Get insights on how to value a project and financial assets ... Atrill P. and
McLaney (2008), Accounting and Finance for Non-Specialists, 6th edition o
Chapters 1 ...
Prof. Mathias SCHMIT Objectives of the course Introduce the basic principles in finance Present the fundamentals of financial analysis Understand how to finance operations Understand and compute interest rates Get insights on how to value a project and financial assets Give insights on rating methodology Planning Date 17/09/2013 20/09/2013 05/10/2013
Bring a laptop (per group of 4) Bring a laptop (per group of 4) Bring a laptop (per group of 4) Bring a laptop (per group of 4) Bring a laptop (per group of 4)
Place R42.4.110 R42.4.110 R42.4.110 R42.4.110 R42.4.110 R42.4.110 R42.4.110
Topics covered 1) Introduction to financial statements analysis Balance sheet and income statement o Financial statement reading o Explanation of the evolution with time Definition and interpretation of major ratios o The levers of financial performance o Return on equity (ROE) and its determinants o Ratio analysis o A critique of ROE and ratio analysis o Distinction between accounting and market values Cash flow statement o Definition of free cash flows o Definition and use of net working capital, working capital requirement and net liquid balance o Comparison between cash flow and profit Application to a financial institution o Identification of the characteristics of banks’ financial statements
2) Time value, discounting techniques and investment decisions Generalities on interest rate, yield curve and credit o Reading interest rates information in the newspaper o Description of bond, loans and MFI loans Discounting o Discounting principles and rules o Investment decision Usage of interest rate o Loan valuation o Bond valuation o Stock valuation o Effective interest rate calculation
3) Review: Understand a credit rating report (if the time allows)
2
Teaching method Topics are generally presented by an interactive lecture which includes short exercises and case studies enabling participants to reinforce immediately their understanding of the concepts taught. Active participation from the participants is required. Pre-Readings •
McIsaac (2004), Understanding Annual Reports and Company Accounts., 27 pages READ PAGES 1 TO 16.
Some references •
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Atrill P. and McLaney (2008), Accounting and Finance for Non-Specialists, 6th edition o Chapters 1 to 6 and 12 R. Higgins (2009), Analysis for Financial Management, McGraw-Hill, 9th edition
Evaluation • •
Optional course – no evaluation If you decide to take the course, your active presence is mandatory.
