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Course Objectives
This course is designed to provide you with a foundation
in Managerial Finance. As such the course's main emphasis is on managerial decision. Finance can be viewed in a variety of ways. One way to view finance is to consider the specific industries and organization
that aim at serving the financial needs of companies and individuals, such as banks or insurance companies. A second way is to view finance as a basic function required of
everyone. All entities have a need to solve the financial problem(s) that they face. It is the latter approach we will take in this course. We are going to look
at corporate decision making from a financial viewpoint.
All firms must successfully perform at least three functions. One they must produce something. Two they must market whatever it is that they produce.
And three they must finance the entire operation. Without all three the firm will fail. We are going to look at the firm from the
financial viewpoint. You will have a chance to study the other functional areas in other classes. Historically, as organization grew in size they began to hire
specialized individuals to perform many tasks, but every business must do
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Final Exam Schedule Spring 2007
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4:00 PM
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Thu, May 10
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1600 - 1800
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Exam Review Sessions
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Exam 1
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Tue, Feb 11 Room: BAM 343
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5:00 PM
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Exam 2
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Tue, April 17 Room: BAM 343
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5:00 PM
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Final Exam
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Tue, May 8 Room: BAM 343
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5:00 PM
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the three functions even if it is a one person company. In addition to the three functional areas many business have found it useful to hire specialized support individuals. These staff individuals perform
a variety of tasks that many firms would find it difficult to live without. But this does not mean that firms must have these functions in order to succeed. In fact one of the current trends is to
out-source or eliminate many of these staff services as evidenced by the growing number of virtual companies. But even a virtual company must still
perform the three functions, of production, marketing and finance.
Thus what is finance about? The answer depends in part on whom you ask.
Some people think that finance is the creation of a bunch of financial statements. Some think it is about banks, stock exchanges, and such. Some
think it's a bunch of formulas. I think finance is about valuation within a market context. Valuation is about decision making. Decision making means
choosing between alternatives, without a choice, no decision is needed. Thus finance exists to help choose between the many alternatives that firms
(and individuals) face each day. How do you choose from all of those things you could do? The answer to that question is very difficult and clearly not
absolute. One of the fundamental aspects of valuations is a realization that all of us are subject to discipline of financial markets. Financial markets are the
places where we trade time dependent financial assets.
The course is composed of four parts. The first part deals with the financial
information that a firm generates. The second part deals with valuation tools and their applications. The third section deals with financial markets and the
supply of capital. The last section of the course deals financial planning.. Upon the completion of this course you should have an understanding of the
above four parts and be able to use the concepts and tools to make managerial decisions.
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