UCL - Foundations of financial management

[FSA2240]

[30h + 15h] 4 credits

This course is taught in the 2d semester.

Teacher(s): Philippe Grégoire

Language: French

Level: Second

Aims
Main themes
Content and teaching methods

Aims

Objectives (in terms of competencies)
Give to our student a fair understanding of the methods and concepts that support the decion processes in the field of finance. A specific attention is dedicated to the capital budgeting decisions and the financing decisions.

Main themes

Financial statements, balance sheet, income statement and cash flow statement.
Financial statements analysis. Solvability, liquidity and profitability.
Financing decisions. Issues of common shares or corporate bonds.
Capital budgeting decisions

Content and teaching methods

Overview of the financial statements.
Financial forecastings.
Profitability analysis, Return on Equity and Return on Investment.
Risk-return trade-off associated to the debt. Financial leverage.
Risk-return trade-off associated to the fixed assets and fixed cost. Operating leverage.
Financing decisions : issues of common stocks vs issue of corporate debt.
Weighted average cost of capital (WACC)
Selection criteria in capital budgeting : payback, internal rate of return,net present value.
Introduction of risk in capital budgeting.