Principles of Finance and Financial Statement Analysis

2022/2023

Content, progress and pedagogy of the module

This module provides an introduction to the fundamentals of entrepreneurial finance and explains the essentials of financial accounting and financial statement analysis. The course is designed for students who are learning finance for the first time. The foundational concepts covered in this course will include: Time value of money, project evaluation, business valuation principles, risk fundamentals, and cost of capital. During the module students will learn how to choose among projects, basics of risk management, how to understand financial structures, will learn about the purpose and challenges of performing a valuation. Finance theories, tools and techniques covered in the course can be utilized in any management decision-making process in any business sector.

Part two of the module will be dedicated to financial accounting and financial statements analysis. Students will learn how to read, interpret and analyse financial statements using an IT tool in order to make informed business decisions regarding investment, credit, or resource allocation. The students will learn how to understand financial statements, how to monitor sales, inventories, liabilities and cash flows and how to make judgements about company’s profitability, liquidity and solvency in order to determine where the company currently stands and whether it is attractive for potential investors. The accounting part in this Module is essential for any entrepreneur as this knowledge is crucial for the long-term success of each business activity.

Learning objectives

Knowledge

The objective is that the student after the module possesses the necessary knowledge on:

  • main foundational concepts in finance, such as Time value of money, business valuation, risk fundamentals, and cost of capital.
  • the factors that go into a firm’s most critical decision-making and the impact of financial structure on firm value.
  • how to interpret and use accounting information (both financial and non-financial information) in order to define the bases for forecasts and the essentials of financial statement analysis.

Skills

The objective is that the student after the module possesses the necessary skills in:

  • determining present and future values of cash flows, project evaluation and deciding among alternatives, basic risk management and decision-making affecting capital structure of a firm.
  • calculating and commenting economic and financial margins and ratios deriving from data contained in financial statements using an IT tool.
  • reading and interpreting financial statements, and assessing a firm's financial health and market position.

Competences

The objective is that the student after the module possesses the necessary competences in:

  • applying logical thinking and critical approach when analysing financing and strategic corporate decisions.
  • financial accounting and financial statement analysis essential for establishing long-term business strategies.
  • helping users of financial statements broadly understand a business and provide a context to financial numbers.

Type of instruction

For information see § 17.

Exam

Exams

Name of examPrinciples of Finance and Financial Statement Analysis
Type of exam
Written exam
Individual examination.
ECTS5
Assessment7-point grading scale
Type of gradingInternal examination
Criteria of assessmentThe criteria of assessment are stated in the Examination Policies and Procedures

Facts about the module

Danish titlePrincipper for finansiering og regnskabsanalyse
Module codeKATEI20228
Module typeCourse
Duration1 semester
SemesterSpring
ECTS5
Language of instructionEnglish
Location of the lectureCampus Aalborg
Responsible for the module

Organisation

Study BoardStudy Board of Economics and Business Administration
DepartmentAAU Business School
FacultyFaculty of Social Sciences and Humanities