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367310a Corporate Finance

Zuletzt geändert:25.09.2017 / Brand
Sprache: Deutsch
Art: Virtual Classroom
Umfang: SWS
ECTS-Punkte: 6
Workload: siehe Hinweise auf Modulebene
Inhaltliche Verbindung zu anderen Lehrveranstaltungen im Modul: keine unmittelbaren Verbindungen
Beschreibung: Organization and functioning of capital/securities markets
  • Primary capital markets
  • Exchanges and OTC markets
Industry and company analysis/stock valuation
  • Business cycle and industry sectors
  • Analysis of industry competition
  • Estimating intrinsic value, EPS and earnings multiples
Capital budgeting and measuring economic profitability
  • Cost of Capital, CAPM Cost of Equity
  • Economic profitability/Value based management/compensation
Capital structure and leverage
  • Target capital structure
  • Business/Financial risk
  • Liquidity and Cash Flow analysis
Merger & Acquisitions
  • Motives and estimated gains and costs
  • Take over tactics and battles
  • Merger and economy
Corporate Governance
  • Financial Markets and Institutions
  • Ownership, Control & Governance
English Title: Corporate Finance
English Abstract: Corporate financial management is related to the management of corporate funds. Two major aspects are procurement of funds and utilization of funds. Other major decisions taken at corporate financial management level are decisions with respect to financing, capital structure, investing, working capital, performance appraisal and financial valuations. Management of finance at corporate or business organization level is corporate financial management. Corporate financial management is practiced at the finance department of any business organization. It deals with all the matters related to finance. Broadly, this department or corporate financial management function deals with financing and investing decisions of the business. Financing decisions are concerned with selecting right sources of finance for operating the business in appropriate mix whereas investing decisions are the decisions about utilizing the funds acquired by financing decision departments in the most efficient manner by analyzing the projects for their returns and achievement of organizational goals. Financing decisions involve analysis of different means of finance. Means of finance are globally classified into two - equity and debt. Equity is the owner’s funds which include preference capital and retained earnings apart from the equity capital. Debt, also known as loan fund, includes debentures, term loans and short term borrowings. Financing decisions are taken based on the analysis of different means of funds in terms of their costs, dilution in control, risk, and restraint on managerial freedom. For determining the appropriate mix of these funds, capital structure techniques play an important role. Some of the major capital structure approaches are net income approach and net operating income approach. On the other hand, investing decisions involve analysis of projects and capital expenditures using capital budgeting techniques. Net present value (NPV), cost-income ratio (CIR), internal rate of return (IRR), payback period etc are the renowned capital budgeting techniques. Investing decisions are taken based on the viability of the investment proposal in terms of its capital requirement, cash flows, profitability, etc. These parameters are best judged using the capital budgeting techniques.
A periodic aspect of corporate financial management comes up with two aspects – long term financial management and short term financial management. Short term financial management is the aspect where working capital management plays a big role. Working capital management deals with managing day to day finance requirements of a business. In business terms, we can say that it deals with current assets and current liabilities. Working capital management involves managing cash and liquidity, credit, inventory and the working capital itself. Different ratios and techniques are used to decide about the right cash and inventory levels.
Financial analysis and planning is another important part of corporate financial management. Financial statements are analyzed for appraising the financial performance of a business. Financial analysis is mainly done using the financial ratios which are classified into five types, such as profitability ratios, liquidity ratios, leverage ratios, turnover ratios and valuation ratios. Another important financial analysis tool is break-even analysis which explains the variation in profits due to output, costs and prices. More important than historical analysis is planning about the future and here is where financial planning comes into play. Pro forma or projected financial statements are prepared by the financial planning manager to find out whether the business is directed towards achievement of long terms goals of the business.
Nowadays, financial valuation is a key issue to address in corporate financial management which was just of academic value previously. Financial valuation involves valuation of companies. It is a very complex issue to resolve. Financial valuation is significant in big transactions such as mergers and acquisitions, disinvestments, spin off etc. Techniques such as book value, price to earnings ratio, discounting cash flows etc are used to assess the value of a company . Discussed above are the most central issues of corporate financial management. The main objectives of corporate financial management are profit maximization and liquidity.

By the end of this course -assuming you have attended classes, completed the assessments and undertaken the recommended amount of independent study - you should be able to:
  • describe, explain and apply concepts relating to corporate finance management and related frameworks for analysis in a business context;
  • discuss the extent and nature of finance topics and concerns as they face business decision makers;
  • discuss issues pertinent to business from an finance perspective;
  • undertake a finance specific deep-dive analysis in the realm of business.
Literatur: Myers, A.B.: Corporate Finance, 8th Edition, McGraw Hill, 2006

Weitere Literatur finden Sie in der HdM-Bibliothek.
Internet: Eine ausführliche Beschreibung der Lehrinhalte, der Lernziele, der Struktur sowie zusätzliches Lehrmaterial (Gliederung, ergänzendes Skript, etc.) finden Sie im Online-Kurs zur Veranstaltung auf der Moodle-Plattform der HDM.

Zum Online-Kurs Corporate Finance (MBA)

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