ACCT 270 - Business Finance

3 Credit: (3 lecture, 0 lab, 0 clinical) 3 Contact Hours: [ACCT 116 ]

Introduces fundamental principles of business finance by examining the basic methods and skills used in evaluating operating performance and financial condition of businesses, with an emphasis on providing tools entrepreneurs need to successfully lead and direct their organization. Course content includes the term structure of interest rates, the relationship between risk and return, cost of capital and capital structure, net present value and the time value of money principles, capital budgeting techniques, ratio analysis, working capital management, operating and financial leverage, forecasting, and investments.
OFFERED: fall semesters

Course Goals/ Objectives/ Competencies:
Goal 1: Understand the basic economic concepts of finance as it relates to individuals and business.

Describe scarcity of resources.
Calculate opportunity cost.
Explain the relationship of risk and return and its influence on business decision making.

Goal 2: Compare and contrast the relationships of financial statements.

Construct financial statements.
Calculate free cash flow.

Goal 3: Perform ratio analysis of financial statements.

Calculate horizontal analysis.
Calculate vertical analysis.
Calculate financial ratios.

Goal 4: Apply methods for planning financial strategies.

Calculate return on investment.
Calculate break-even point.
Calculate profit potential.
Calculate various measurements of leverage.

Goal 5: Apply principles of forecasting.

Describe the three basic categories of forecasting models.
Compute Mean Absolute Deviation (MAD).
Prepare pro forma financial statements.

Goal 6: Understand the general concept of working capital management.

Describe principles of cash management.
Describe principles of accounts receivable management.
Prepare accounts receivable analysis.
Prepare inventory analysis.
Describe principles of current liability management.

Goal 7: Apply the concept of time value of money.

Calculate the future value of a lump sum.
Calculate the present value of a lump sum.
Calculate the internal rate of return.
Describe differences between ordinary annuity and annuity due.
Calculate the future and present value of an ordinary annuity.
Calculate the future and present value of an annuity due.

Goal 8: Apply principles of capital budgeting.

Identify factors affecting capital budgeting.
Determine weighted average cost of capital (WACC).
Determine net present value (NPV).
Determine internal rate of return (IRR).

Goal 9: Understand the determining factors of an organization’s capital structure.

Describe bonds and bond financing.
Describe the elements of equity financing.