Aims

The aims of the course are to:

• provide an introductory understanding of financial reporting and decision making by companies.

Objectives

As specific objectives, by the end of the course students should be able to:

• construct the company financial statements from a jumble of raw data.
• interpret these statements.
• understand how to identify and finance the investments companies should undertake.
• understand why and how companies compensate their investors.

Content

The first part of the module examines fundamental accounting concepts, and shows how to construct and interpret company accounts, a critical source of information to outside investors. The second part of the module tackles the three key areas of company decision making: the capital budgeting decisions of how the company should invest; the financing decisions of how the company should raise the investment capital; and the payout decisions of how the company should compensate its shareholder

Financial Accounting

Detailed discussion of fundamental accounting concepts; construction of company financial statements (balance sheet, income statement, cash flow statement); an awareness of creative accounting
 

Finance

Nature and objectives of finance; time value of money and risk versus return; capital budgeting decisions (opportunity cost of capital, investment rules such as Net Present Value; financing decisions (debt versus equity); payout decisions (dividends and share repurchases).