Financial Management
Based on the time value of money and the risk value, the course take the acquisition, investment and management of assets as a mainstream，exploring the related theory and practice required to achieve the goal of shareholders’ wealth maximization. The course therefore introduces the three major decision-making areas in financial management: the investment, financing, and asset management decisions. On completion of this course students should be able to: understand how financial management can add value to an organization; apply tools of financial analysis and planning; make various decisions about investment, financing and asset management; know special areas of financial management.
Knowledge Tree
First Level |
Second Level |
Third Level |
The role of Financial management |
Financial decisions |
Investment decision Financing decision Asset management decision |
The goal of the firm |
Profit maximization Earnings per share Stakeholder wealth maximization |
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Value |
Time value |
Interest Interest rate Simple interest Compound interest Future value（terminal value） Present value |
Risk and return |
Expected return Standard deviation Coefficient of variation Risk attitudes Diversification Systematic risk Unsystematic risk Capital-asset pricing model Security market line |
|
Financial analysis |
Financial statement analysis |
Liquidity ratios Debt ratios Coverage ratios Financial leverage ratios Activity ratios |
Working capital management
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Permanent working capital Temporary working capital Spontaneous financing Hedging approach Cash and marketable securities management Accounts receivable management Inventory management Short-term financing |
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Investment in capital assets |
Capital budgeting Estimating cash flows |
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Capital budgeting techniques |
Discounted cash flow（DCF） Payback period(PBP) Internal rate of return Interpolate Net present value |
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Managerial options |
Independent project Dependent （contingent） project Mutually exclusive project |
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Cost of capital
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Cost of equity capital Cost of debt Cost of preferred stock |
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