Finance 317 at the University of Calgary, titled “Corporate Finance I,” serves as a foundational course for students pursuing careers in finance, accounting, and related fields. This course provides an in-depth introduction to the core principles of corporate finance, equipping students with the analytical skills necessary to make informed financial decisions within an organization.
The curriculum typically begins with a review of financial accounting concepts, ensuring students possess a solid understanding of financial statements like the balance sheet, income statement, and statement of cash flows. This review is crucial as these statements serve as the basis for many financial analyses performed throughout the course. From there, the course delves into the time value of money, a cornerstone of financial decision-making. Students learn to calculate present and future values, annuities, and perpetuities, understanding how these concepts apply to investment valuation and capital budgeting.
A significant portion of Finance 317 is dedicated to capital budgeting techniques. Students explore various methods for evaluating investment projects, including net present value (NPV), internal rate of return (IRR), payback period, and profitability index. They learn to critically assess the advantages and disadvantages of each method, considering factors such as project risk, cash flow estimation, and mutually exclusive projects. The course emphasizes the importance of selecting projects that maximize shareholder wealth.
Risk and return are also central themes in Finance 317. Students are introduced to the Capital Asset Pricing Model (CAPM), a widely used model for determining the expected return on an asset based on its systematic risk (beta). They learn how to calculate beta, interpret its significance, and apply the CAPM in investment analysis. The course also covers portfolio theory, teaching students how to construct diversified portfolios to reduce risk without sacrificing returns. Understanding the relationship between risk and return is essential for making sound investment decisions.
Furthermore, Finance 317 typically explores working capital management, which involves managing a company’s short-term assets and liabilities. Students learn about strategies for managing cash, accounts receivable, and inventory, understanding the importance of maintaining sufficient liquidity while minimizing costs. The course may also touch upon short-term financing options available to companies.
Assessment in Finance 317 usually includes a combination of assignments, quizzes, midterm exams, and a final exam. Assignments often involve applying the concepts learned in class to real-world case studies, requiring students to analyze financial data and make recommendations. The exams test students’ understanding of the theoretical concepts and their ability to solve quantitative problems. Successful completion of Finance 317 provides students with a strong foundation for further study in advanced finance courses and prepares them for internships and entry-level positions in the financial industry.