Accountant’s Guide to Financial Management (MTDP)

Pre-requistes:

Knowledge Level:

Major Topics:

• An Overview of Financial Management
• Financial Statements and Cash Flow
• Evaluating a Firm's Financial Performance
• Improving Financial Performance
• Budgeting, Planning, and Financial Forecasting
• The Time Value of Money
• The Meaning and Measurement of Risk and Rates of Return
• Valuation of Stocks and Bonds
• The Cost of Capital
• Capital Budgeting: Techniques and Practice
• Determining the Financing Mix
• Managing Liquid Assets
• Short-Term Financing
• Debt Financing
• Equity Financing
• International Finance

Learning Objectives:

• Identify the objectives of managerial finance.
• Distinguish between profit maximization and stockholder wealth maximization.
• Recognize factors that affect the value of a firm.
• Recognize the role of financial managers.
• Recognize the various legal forms of business organization.
• Identify the basic financial statements used by a firm.
• Recognize how the balance sheet portrays a company’s financial position.
• Identify the components of a statement of cash flows.
• Recognize how footnote disclosures are used, and requirements for segment reporting.
• Recognize reporting requirements of the Sarbanes-Oxley 404.
• Identify which factors are used in evaluating a firm’s stock.
• Recognize a comprehensive set of financial ratios and how to interpret them.
• Recognize how ROI can be enhanced by management.
• Identify the basic components of the Du Pont formula and how it can be used for profit improvement.
• Recognize steps in projecting financial needs by using the percent-of-sales method.
• Identify major steps in preparing the master budget.
• Recognize how the cash budget can be used to more effectively conduct financial management.
• Recognize the concept and use of the time value of money.
• Calculate the present value of a future payment.
• Recognize the definitions for annuities and minimum rates of return.
• Recognize the components required to compute the return of an investment.
• Define the risk-return trade-off used in understanding diversification.
• Identify the types of risks reported by beta in its use in designing a portfolio.
• Using the Capital Asset Pricing Model (CAPM), calculate portfolio return and portfolio risk.
• Using the Arbitrage Pricing Model (APM), compute rate of return.
• Recognize the key inputs and concepts underlying the security valuation process.
• Distinguish between preferred stock and common stock.
• Recognize the various methods of common stock valuation.
• Compute costs of financing for long-term debt.
• Identify the overall cost of capital.
• Recognize factors used in computing the overall cost of capital.
• Define the capital budget.
• Identify capital budgeting methods used to grow a company.
• Recognize how different project conditions can affect ultimate investment decisions.
• Recognize the types of depreciation methods.
• Identify how operating leverage affects a firm and compute total leverage.
• Recognize the primary objective of capital structure decisions and the influences on capital structure decisions.
• Understand the components of working capital and how to compute work capital.
• Recognize different methods of managing accounts receivable and how they affect cash flows.
• Recognize ways to better manage inventory, including the economic order quantity and the ABC inventory control method.
• Recognize the different short-term financing instruments and when one is most appropriate.
• Recognize the advantages of using bonds for long term financing.
• Identify the types of bonds that can be issued.
• Recognize the advantages and disadvantages of the different kinds of stock and other equity securities.
• Identify the types and characteristics of equity financing.
• Recognize the role of the investment banker.
• Distinguish difference between a private and public placement of securities.
• Recognize the key features of the financial management of a multinational corporation (MNC), including foreign exchange issues.
• Identify ways to control currency risk.
• Recognize different types of foreign exchange exposure.
• Recognize ways to rate political risk.
• Identify various international sources of financing.

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