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Course Information

About this Course

The main objective of this course is to provide students with a broad, practical perspective to work on financial statement analysis to determine i) a reasonable assessment of the financial condition of the firm, ii) what may be reasonable forecast of its future position, iii) whether the firm is worthy of credit ; and iv) the operation characteristics of the firm. Attention is focused on capital investment analysis, cost of capital, valuations of assets, and current financial issues in the hospitality industry.

Course Syllabus

An overview of financial environment
1.1 The financial environment
1.1.1 Forms of business
1.1.2 Jobs in finance
1.1.3 Business ethics
1.1.4 Mergers and acquisitions
1.1.5 Agency relationship
1.2 Understanding financial statements
1.2.1 Income statements
1.2.2 Balance sheet
1.2.3 Cash flow statements
1.2.4 Users of financial statements

Financial analysis
2.1 Uses of financial analysis
2.2 Interpreting financial ratios
2.3 Inflation and financial statement analysis
2.4 Leverage and the income statement
2.5 Operating leverage and financial leverage
2.6 Financial forecasting
2.7 Budgeting
2.8 Funds flow analysis

Determinants of valuation
3.1 Time value of money (TVM)
3.1.1 Compounding and discounting
3.1.2 Annuity
3.1.3 Uneven cash flows
3.1.4 TVM interest factors Lookup Tables
3.1.5 Determinants of discounting and compounding rates.
3.2 Valuation of assets
3.3 Valuation of bonds
3.4 Valuation of preferred stock and common stock
3.5 Mortgages
3.5.1 Amortized loans
3.5.2 Constructing amortization schedules
3.5.3 Analysis of mortgages: interest rates and cost of capitals

The capital investment decision
4.1 Capital budgeting: Methods and Analysis used in the hospitality industry
4.1.1 Average rate of return (ARR)
4.1.2 Payback period
4.1.3 Net present value (NPV)
4.1.4 Internal rate of return (IRR)
4.1.5 Modified internal rate of return (MIRR)

Risk and return
5.1 Types of investors
5.2 Types of risks
5.3 Measurement of risks
5.4 Types of returns
5.5 Measurement of returns
5.6 Portfolio risks and returns

Capital structure
6.1 Financial leverage
6.2 Cost of capital and its relationship to capital structure
6.3 Determining an optimal capital structure

Sources of intermediate and long-term funds
7.1 Term loans and repayment provisions
7.2 Leasing and determining the lease payments
7.3 Long-term debt
7.4 Preferred stock and common stock
7.5 Securities and warrants

The management of working capital
8.1 Importance of working capital
8.2 Marketable securities
8.3 The management of accounts receivable
8.4 Inventory management
8.5 Short-term funds

Frequently Asked Questions

Q1 : Is there any pre-requirement to enroll this subject?
A1 : No