COURSE SYLLABUS

University: Comenius University in Bratislava

Faculty: Faculty of Management
Course ID: FM.KEF/134AB/16 Course title: Introduction to Financial
Management
Educational activities:
Type of activities: lecture / seminars
Number of hours:
Per week: 2 / 2; Per level/semester: 28 / 28
Form of the course: on-site learning
Number of credits: 5
Recommended semester: 4
Educational level: I
Recommended prerequisites: The prerequisite for this class is a passing grade in foundations of accounting
and statistics and to be familiar with the basic financial concepts. Therefore, it is expected that students will be
comfortable with the following topics: basics financial concepts, basics accounting principles and basics statistical
concepts.
Course requirements:
Participation in seminars, individual student work during the semester, active monitoring of developments in
selected financial markets, continuous testing, final test.
The mid-term evaluation at the seminars consists of the following parts:
- preparation of a presentation in a team on a topic in the field of asset valuation (MAX 5%),
- elaboration of homework assignments during the semester (MAX 10%),
- participation in seminars and activity during the semester (MAX 15%),
- continuous testing during the semester – Mid-term testing (MAX 20%).
Final evaluation:
- final written test (MAX 50%).
The condition for completing the course is to obtain at least 60% of the total evaluation. The condition for
completing the seminars is to obtain at least 25% of the evaluation seminars.
Scale of assessment (mid-term evaluation / final written test): 50% / 50%
Learning outcomes:
This is an introductory course in financial management and in corporate finance. The course has three main
objectives:
1) Develop an understanding of the tools that are used to analyze firm’s financial statements, bonds value and
basics evaluating methods for valuing firms.
2) Understand the basic issues involved in how to use concepts of present value and future value in finance and
how to use concepts of the risk and return.
3). Understand the basic issues involved in how the financial markets are working.
Emphasis will be placed on appreciating the limitations and challenges that are faced when applying the theoretical
framework of corporate finance to real world problems.
Class Syllabus:
Ch 1 - Introduction to financial management: financial markets, investments, financial products and financial
instruments, value management of a business, financial manager in organizational structure of a company,
categories of financial markets, attributes of financial markets, financial institutions, transfer of capital, organized
stock exchange, OTC-markets, price of money, interests, yield curve, factors influencing demand and supply of
money.
Ch 2 – Financial statements: ratio indicators, indicators of liquidity, liability, turnover, profitability, market value,
analysis of cash flows, comparative analysis and trend analysis, some problems of financial statements analysis,
Altman model, Taffler model, economic added value.
Ch 3 - Analysis of financial statements: Liquidity ratios, Asset management ratios, Profitability ratios, Market
value ratios, Trend analysis, Du Pont system, Horizontal and Vertical financial analysis, Benchmarking.
Ch 4 - Time value of money: future value, present value, annuity, perpetuity, effective annual rate (EAR), short
time periods, continuous interest, continuous discount.
Ch 5 - Bonds, Bond Valuation, and Interest Rates: general pricing model, types and basic attributes of securities,
present value of bond, yield to maturity (YTM), yield to call (YTC), interest and reinvestment risk of bonds, bond
duration.
Ch 6 - Risk and return: financial assets and their risks, desired yield, expected yield, realized yield, measurement
of isolated risk, portfolio ‘s risk, diversification and volatility of investment portfolios, diversified and non-
diversified risk, beta coefficient, security market line (SML), effective set, indifferent curves, optimal portfolio,
capital asset pricing model (CAPM), capital market line (CML), arbitrage pricing theory (APT), hypothesis of
effective markets.
Ch 7 - Stocks, Stock Valuation: intrinsic value of a share of stock, present value of the stream of dividends,
expected rate of return on a constant growth stock, supernormal growth stock, horizon (terminal) value, value of a
share of perpetual preferred stock, Efficient Markets Hypothesis (EMH), Equilibrium.
Ch 8 - Financial Options: Financial options, call options, strike price, put options, exercise value, Black-Scholes
option pricing model (OPM), put-call parity relationship.
Ch 9 – Cost of Capital: Weighted average cost of capital (WACC), component cost of debt, marginal costs of
capital, cost of common equity, CAPM approach, DCF approach, risk-free rate, various factors affect a firm´s cost
of capital, market or Beta risk, risk-adjusted cost of capital.
Ch 10 - Evaluation of Capital Investments: project’s classification, methods of project’s evaluation, maturity of
projects, Net present value of project (NPV), Internal rate of return of project (IRR), Profitability index of project,
Modified IRR of project (MIRR), present value of future costs, project’s financing.
Ch 11 – Cash Flow Estimation and Risk Analysis: Stand-alone risk, Sensitivity analysis, scenario analysis,
Monte Carlo simulation, risk-adjusted discount rate or project cost of capital, growth option, staged decision-tree
analysis.
Ch 12 – Financial Planning and Forecasting Financial Statements: Forecasted financial statements (FFS)
method, Additional funds needed (AFN) equation, sales growth rate, economies of scale.
Recommended literature:
1. Brigham, E. F. – Ehrhardt, M. C.: Financial Management, 14th Edition, Thomson, South- Western, 2014. ISBN-
13: 978-1-111-97221-9.
2. Brealey, R. A. – Myers, S. C. – Allen, F.: Principles of Corporate Finance, 9th Edition, McGrawHill, 2010.
ISBN: 978-007-126327-6.
3. Smoleň J. - Komorník J.: Finančný manažment, Univerzita Komenského v Bratislave. 2019. ISBN: 978-80-223-
4594-1.
4. Other information sources: www.bloomberg.com, www.yahoo.finance.com, www.morningstar.com, www.
gurufocus.com

Languages necessary to complete the course: English

Notes:
Textbook (recommended literature 1.) is available at the FMUK Library. This textbook should be used as main
reading. The main textbook is also available for purchase online at Amazon.com. The relevant chapters are
indicated in the class syllabus. There will be several case studies for the course provided in MS Excel form. They
will be available for download from faculty’s MS Teams cloud solution. The cases are intended to help students
understand the course material and prepare them for the exam and especially for the real world of finance. The
solutions for the case study will be discussed in class.
During the class we will use Bloomberg Professional Terminal as source of financial data and financial news.
Pas grade distribution:
Total number of evaluated students: 1 090

A B C D E FX
19,91 24,5 18,26 15,78 14,22 7,34

Lecturers:
Mgr. Martin Vozar, PhD.
Last change: 14.2.2023
Approved by: