Content, progress and pedagogy of the module

This module provides an introduction to the fundamentals of entrepreneurial finance. Moreover, the module also explains the essentials of financial accounting and financial statement analysis in a separate part. The course is designed for students who are learning finance for the first time. The module consists of two parts: Part I and Part II.

Part I of the module covers fundamental financial concepts such as the 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, the basics of risk management, how to understand financial structures, and the relevant and available sources of finance, especially for entrepreneurs and small firms. The students will understand 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 firm, independent of whether it is a small or a large firm, whether it is a start-up or an established firm.

Part II of the module will be dedicated to financial accounting and financial statement analysis. Students will learn how to read, interpret, and analyze financial statements to make informed business decisions regarding investment, credit, or resource allocation. The students will learn how to understand financial statements and how to monitor sales, inventories, liabilities, and cash flows. They will gain knowledge on how to make judgments about a company’s profitability, liquidity, and solvency in order to determine where the company currently stands and whether it is attractive to potential investors. The financial accounting part in this Module is essential for any entrepreneur as this knowledge is crucial for the long-term success of all business activities in a firm.

Learning objectives

Knowledge

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

• main fundamental concepts in finance, such as the 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.
• the relevant sources of finance for companies, according to their size (SMEs, large firms), life cycle stage (start-ups, mature firms), and industry.
• 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 the capital structure of a firm.
• Conducting and presenting relevant financial statements to different types of financiers (e.g., banks, venture capital firms, and business angels).
• calculating and commenting on economic and financial margins and ratios derived from data contained in financial statements.
• 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 competencies in:

• applying logical thinking and a critical approach when analyzing financing and strategic corporate decisions.
• providing the relevant financial and accounting projections for start-ups and small firms.
• financial accounting and financial statement analysis that are 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