49098 Applied Financial Management

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2025 is available in the Archives.

Subject level:

Postgraduate

Description

The subject develops an understanding of the core principles of finance and their applications to financial decision making. Students examine the use of financial statements in assessing a firm's financial health, its strengths, weaknesses, recent performance and future prospects. This subject develops students' abilities to conduct corporate valuation for investment purposes. Students assume the role of managers and learn the mechanics of various ways of financing and market valuation by performing industry and financial analysis, identifying accounting deficiencies, forecasting financial statements, and ultimately valuing companies. Students apply different techniques to value various financial assets including loans, bonds, shares and projects.

Subject learning objectives (SLOs)

Course intended learning outcomes (CILOs)

This subject also contributes specifically to the development of the following Course Intended Learning Outcomes (CILOs):

• Socially Responsible: FEIT graduates identify, engage, and influence stakeholders, and apply expert judgment establishing and managing constraints, conflicts and uncertainties within a hazards and risk framework to define system requirements and interactivity. (B.1)
• Design Oriented: FEIT graduates apply problem solving, design thinking and decision-making methodologies in new contexts or to novel problems, to explore, test, analyse and synthesise complex ideas, theories or concepts. (C.1)
• Technically Proficient: FEIT graduates apply theoretical, conceptual, software and physical tools and advanced discipline knowledge to research, evaluate and predict future performance of systems characterised by complexity. (D.1)
• Reflective: FEIT graduates critically self-review their own and others' performance with a high level of responsibility to improve and practice competently for the benefit of professional practice and society. (F.1)

Contribution to the development of graduate attributes

Engineers Australia Stage 1 Competencies

Students enrolled in the Master of Professional Engineering should note that this subject contributes to the development of the following Engineers Australia Stage 1 competencies:

• 1.5. Knowledge of engineering design practice and contextual factors impacting the engineering discipline.
• 1.6. Understanding of the scope, principles, norms, accountabilities and bounds of sustainable engineering practice in the specific discipline.
• 2.2. Fluent application of engineering techniques, tools and resources.
• 2.3. Application of systematic engineering synthesis and design processes.
• 3.3. Creative, innovative and pro-active demeanour.
• 3.5. Orderly management of self, and professional conduct.

Teaching and learning strategies

The subject is taught through a combination of in-class (face-to-face) activities and online learning activities. Online learning activities include practice activities such as online problem sets as well as readings and media watching in preparation for in-class activities. The format of the subject will be a weekly 3-hour class which contains both lecture and workshop/tutorial components. Lectures are used to reinforce and develop key theoretical and practical concepts as well as providing students with the opportunity to work together to solve weekly case studies and recommend the optimum financing/ investment decisions. Lectures are interactive and may contain written, audio and visual content. The collaborative approach enables opportunity for feedback. The tutorial/workshop segment is designed to provide active learning experiences for students where they can discuss their pre-work and problem-solving strategies. In addition, there is an emphasis on self-directed learning through project-based work.

This subject is delivered in three modules. The idea behind modules is to link all topics together in a logical sequence. From a managerial perspective, we need to understand the state of the economy, which industry we operate in and the financial health of our firm. This is the first module ‘analysis’ which applies the top-down approach by analysing the economy, industry then firm by analysing financial statements. After understating the performance of the firm, we need to analyse the source of financing. Module two ‘financing’ is related to various tools of financing any project including, loans, bonds, preference shares and ordinary shares. Finally, any firm needs to grow or replace depreciated or obsolete machines so the last module ‘valuation’ is to evaluate the feasibility of expansion or replacement projects by estimating free cash flows, determining appropriate cost of capital, applying capital budgeting techniques and identifying value creation drivers.

Out of class activities: This subject requires students to actively engage in learning independently by utilizing the available course material in order to develop mastery of key financial concepts required to develop strategic solutions in a financial analysis and valuation. Students are expected to read and attempt both the problems and the case studies before attending each class in order to actively participate in the discussion. In particular, for case studies students have to discuss their answers in small groups and then submit the group-preferred answer using audience response systems before the class leader provides the solutions and feedback. Lecture slides, practice questions and case studies are available to students via Canvas on a weekly basis.

In-class activities: The 3-hour collaborative seminar consists of a review of online core materials (pre-work is essential), topic presentations and interactive sessions comprising a mixture of discussions, workshop activities, case studies and informal student presentations. The weekly seminar starts with a short lecture explaining the major concepts using business scenarios to link theoretical concepts to practical application. Lecturer collects questions from the discussion forum prior to each class and discusses them with students during the class. Students may have an opportunity to raise further issues at the start of the class. Then interactive online questions will be answered by students using Kahoot -which is a game-based platform- to test students’ understanding. This is followed by a group work by analysing short problems and real-world case studies related to lecture material. This may include a class discussion with the class leader acting as a facilitator to stimulate active learning through student interaction and peer discussion.

SPARKPLUS: Students are required to create and record a presentation of their analysis and findings. Each group will peer review and provide constructive feedback on 2 presentations. Peer assessment is to be submitted by each group member using the Self & Peer Review Resource Kit (SPARK) accessible via UTS Online. Using the SPARK toolkit each student will answer a series of questions for each group member (including themselves) to rank performance in the presentation.

Online Problem Sets: Each week, students are provided with online practice problem sets via Canvas to test their understanding of the subject material. These problem sets include a detailed explanation of each answer and thus provide students with immediate feedback. Similar problem sets are also used for assessment, with the solutions and feedback released only after the submission deadline.

Discussion Board: This is a web-based resource that can be accessed via the Canvas course page. The discussion board is a forum that gives students the opportunity to interact with their peers as well as with teaching staff. Students are able to post questions and comments about the course material. A member of staff will moderate the Forum and will answer students’ questions when appropriate.

Canvas: It is a web-based tool used at UTS to provide online learning to students. Canvas is accessible by most web browsers and provided you have access to an internet connection you can access Canvas anywhere. In the course page, you will be able to:

• Download course material (e.g. lecture notes, practice questions, case studies, etc.);
• Access the Online Problem Sets;
• Interact with peers and teaching staff (via Discussion Board);
• Keep up to date (via Announcements).

It is expected that students browse the Canvas page of the subject on a regular basis (at least twice a week).

Content (topics)

• Prepare and analyse financial statements using trend analysis, common size analysis and ratio analysis.
• Construct loan amortization schedule.
• Analyse various source of financing and compute the optimum capital structure.
• Calculate and forecast project cash flows for expansion and replacement investments
• Determine the feasibility of the project using NPV, EAA, IRR, MIRR, PI, PBP, and DPBP.

Assessment

Assessment task 1: Online Problem Sets

Assessment task 2: Group Assignment

Assessment task 3: Online Video Presentation

Assessment task 4: Peer Review

Minimum requirements

In order to pass the subject, a student must achieve an overall mark of 50% or more.

Required texts

All detailed PowerPoint slides, practice questions and reading material will be provided on Canvas in pdf format.

Recommended texts

The following texts are recommended:

Keown, A.J., Martin, J.D. & Petty, J.W. 2017, Foundations of Finance, 9th Edition, Pearson Prentice Hall, Boston

Damodaran, A. 2014, Applied Corporate Finance, 4th Edition, Wiley.

Armanious, A. 2011, Anatomy of the 1929 and 2008 Financial Crisis, Lambert Academic Publishing.

Ross, S., Christensen, M., Drew, M, & Bianchi, R. 2016, Fundamentals of corporate finance, 11th Edition, McGraw-Hill.

Damodaran, A. 2006, Damodaran on Valuation: Security Analysis for Investment and Corporate Finance 2nd Edition, 2nd Edition, Wiley.

Cornwall, J., Vang, D. & Hartman, J. 2016, Entrepreneurial Financial Management: An Applied Approach, 4th Edition, Routledge

Weigand, R. 2014, Applied Equity Analysis and Portfolio Management, 1st Edition, Wiley.

Brealey, RA, Myers, SC & Allen, F. 2014, Principles of corporate finance, 11th Edition, McGraw Hill, Sydney.

Berk, J., DeMazo, P., Harford, J. Ford, G. & Finch, N. 2011, Fundamentals of Corporate Finance, Pearson, Australia

Gitman, L, Juchau, R & Flanagan, J 2011, Principles of Managerial Finance, 6th Edition, Pearson Addison Wesley.