Principles of Managerial Finance

Discipline: Semester at Sea Seminars
Instructor: Roberts
Credits: 3
Day: B
Start: 1300
End: 1415
Field Work: Day 1 - Thursday, 15 October | Spain Download Syllabus

This course introduces students to concepts that financial managers use to answer three broad types of questions.

  1. What long-term investments should the firm take on? That is, what lines of business should it be in, and what sorts of buildings, machinery, and equipment should it acquire? This relates to capital budgeting decisions.
  2. How will the firm manage its everyday financial activities, such as collecting from customers, paying suppliers, and having enough inventory to meet customer demand? This relates to managing working capital.
  3. How will the firm get long-term financing to pay for its investments and grow? This relates to financing decisions.

We will explore each set of questions by first introducing the student to basic definitions, concepts, and tools that are essential in understanding the problems that business firms face. In particular, we will discuss the importance of financial statements, time value of money, discounted cash flows, taxes and foreign exchange rates. We then introduce the student to the concept of net present value to aid in the capital budgeting decision. Next, we focus on working capital management by exploring issues related to cash management, inventory management, and extending credit and collecting receivables. Finally, we discuss topics related to long-term financing and the firm’s capital structure. Various techniques are used in the course including: lecture, discussion, in-class group work, homework, and cases. Problems and examples will be selected to take advantage of the countries we visit on the voyage. Active student participation is required.

Field Work

Country: Spain
Day: 1 - Thursday, 15 October

This field lab will consist of three parts. First, we will tour the Valencia Stock Exchange, which is the newest stock exchange in Spain and the one that has grown the most in the last few years. Students will use this as an opportunity to connect what we have learned in class about the stock market with a real life example. Students are encouraged, to put on their “bucket list” a visit to one of the stock exchanges in the U.S. and compare experiences. At the end of the tour, students (in teams) are required to note the prices of stocks from a list of companies provided by the instructor. Second, students will visit Valencia neighborhoods and participate in a competitive business scavenger hunt. Here, teams of students must locate the business or products/services that the companies from the stock exchange list are involved with. The objective is for students to become acquainted with Spanish businesses, products, and services that are part of the daily lives of the people who live in Spain. It will also be a good opportunity to get some practice interacting with the people of Valencia. At the end of the day, we will meet to discuss how your observations may impact the stock prices on your list. Academic objectives:

  1. To connect what students have learned in class about the stock market with a real-life example.
  2. For students to become acquainted with Spanish businesses, products, and services.