EM-620 Finance and Accounting 3 - 0 - 3


Description

This course introduces the student to the finance and accounting concepts that are necessary to effectively manage in the business organization of today. It entails looking at both theory and practice, and covers the enterprise from overall operations to projects. It includes acquiring a knowledge of and working with the financial statement as well as the principal aspects of financial planning and control. In addition, basic financial concepts that are covered include cash flow presentation and analysis, capital investment decision making and both long-term and short-term financial decision making.

Prerequisites

  • Graduate standing

Materials

Required:
  • Fundamentals of Corporate Finance, 8th ed. Ross, Westerfield & Jordan, Irwin McGraw Hill, 2007

Course Learning Outcomes

Upon successful completion of this course, the student will:
  • Have been provided with the financial and accounting knowledge necessary to understand the principles behind financial decision making in today's business organization, with a specific focus on capital budgeting and project management.
  • Identify and relate to the role financial management plays in the management of today's business organization.
  • Work with the financial statements, knowing what they report, and how to use them to make better decisions.
  • Recognize and use cash flow in decision-making.
  • Work with the concepts of Time Value of Money and use these in the making of investment decisions.
  • Perform business financial planning including the preparation of budgets and pro-forma financials.
  • Apply the introduced financial tools and techniques in order to make sound business decisions.
  • Identify the concept of Cost of Capital and the various related sources of capital available to business, both short-term and long-term.

Course Topics

  • Introduction to corporate finance
    Corporate finance - defined and differentiated, forms of business organizations, introduction to financial markets
  • Financial statements
    Balance sheet and income statement, taxes and cash flows
  • Working with financial statements
    Statement of cash flows, ratios and ratio analysis, Du Pont identify, depreciation as a cost and a cash flow
  • Time value of money and its use
    Future value and compounding, present value and discounting, multiple cash flows and annuities
  • Net present value and other investment criteria
    Net present value, payback rule, discounted payback rule, average accounting return, internal rate of return, profitability index
  • Making capital investment decisions
    Cash flow elements of a project, pro-forma financial statements and cash flows, cost analysis by behavior depreciation (MACRS), net working capital and the project, special cases in discounted cash flows
  • Project analysis and evaluation
    Evaluating NPV estimates, scenario and other what-if analysis, break-even analysis - cash, operating and financial, operating leverage, capital rationing
  • Long-term financial planning and growth
    What is it and what is value, financial planning model with a focus on balance sheet, external financing and growth
  • Cost of capital
    Defined and relationship to financial policy, cost of equity, cost of debt and preferred stock, weighted average cost of capital and its use
  • Raising capital
    financing life cycle of a firm, selling securities to the public, alternate issue methods, IPO's and underwriting, issues surrounding debt and equity issues

Prerequisites by topic

  • None

    Laboratory topics

    No Laboratory Topics have been appended

    Course topics by day

    Lecture/Lab topics

    ACCE content

    General Education Math & Science Business & Mgmt. ConstructionConstruction Science
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    ABET/EAC content

    Engineering topics Design General education Math/ScienceOther
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    ABET/TAC content

    Communications Math & Science HU/SS Tech ContentOther
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    Coordinator

    Robert Hankes, Adjunct Associate Professor

    Last review

    Bruce Thompson, Professor, Program Director, MSEM
    on Apr 27, 2004

    Last update

    Bruce Thompson, Professor, Program Director, MSEM
    on Apr 27, 2004