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MSING023 provides students with an introduction to several of the key principles, practices and analytical approaches in business finance today. This course addresses several of the key financial concerns of company senior managers, internal and external analysts and others, including but not limited to the following:
- Pricing company debt and equity instruments utilising the Capital Asset Pricing Model (CAPM), towards pursuit of an ongoing optimalised financing structure;
- Assessing the companyʼs appropriate, sustainable level of gearing (leverage) to support company growth objectives with sufficient liquidity and other reserves;
- Developing company-wide financing plans based upon sales projections, senior managementʼs growth objectives, forecasts of cash requirements and projections internal funds generation;
- Applying financial analytical judgment to project initiative and capital expenditure (CAPEX) decisions, in a systematic and consistent manner;
- Understanding risk versus reward trade-offs in financial decisions involving both internal and external (acquisitions) growth.
Accounting topics are not directly included in this course’s design. However, some prior familiarity with both (i.) the three integrated financial statements and (ii.) basic accounting principals is necessary for one to fully understand the financial issues and analysis in this course.
MSING023 Finance Course Outline 2010/11
MSING023 / Page 2
Emphasis in this course is on basic understandings in corporate finance, including but not limited to the following, which represent aims for this course:
(1.) Development of in-depth, applied understanding of the Capital Asset Pricing Model
(CAPM) and related financial asset pricing techniques and their issues, including risk free
rate, equity premium, capital structure (debt-to-equity) planning, and other issues relating to Beta (ß).
(2.) Development of understanding of principal company financial performance measurement and management including several of the more widely applied tools such as EVATM CFROI, economic profit, CVL/5D, NPV-DCF and others.
(3.) Understanding of how to develop integrated financial plans that seek to balance different (and sometimes conflicting) liquidity and performance objectives of company managers and which also take into account both near-term and longer-term funding requirements.
(4.) Company life cycle perspectives as applied to financial risk, investment and capital
(5.) Development of capital financial planning schemes which seek to achieve maximum
company worth whilst applying leverage that is appropriate to present circumstances and realistic prospective performance of the companies involved.
(6.) Examination of CAPEX (capital expenditure) alternative analysis approaches including advantages and disadvantages of each, implications for company value (using discounted cash flow techniques) and cash management.