Course Overview
Adequate financing from the most appropriate sources can often mean the difference between life and death to a small or even medium sized company. The ability to present a case to lenders or equity investors for funding is central to the acquisition or development of a business. This course begins with explanation of the basic techniques used by firms in efficiently allocating resources and raising funds to pay for those resources on as favorable terms as possible. Based on these fundamental techniques, the course then provides a framework for the basic evaluation and selection of the most appropriate financing techniques which are available to mature businesses, growth businesses and start up situations. The course will outline the essential components of successful funding presentations or requests. Beginning with clear definitions of the types of businesses one is likely to deal with (e.g. mature, fast growth or start up) the course discusses key operating factors such as cash flow, business plan and management skills in the context of available financing alternatives. Based on fundamental business analysis, the course will impart to students the fundamentals of raising funds. Various sources of funding, the manner in which they should be approached, the documentation they require, their own unique constraints, and the practicalities of combining financing alternatives are outlined within the context of various business types. Funding alternatives discussed will include effective working capital management, short and long term bank financing, vendor financing, mezzanine finance, venture capital and public market financing. This course will lay a clear framework in which students will be able to clearly identify key financing issues. At the completion of this course, participants will clearly understand the fundamentals of business financing and will have a clear understanding of the role professional advisors such as accountants, lawyers and financial players play in developing effective financing strategies.
Prerequisite(s)
Credits
5.5
- Not offered this term
- This course is not offered this term. Notify me to receive email notifications when the course opens for registration next term.
Learning Outcomes
Upon successful completion, the student will be able to:
- Develop basic operating and cash flow projections, and set financing strategies to manage growth.
- Explain the importance of cash flows as identified in the cash flow statement and understand the impact of taxes on cash flow.
- Apply financial ratios in managing and measuring business performance more effectively.
- Demonstrate how operating and financial leverage can enhance a firm’s earning profitability.
- Assess impact of a company’s short term financial management policy.
- Measure a firm’s liquidity level through analysis of its cash conversion cycle.
- Determine an optimal mix of working capital.
- Explain the term structure of interest rates and the nature of yield curves.
- Compute time value of money and apply concept to solve financial problems.
- Analyze value of financial assets: bonds and stocks using time value techniques.
- Calculate yields based on the relationship between current price and future expected cash flows.
- Analyze capital investment alternatives and undertake capital budgeting analyses.
- Apply fundamental financial techniques relating to the evaluation of capital investment decisions, financing strategies, and the cost of capital.
- Differentiate between different "life stages" of businesses as it is relevant to financing.
- Outline which types of financing are realistically available in a given situation.
- Formulate basic financing strategies for acquisitions, sales and expansion of businesses.
- Identify the types of short and long term financing available from financial institutions and measure those features which are evaluated in granting credit to corporate customers.
- Consider "vendor financing" as a component of acquisition or sale of a business.
- Identify the nature and purpose of venture capital and understand trends in financing by venture capitalists.
- Outline the process and sequence of events in the process of taking a company public.
- Analyze how combinations of equity and debt financing optimise returns and control risks.
- Outline the nature and importance of a business plan and which factors to emphasize in a plan when dealing with private and public financial sources.
Effective as of Winter 2022
Related Programs
Enterprise Finance (FMGT 4530) is offered as a part of the following programs:
- Indicates programs accepting international students.
- Indicates programs eligible for students to apply for Post-graduation Work Permit (PGWP).
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