Upon successful completion of this course, students will be able to:
- explain different ways in which entrepreneurial start-ups as well as small- & medium-sized enterprises organise and manage major financial management functions;
- describe the organisation of international financial markets & institutions;
- apply different valuation techniques, the modern portfolio theory and asset pricing models to financial assets like stocks and bonds;
- identify and analyse various types of risks and their measurement;
- analyse issues related to raising capital, capital structure, dividends & share repurchases, financial planning, mergers & acquisitions; and discuss the impact of these decisions on firm performance/value;
- apply scientific methodologies (e.g. mean-variance framework) and IT techniques (e.g. Excel spreadsheets) used in making financial decisions;
- explain how firms that have zero or negative cashflows are valued; how startups and small firms pitch to their potential investors;
- describe how investors and firms deal with new financial innovation and investments;
- describe how human behaviour and psychology influence financing and investment decisions; and
- perform an analysis related to performance of private firms that go public and the effects of investments in foreign stocks
Finance managers of all these firms need to take smart decisions that can increase firm performance and create firm value. They not only communicate with venture capitalists, angel investors, private equity firms, financial institutions and capital markets in raising necessary funds to carry out the required investments, but also ensure generating sufficient cash to reinvest and payback investors. Finance managers regularly take many other decisions too. Start-ups and SMEs in particular are confronted with the option of whether to continue accessing funds from banks, venture capitalists, or to go for initial public offering (for example, Takeaway on 30 September 2016; Dropbox on 23 March 2018; Uber on 10 May 2019) and issue new securities in the public capital market|
In addition, finance managers deal with opportunities, problems and challenges arising from financial innovations driven by institutional changes and technological advances. New financing options like crowdfunding, and peer-to-peer lending have become popular in recent years. The practices like e-finance, e-trading are creating opportunities as well as serious security challenges for firms and financial institutions. Business management students should therefore possess a good understanding of the variety of financial decisions made in practice, and more importantly, how these decisions affect receipts and disbursement of firm’s cash flows and subsequently affect firm performance. They should also be familiar with the financial management tools and techniques specifically used by firms & investors, and the important roles played by venture capital and private equity.
Superior financial management also requires a good knowledge of the functioning of financial markets and remaining up-to-date with changes taking place in the international financing & investment environment. These days investors have relatively easy global access to a vast array of financial assets; they need to know which investment policies and strategies can provide them superior investment performance. The module will also help students to understand all these decisions.
What is unique about FENSI?
The module integrates three closely-related areas of financial management: Corporate Finance, Investments and Entrepreneurial Start-up valuation. It will enable students to become familiar with financial decisions by combining important theoretical concepts with institutional contexts and real-life examples. Students will deepen their understanding of financing sources, and valuation of start up, that have zero or negative cashflows and learn how firms interact with diverse categories of investors and capital markets. They will learn how financial decisions are affected by global, economic, social and technological considerations. Attention will also be given to distinct issues, for example, behavioural finance, crowdfunding, peer-to-peer lending or socially responsible investments.
In addition to learning different concepts, theories and analytical methods from the three knowledge domains, students will have the opportunity to apply their knowledge and understanding into practice by working on a project. It will enable students to develop various skills, e.g. analytical (both qualitative and quantitative), problem-solving, reporting and group working.
Assumed previous knowledge
|Basic knowledge of subjects like Organisation, Strategy, Accounting and Finance. Statistical and computing skills will be helpful too, and specifically for UT minor-students knowledge from Accounting and Finance e.g. McLaney, E., and Atrill, P. (2020) Accounting and Finance: An introduction, 10th edition. Pearson. (ISBN 9781292312262 ) can be helpful.|
|Bachelor International Business Administration||Required materials|
|Selected chapters from;
Fundamentals of Corporate Finance (ISBN: 978‐1‐526‐82217‐8 / 978-0-077-17823-9)
Hillier, D., Clacher, I., Ross, S., Westerfield, R. and Jordan, B. 3rd European Edition, 2017, Maidenhead: McGraw-Hill.|
|Selected chapters from; (ISBN: 9781265450090
Bodie, Kane, Marcus. Essentials of Investments, McGraw-Hill, 12th Global Edition, 2021|
|Selected chapters from;
Entrepreneurial Finance, 7th Edition, 2021; ISBN10: 0-357-44204-0; ISBN13: 978-0-357-44204-3 AUTHORS: Leach/Melicher|
|Start-up Valuation and Analysis|