FP056-15 Introduction to Finance
Introductory description
This module is an introduction to the basic principles of finance and students will learn how these concepts are applied to financial decision making. Students will learn how incorporated firms are structured and how they interact with financial markets and institutions to invest and to raise finance to support the growth and diversification goals of the firm. The main financial statements of firms will be used to assess financial performance and methods of evaluating investment options, their associated risks and costs will be introduced.
Module aims
To prepare students for undergraduate studies in Finance by introducing students to the core principles of finance:
- the role of finance in supporting the goals of the firm
- the business frameworks governing financial decision making
- the role of financial accounts in financial decision making
- sources of finance in the short, medium and long term
- investment appraisal and the time value of money
- the cost of capital and shareholder wealth
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
The syllabus will include the following topics:
- The role of finance in investment decision-making
- Financial Markets and Institutions
- Bond and Equity Markets
- Measuring financial performance:
- interpreting accounts
- performance ratios
- managing working capital - Investment appraisal and the time value of money
- Measuring risk and diversification
- Sources of finance
- Cost of capital
Learning outcomes
By the end of the module, students should be able to:
- Explain the core principles of finance and the frameworks governing financial decisions.
- Identify the variety of contexts in which financial decisions are made and explain the outcomes for shareholders and other stakeholders.
- Use financial modelling skills to: 1. Evaluate an investment opportunity using a variety of investment appraisal techniques and interpret the results. 2. Estimate the cost of capital for an investment opportunity.
- Compare and contrast the main sources of financing for a firm in the short, medium and long term.
- Evaluate a variety of real world financial scenarios, requiring the application of mathematics, business and economics.
Indicative reading list
Brealey, R. , Myers, S. and Marcus A. 2018 Fundamentals of Corporate Finance. 9th ed., McGraw-Hill
McLaney, F. 2014 Business Finance, Theory and Practice, 10th edn, Harlow, Pearson
Cornett, M., Adair, T., Nofsinger, J. 2018 Finance: applications and theory. 4th ed., McGraw-Hill
Mishkin, F. and Eakins, S. 2017 Financial Markets and Institutions, 9th ed., Pearson
Hillier, D., Clacher, I., Ross S., Westerfield, R., and Jordan B. 2017 Fundamentals of Corporate Finance, 3rd ed., McGraw-Hill
Interdisciplinary
Links to business, microeconomics, macroeconomics (global economy) and mathematics
International
The principles of finance are international and international financial flows are one of the drivers of globalisation. Examples will be drawn from a variety of different countries for use in analysis of financial scenarios and investment opportunities.
Subject specific skills
Application of mathematics to analyse financial performance
Application of mathematical models to evaluate investment options
Interpretation and analysis of financial data
Transferable skills
Development of a range of skills in the application of mathematics
Development of analytical and evaluative skills to improve critical thinking
Study time
| Type | Required |
|---|---|
| Lectures | (0%) |
| Seminars | 30 sessions of 1 hour (20%) |
| Online learning (independent) | 10 sessions of 3 hours (20%) |
| Private study | 58 hours (39%) |
| Assessment | 32 hours (21%) |
| Total | 150 hours |
Private study description
Set readings in preparation for lecture and seminars. Weekly set tasks and appointments with staff. Revision for summative assessments and pre-released case study.
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group A
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
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| Financial Performance Report | 50% | 16 hours | Yes (extension) |
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The focus of the first summative assessment will be an analysis and evaluation of the financial performance of a firm using a variety of resources, including financial accounts. The assessment will be a written report submitted to Tabula. |
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Reassessment component is the same |
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Assessment component |
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| Problem based learning task with pre-released case study | 50% | 16 hours | No |
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Students will be be provided with a pre-released case study that will form the basis of their second summative assessment, which will be a one hour test. |
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Reassessment component is the same |
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Feedback on assessment
Tabula, face to face meetings as required.
Courses
This module is Core for:
- Year 1 of FIOE Warwick International Foundation Programme