FINANCIAL REPORTING AND ADVANCED CORPORATE FINANCE - 1

The course Financial reporting and Advanced Corporate Finance is one of the basic formative activities in the Course of Studies in Economics and Finance. The objective of the course (module 1 and module 2) is to give to students the fundamental principles of financial reporting and corporate finance, but also tools to apply these principles in practice. The course concerns fundamental themes of financial reporting and corporate finance, relative to investment valuation, financing and dividend decisions, mergers and acquisitions, and the analysis of the interaction between projects and of real options. The objective is to form students that will know how to apply theoretical models in reality, to provide them with the necessary tools to aspire to job positions such as the Chief Financial Officer of a company, or the financial analyst working for investment banks or consulting companies, or also the risk manager.

Attending and actively participating to classes, studying the textbook and the other suggested materials, including the real cases used during the course, will allow students to:
1. Knowledge and comprehension
• acquire advanced knowledge of fundamental models of financial reporting and corporate finance and know how to apply them in practice, to comprehend how in reality the investment, financing and dividend decisions work as well as the use of real options.

2. Ability to apply knowledge and comprehension
• master the techniques to determine firm expected cash flows and to calculate the cost of capital to discount cash flows
• identify the company optimal financial structure
• comprehend the consequences of the choices of dividend policies
• apply methods and tools acquired during the course to interpret the dynamics of corporate finance

3. Judgment ability
• critically evaluate company valuations like a financial analyst
• evaluate the sustainability of the firm financial structure and its equilibrium
• evaluate the effects of different dividend policies that the firm may choose

The main prerequisite is the basic knowledge of financial and management accounting.

Module 1

- Financial Reporting System
- Analysis of Principal Financial Statements
- Analysis of Inventories and Long-Lived Assets
- Analysis of Off-Balance-Sheet Assets and Liabilities

Modulo 2: see [EM2085-2] FINANCIAL REPORTING AND ADVANCED CORPORATE FINANCE - 2
- Measuring risk and the hurdle rate
- Measuring investment returns
- Working Capital Management
- Mergers and Acquisitions and Corporate Restructuring
- Investment interactions and real options
- Capital structure: an overview of the financing decisions
- Capital structure: model and applications, Analysis of Taxes, Analysis of Debt
- The determinants of the dividend policy: theory and practice
- Valuation and Growth

Corporate Finance: European Edition, 3rd edition, 2016. Authors: Hillier D., Ross S., Westerfield R., Jaffe J., Jordan B. ISBN: 0077173635 · 9780077173630

The exam is a written exam and lasts 60 minutes. The exam consists of multiple choice questions and essay questions.

The course in mainly organized in frontal classes. Classes combine fundamental principles of the subject with their practical application through exercises and real cases. All the material discussed in class will be available to students in Moodle.

English

written