Course detail

Financial Management of Small Company

FP-BFMSEAcad. year: 2022/2023

The course content is basic issues of financial management, such as the time value of money, investment decision-making issues, procuring funding and financial planning.

 

Language of instruction

English

Number of ECTS credits

6

Mode of study

Not applicable.

Guarantor

doc. Ing. Michal Karas, Ph.D.

Department

Institute of Finances (ÚF)

Offered to foreign students

Of all faculties

Learning outcomes of the course unit

Knowledge: The student knows the principles and methods of compiling of the financial plan, both in the form of short-term financial plans and in the form of the outlook or long-term financial plan. They are aware of different possibilities of financing the enterprise and their specific features. Moreover, they can identify those forms suitable for the small enterprise. They know the method of working capital management and methods of assuring the solvency of business.
Skills: The student is able to create a financial plan for the stage of starting or developing their own business, and moreover is able to evaluate and identify the risks connected to the solvency of the enterprise. The student is capable of evaluating various investment opportunities.
Abilities: The student can create the financial plan in different variants especially for different scenarios of expected future development. What is more, they can implement measures for stabilising or enhancing the cash flow so assuring and maintaining the solvency of the business. They will be able to weigh up the advantages of various investment opportunities, judge the possibilities for their financing and evaluate their future impact.

Prerequisites

Knowledge and understanding of the content of financial statements, a knowledge of basic corporate-economics terms and a knowledge of mathematical functions.

Co-requisites

Not applicable.

Planned learning activities and teaching methods

The course involves lectures that explain the basic principles, problems and methodology of the discipline, and seminars that promote the practical knowledge of the subject presented in the lectures.

Assesment methods and criteria linked to learning outcomes

There are three conditions for passing the final exam:

1.Attending the lectures and seminars and be prepared in advance for the seminars 

2. Preparing and submitting an original seminar work in an acceptable quality*

  • The weight of the seminar work on overall evaluation of the subject is 70 per cent, while the submitted seminar work is acceptable only if its evaluation is at least 50 per cent.
  • In case of evaluation lower than 50 per cent, the work can be redone and resubmitted within 5 business days after receiving the evaluation.
  • The seminar work evaluation is based on the fulfilling the given main requirements (see e-learning).
  • The seminar work could be prepared in a team of up to three students. In such case, the team members are equally responsible for the quality of the work, i.e. they share the same assessment of the submitted work.
  • A one-student-group is also possible. In case of more than one-member groups, the contribution of each member should be clearly stated.
  • All students are required to select a group in the system. 


Each team has to have its own original idea about the product/service with will be subject of the intended business which will be further descripted in course of the seminar work.


3) Passing a written test, which will include several theoretical questions (which are listed in a separate file available in the e-learning, see “Preparing for exam – the list of questions“). The minimum passing mark of the test is 50 per cent.

Course curriculum

• Introduction to financial management. Time value of money
• Financial statements and setting up cash flow
• Determining of business needs and sources of financing
• Investment decisions
• Setting up financial plan
• Evaluation of the enterprise’s results

Work placements

Not applicable.

Aims

The aim of the course is to introduce students to the basics of corporate financial management, such procuring funding, deciding on investments, working capital management and financial planning, all with a special focus on small enterprises.

Specification of controlled education, way of implementation and compensation for absences

Attending the lectures and seminars and be prepared in advance for the seminars. Missing at maximum of two lectures or seminars is allowed*. Being unprepared for the seminars seminars is also considered as missing the lecture or seminar.

*Fulfilling additional task will be required instead (theoretical topic presentation, or compiling financial plan based on given information etc.).

Recommended optional programme components

Not applicable.

Prerequisites and corequisites

Not applicable.

Basic literature

BREALEY, R. A., MYERS, S. C., ALLEN, F. Principles of Corporate Finance. 11 Ed. McGraw Hill. 2014. ISBN 978-0078034763 (EN)
BROOKS, R. M. Financial management: Core concepts.1 ed. Prentice Hall. 2010. ISBN 978-0-321-60939-7 (EN)
ATRILL, P. Financial management for Non-specialists. 3 ed. Prentice Hall. 2003. ISBN 0-273-65749-6 (EN)

Recommended reading

DAMODARAN, A. Applied corporate finance. 3rd Edition. John Wiley&Sons, 2011. ISBN 978-0-470-38464-0. (EN)
DOUGLAS, R., E., FINNERTY, J., D. & J. D.STOWE. Corporate financial management. 3rd Edition. Pearson Prentice Hall, 2007. ISBN 0-13-227872-3. (EN)

eLearning

eLearning: currently opened course

Classification of course in study plans

  • Programme BAK-Z Bachelor's

    branch BAK-Z , 1. year of study, summer semester, elective

  • Programme BAK-E Bachelor's

    branch BAK-ESBD , 1. year of study, summer semester, compulsory

  • Programme BAK-ESBD Bachelor's, 1. year of study, summer semester, compulsory

Type of course unit

 

Lecture

26 hours, compulsory

Teacher / Lecturer

doc. Ing. Michal Karas, Ph.D.

Syllabus

 

Subject structure (lecture/seminar):

1.Introduction to financial management / Founding budget

2.Time value of the money / Compounding, PV/FV of annuity,…

3.Financial statements and cash flow / Preparing the cash flow statement

4.Capital budgeting / Capital budgeting and application of the methods

5.Working capital management / Inventories and receivables management

6.Financing business part 1 - long-term sources of financing business

7.Financing business part 2 - short-term sources of financing business

8.Financial plan – short-term horizon / Financial plan – short-term horizon

9.Financial plan – short-term horizon / Financial plan – short-term horizon

10.Spefic forms of financing the business / Lease vs. loan financing dilemma

11.Financial analysis part 1 / Ratio analysis ( liquidity, solvency and profitability ratios)

12.Financial analysis part 1 / Ratio analysis (asset management ratios) + bankruptcy prediction models

13. test

Exercise

13 hours, compulsory

Teacher / Lecturer

doc. Ing. Michal Karas, Ph.D.

eLearning

eLearning: currently opened course