Course outline Fundamental Analysis by mikeholy

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									                              Essentials of Finance for Engineers
                                                                                                                 Study material
MODULE         Topics/subtopics                             Objective                         Methodology            used
Module I       Financial Statements
           1.1 Understanding Financial statements
               Balance sheet                                                                 Lecture/discussio
                                                               To understand financial                              Financial
               Income statement/Profit and Loss Statement                                    n/ caculation on
                                                              statements and be able to                        statements of Tata
               Fund Flow Statement                                                             worksheet in
                                                            interpret the figures in details                         Motors
               Cash Flow Statement                                                                 class
               Financial functions
           1.2 Financial and Profit Analysis
               Liquidity ratios                              To calculate financial ratios
                                                                                                                   Worksheet ,
               Leverage ratios                                and intepret them. Using
                                                                                               Calculation on        Financial
               Activity ratios                                industry benchmark one
                                                                                               the worksheet    statements of Tata
               Profitability ratios                          should be able to asses the
                                                                                                                      Motors
               Utility of ratio analysis                                 firm
Module 2       Valuation I
               Time value of money
               Compounding                                                                                          Tables for
                                                             Calculation of time value of     Lecture/problem
               Discounting                                                                                       calculating time
                                                                    money, IRR                    solving
               Present value of cash flow                                                                             value
               Future value of money
               Calculation of rate of return
               Internal rate of return (IRR)
Module 3       Capital budgeting decisions
               Investment decisions
               NPV Vs IRR                                     To prepare capital budget        Case Method      Cases / Worksheet
               Discounted payback period
               Modified internal rate of return (MIRR)
               Profitability Index
Module 4       Beta estimation
               Beta: Introduction                                                                                Data from NSE/
                                                             To calculate beta of a stock     Problem solving
               Estimation method                                                                                   Worksheet
               Determinants of Beta
Module 5       Cost of equity
               Risk free rate
                                                             To calculate cost of equity       Case method            Cases
               CAPM : Introduction
               Calculation of cost of equity
Module 6       Cost of capital
                                                                                                  Problem
               Components of capital                        To calculate cost of capital of
                                                                                                solving/case    Cases/ Worksheet
               Cost of debt                                             a firm
                                                                                                  method
               Cost of equity (Revision)
               Weighted average cost of capital (WACC)
Module 7       Leverage
                                                             To calculate different types         Problem
               Capital structure: Introduction
                                                             leverage of a firm and their       solving/case    Cases / Worksheet
               Financial leverage
                                                               use for capital structure          method
               Operating leverage
               Combined leverage
Module 8       Capital structure: Theory and policy
               Net Income based view                          To understand theory for
                                                                                                  Lecture           Fact sheet
               MM Hypothesis                                  capital structure of a firm
               Trade-off theory
               Pecking order theory
Module 9       Working Capital Management                    To understand, calculate and
               Working capital: Introduction                intrepret operating cycle, cash Lecture / Problem
                                                                                                                   Worksheet
               Operating cycle                                conversion cycle. Calculate        Solving
               Cash conversion cycle                         and manage working capital.
               Calculation of working capital
                 Cash Management
                 Inventory Management
Module 10        Capital markets in India
                 Introduction                                       To provide overview of           Lecture /
                                                                                                                       Fact sheet
                 Regulatory bodies                                  capital market in india         discussion
                 Investment bank
                 Other intermediries
Module 11        Stock market
                                                                  To calculate market index,
                 Stock market index (NIFTY,SENSEX)                                            Lecture/ Problem         Fact sheet
                                                                 impact cost, and incorporate
                 Market base                                                                      solving             /Worksheet
                                                                   changes in market base
                 Change in market base
                 Security selection for index
                 Impact cost
                 Calculation of index
                 Adjustment in market base due to new security
Module 12        Raising equity capital
            12.1 Authorised capital                                                                                     Financial
                                                                 Understanding different value       Lecture /
                 subscribed capital                                                                                statements of Tata
                                                                          of a stock                discussion
                 Paid up capital                                                                                         Motors
                 Ordinary shares
                 Preference shares
                 Book value of share
                 Face value of share
                 Market value of share
            12.2 Initial Public Offering (IPO)
                                                                  To understand IPO process          lecture /     Prospectus of IPO
                 Allocation of shares
                                                                       and its pricing              Discussion     (Reliance power)
                 Pricing IPO
            12.3 Right issue
                                                                                                     lecture /      Financial news
                 Bonus shares                                       To understand different
                                                                                                    Discussion          items
                 Stock split                                         treatments of stocks
                 Reverse stock split
Module 13        Raising debt capital                                                                lecture /
                                                                                                                       Fact sheet
                 Bonds                                                                              discussion
                                                                 Overview of bonds, debenture
                 Debentures
                 Warrants
                 Convertible debentures/bonds
Module 14        Valuation II                                                                    Lecture/problem      fact sheet/
                                                                 valuation methods for bonds
                 Valution of bonds                                                                   solving          worksheet
                                                                          and shares
                 Valuation of shares
Module 15        Dividend theory
                 Dividend policy                                                                     Lecture /
                                                                                                                       Fact sheet
                 Walter's model                                  Overview of dividend policy        discussion
                 Gordon's model
Module 16        Mutual Fund                                                                     Lecture / problem worksheet / data
                                                                  Overview of Mutual fund,
                 Introduction                                                                         solving       form HDFC
                                                                      NAV calculation
                 NAV calculation
                 Calculation of return
Module 17        Security analysis                                                                                 Financial
                 Technical analysis                              Overview of fundamental and                     statements of
                                                                                                Lecture /Cases
                 Fundamental analysis                                 technical analysis                        TATA Motors/
Module 18        Portfolio management                                                          Lecture method / Data from NSE/
                                                                 Understanding risk and return
                 Risk and Return                                                               problem solving    Worksheet
Module 19        Financial derivatives                             Understanding financial        Lecture /
                                                                                                                  Worksheet
                 Forward                                            derivative instruments       Discussion
                 Future
                 Option
Module 20        Trading strategies using derivatives               Understanding trading            Lecture/
                                                                                                                      Worksheet
                                                                         strategies                 discussion

								
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