CFA Level 1 - Corporate Finance

Capital Budgeting, Cost of Capital, Measurement of Leverages, Working Capital Management, Cash and Treasury Mangement

What you'll learn
Cost of Capital
Cost of Redeemable and Irredeemable Debts
Cost of Zero Coupon Bonds using IRR method
Cost of Ammortised Bonds using IRR Method
Methods to Calculate cost of Equity
Gordon's Growth Model
Capital Asset Pricing Model (CAPM)
Cost of Preference Shares
Weighted average cost of Capital
Marginal Cost of Capital
What is Leverage ?
Operating Leverage, Financial Leverage and Combined Leverage
Break even Analysis- Operating Break even Point and Financial Break even point
Margin of Safety and Operating Leverage
Financial Leverage - Trading on Equity
Financial Leverage - Double edge Sword
Capital Budgeting - Meaning and Process
Types of Capital Investment decisions
Replacement and Modernization decision
Expansion Decision
Diversification Decision
Mutually Exclusive Proposals Decision
Accept or Reject Decision
Contingent Decision
Difference between Accounting Profit and Cashflow
Meaning of Incremental Cashflows
Depreciation and Tax Benefit on Depreciation
Opportunity Cost and Sunk Cost
Working Capital Cost
Allocated Overhead costs
Types of Cashflow for New Projects and Replacement Projects
How to Calculate Cashflows
Block of Assets and Depreciation Principle
Treatment of Financing Costs
Post Tax Principles
Capital Budgeting Techniques
Payback Period Method - Meaning, Illustrations advantages and Disadvantages
Payback Period Reciprocal Method
Accounting Rate of Return Method (ARR) - Meaning, Illustrations advantages and Disadvantages
Discounted Payback Period Method - Meaning, Illustrations advantages and Disadvantages
Profitability Index Method (PI) - Meaning, Illustrations advantages and Disadvantages
Net Present Value Method (NPV) - Meaning, Illustrations advantages and Disadvantages
Internal Rate of Return (IRR) - Meaning, Illustrations advantages and Disadvantages
Internal Rate of Return (IRR) and Net Present Value Method (NPV) Reinvestment Assumption
Multiple Internal Rate of Return (Multiple IRR)
Modified Internal Rate of Return (MIRR) - Meaning, Illustrations advantages and Disadvantages
Capital Rationing
Divisible and Non- Divisible Projects
Methods to analyze Mutually Exclusive Projects with different tenures
Replacement Chain Method
Equivalent Annualized Criterion Method
Meaning ,Significance and Types of Working Capital
Optimum Working Capital
Approaches for Working Capital Investment
Working Capital Cycle or Operating Cycle - Concept and calculation
Raw Material Storage Period
Work in Progress holding period
Finished Goods Storage Period
Receivables Collection Period
Payables Period
Working Capital Estimation
Working Capital on Cash cost basis
Impact of Double Shift on Working Capital
Treasury and Cash Management
Cash Budget
Accelerating Cash Collections and Controlling Payments
Cash Management Models
William J Baumol EOQ Model
Miller Orr Cash Management Model
Management of Marketable securities
Inventory Management Basics
Reorder Level
Reorder Quantity
Minimum Stock Level
Maximum Stock Level
Average Stock Level
Danger Level and Buffer Stock
Management of Debtors - Meaning and Objective
Factors determining Credit Policy
Approaches to evaluation of credit policies - Total Approach and Incremental Approach
Financing Receivables
Factoring Services evaluation
Forfaiting
Management of Payables and Cost of Payables


Requirements
Basic Knowledge of Finance Management
Description
Hi
This is a Corporate Finance Course for CFA Level 1 Exam. It covers topics related to Corporate Finance in detail. The course consists of video lectures along with solved illustrations and Quiz that provides better understanding of concept. It is logically divided into various Modules and sections. Following are details of the same :
Module 1 : Introduction
(Includes Section 1)
Introduction and understanding the meaning of financial management.
Module 2 : Cost of Capital
(From Section 2 to Section 5 )
Here we will learn how to calculate cost of capital for individual capitals i.e Cost of Debentures/ Bonds, Cost of Preference shares , Cost of Equity shares and then How to calculate total cost of capital.
Cost of debt/Bonds and debentures includes calculation of Cost of Redeemable and Irredeemable debts using approximation method and Internal Rate of Return (IRR) Method. It also includes separate lecture wherein logic for using current price in calculating cost of capital is explained.
Cost of Preference shares using Approximation method and Internal Rate of Return (IRR Method)
Cost of Equity and Retained Earnings using Dividend Price Model, Earnings Approach model, Gordon's growth model, Realized Yield Approach, Capital Asset Price Model is explained along with examples. Besides Calculation of Growth Rate for Gordon's growth model, Beta , Types of Risks - Systematic and Unsystematic risks are explained in separate video lecture along with examples.
This section is concluded by calculating weighted average cost of capital (WACC) and Marginal cost of capital.
Module 3 : Leverages
(From Section 6 to Section 9)
Here we will be learning about different types of Leverages - Operational Leverage, Financial Leverage and Combined Leverage. This will be followed by Formula to calculate degree of operating leverage (DOOL/DOL), degree of Financial leverage (DOFL/DFL) and degree of combined leverage (DOCL/DCL). Operating and Financial break even points are analyzed in separate lectures and relationship of break even points with leverage is discussed. Some other topics include relationship between Margin of Safety and Operational leverage, Relationship between Break even point - Fixed cost and operational leverage, Why financial leverage is known as trading on equity and double edge sword.
Module 4 : Capital Budgeting
(From Section 10 to Section 25)
It begins meaning of Capital Budgeting and purpose of Capital Budgeting. This is followed by process of capital budgeting and types of Capital budgeting decisions - Replacement and Modernization decisions, Expansion decisions, Diversification decisions, Mutually Exclusive decisions, Accept or Reject decision, Contingent decision.
Other terms such as incremental cashflows, Tax Benefit on Depreciation, Opportunity cost and Sunk cost, Working capital costs, allocated overhead costs are also explained in separate tutorials along with illustrations. This is followed by types of cashflows for new project and replacement project along with basic principles of calculating cashflows.
All Capital Budgeting Techniques i.e Payback Period Method, Payback Reciprocal Method, Accounting Rate of Return (ARR) Method, Discounted Payback period method, Profitability Index method (PI) , Net Present Value Method (NPV) , Internal Rate of Return Method (IRR) and Modified Internal Rate of Return (MIRR) are discussed in detail along with meaning , Illustrations , advantages and disadvantages. Reinvestment assumptions and anomalies in Net Present Value Method (NPV) and Internal Rate of Return Method (IRR) method along with reasons and examples are discussed separately.
Capital Rationing Meaning and Capital Rationing for Divisible and Indivisible projects is discussed along with solved illustrations.
Methods to analyze Mutually exclusive projects with different tenures - i.e Replacement chain Method and Equivalent annualized criterion method are also included along with solved examples.
Module 5 : Working Capital Management
(From Section 26 to Section 33 )
This module begins with meaning significance and types of working capital.
The other sections includes following topics :
Optimum working capital
Operating Cycle and Working Capital Cycle - Meaning, Concept and Calculation along with comprehensive solved example
Estimation of Working Capital in detail that includes estimation of each and every component of working capital along with solved illustration.
Working Capital on Cash cost basis- Meaning, Concept and Calculation along with comprehensive solved example
Impact of Double Shift on Working Capital - Meaning, Concept and Calculation along with comprehensive solved example
Module 6 : Treasury and Cash Management
(From Section 34 to Section 38 )
It begins with meaning of Cash management along with functions of Treasury and Cash Management. It is followed by preparing of Cash Budgets - Both for long term and Short term along with solved illustrations.
Further it is followed by Cash Management Models and Theories. It includes William J Baumol's EOQ Model and Miller Orr Cash Management model.
It ends with lectures on recent developments in Cash Management Systems and Management of Marketable securities.
Module 7 : Inventory Management
(Section 39 )
This includes various topics related to Inventory management such as Reorder Level, Reorder Quantity, Minimum stock level, average stock level , Maximum stock level, Danger level and buffer stock along with solved illustration on inventory management.
Module 8 : Management of Receivables and Payables
(From Section 40 to Section 44 )
This module includes following topics :
Management of Debtors - Meaning and Objectives
Credit Policy - Meaning and Factors affecting credit policy
Approaches to evaluation of Credit policies along with the solved illustrations- Evaluation of Credit policies on Total Approach and Evaluation of Credit policies on Incremental Approach.
Financing receivables
Factoring services
Forfaiting
Innovations in receivables management
Monitoring of receivables
Management of Payables
Cost of Payables - Calculation along with solved illustration
Who this course is for:
For those pursuing CFA Level 1


More Info