediate topic from foundations of finance to corporate finance,  capital budgeting, cost of capital and dividend policy. 

2. Objectives of the course module

- To introduce students with the core concepts of finance.
- To give the students the capacity to understand the theory and apply, in real world situations, the techniques that have been developed in corporate    finance and financial management.
- To give the students the big picture of corporate finance so that they can understand how things fit together.

3. Assessment
Since this is a distance-learning course, assessment will be based only on students’ written work.

  • Weekly written essays – 60%
  • Final essay - 40%

4. Course module program

Class 1  The Basics of Financial Management
- The nature and purpose of financial management.
- Financial objectives and the relationship with corporate strategy, stakeholders and impact on corporate objectives.
- Accounting system and financial reports.  
- Calculation of organization profit and cash.   

Readings:
1. Brealy and Myers, Principles of Corporate Finance, Irwin McGraw-Hill. 
2. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance, Irwin McGraw-Hill.
3. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.

Assignment 1:
Please, answer the following questions (up to 5 pages):

  • What is the nature and purpose of financial management?
  • Explain the relationship between financial management and accounting.
  • What kind of relationship between financial objectives, corporate objectives and corporate strategy exist?
  • Describe and explain the importance of financial reports.

Class 2  Financial management environment  
- The economic environment for business.
- The nature and role of financial system.  
- The importance of financial markets and institutions.
- The types of securities markets and securities.

Readings:
1. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance,  Irwin McGraw-Hill.
2. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.

Assignment 2:
Please, answer the following questions (up to 5 pages):

  • What are  the main macroeconomic policy targets and how government economic policy interacts with planning and decision-making in business?
  • What is the role of money and capital markets both in national and international financial systems?
  • What are the functions of financial intermediaries, stock market and a corporate bond market? 

Class 3  The nature, elements and importance of working capital
- The definition of working capital and its importance.
- Elements of working capital.
- The connection of working capital with liquidity and profitability of organization.
- Cash operating cycle.

Readings:
1. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance,  Irwin McGraw-Hill.
2. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.
3. ACCA textbook on Financial Management and Control.

Assignment 3:
Please, answer the following questions (up to 5 pages):

  • What is the nature of working capital and identify its elements?
  • What are the objectives of working capital management in terms of liquidity and profitability? Analyse the conflict between them?
  • What is the role of working capital management in financial management? 

Class 4  Management of inventories, accounts receivable, accounts payable and cash
- Accounts payable and receivable, financial ratios: liquidity ratios, assets management ratios, liabilities management ratios, profitability ratios and market ratios.

Readings:
1. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance,  Irwin McGraw-Hill.
2. William R Lasher, Practical Financial Management, Irwin McGraw-Hill. 
3. ACCA textbook on Financial Management and Control.

Assignment 4:
Please, answer the following questions (up to 5 pages):

  • What were the main financial ratios for estimation of organization economic activities?
  • Discuss and apply the use of relevant techniques in managing accounts payable.
  • Explain the various reasons for holding cash, and discuss and apply the use of relevant techniques in managing cash.

Class 5  Determining working capital inventory control
- Explanation of  the objective of inventory management.
- Definition and explanation of lead time and buffer inventory.
- Application of the basic economic order quantity (EOQ) formula to provided data.
- Calculation the EOQ taking account of quantity discounts and the financial implications of discounts for bulk purchases.

Readings:
1. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.
2. ACCA textbook on Financial Management and Control.

Assignment 5:
Please, answer the following questions (up to 5 pages):

  • What is the necessary level of the working capital? Please, substantiate your answer.
  • What is the organization’s policy on the level of inventory?
  • What is the EOQ formula?

Class 6  Capital Budgeting
- The nature of investment decisions and the appraisal process.
- Discounted cash flow techniques.
- Capital budgeting techniques: NPV, IRR, Payback period, Profit index.

Readings:
1. Brealy and Myers, Principles of Corporate Finance, Irwin McGraw-Hill.
2. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance, Irwin McGraw-Hill.
3. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.

Assignment 6:
Please, answer the following questions (up to 5 pages):

  • What is the relationship between interest rates and inflation, and between real and nominal interest rates?
  • What are the advantages or disadvantages among different capital budgeting techniques? Please, substantiate your answer.

Class 7  Cost of Capital
- Sources of finance and their costs.
- Capital structure.
- Cost of equity, cost of debt, weighted average cost of capital.  

Readings:
1. Brealy and Myers, Principles of Corporate Finance, Irwin McGraw-Hill.
2. Stephen A. Ross, Rndolpn W. Westerfield and Jaffrey F. Jaffe, Corporate Finance,  Irwin McGraw-Hill.
3. William R Lasher, Practical Financial Management, Irwin McGraw-Hill.

Assignment 7:
Please, answer the following questions (up to 5 pages):

  • What are the capital structure theories and practical considerations?
  • What kind of methods exists for capital cost calculation. 
  • What Impact does cost of capital have on investments? Please, substantiate your answer.             

Class 8  Closing exam
Based on your interest, choose any topic discussed within this course module and write an analytic essay (13-15 pages).

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