Summary description of the course unit In the current context of uncertainty and lack of funding, it is essential to provide to students the knowledge and understanding of the criteria supporting investment/financing decisions. In this course are given tools of economic and financial reading, supported in accounting parts produced by the company, as well as in investment analysis.
Objetives and learning outcomes
The objectives of this course unit are the following: 1. Interpretation and analysis of financial statements; 2. Distinguish the characteristics of each investment/financing decision criteria; 3. Analyze the risk of investments; 4. To know the different funding sources and their different costs; 5. To prepare the financial part of a business plan.
Skills to be developed
It is important to provide managers and entrepreneurs with the skills to overcome the current context of uncertainty around investment and financing decisions. Therefore, it is intended students to develop the following skills: 1. To know the criteria for investment/financing decisions; 2. Analyze the conditions that must be met when making investment/financing decisions; 3. Understand and be able to apply the proper methodology of analysis, involving the different steps in the estimation of cash flows of an investment project and the application/use of analytical methods or the most appropriate indicators, being aware of the specifications of that project; 4. Learning to use the mechanisms that enable the adoption of strategies to mitigate the risk that characterizes the investment decision.
Programme
1. Overview of Project Analysis. 1.1. Typology of projects 1.2. Project life cycle and phases
2. Feasibility Studies. 2.1. Background analysis of a project 2.2. Resource analysis and technical feasibility 2.3. Market analysis 2.4. Economic and financial analysis 2.5. Organizational, humane political, social and environmental analysis
3. The basic documents of the economic and financial study. 3.1. Project Investment Plan 3.2. Project Exploration Plan 3.3. Project Financing Plan
4. Business Plan 4.1 Main steps 4.2. Structure of a business plan 4.3. Success factors of a business
5. Determinants and analysis of a project's cash flows 5.1. Measuring and estimating cash flows 5.2. Project and investor perspective
6. Decision criteria. 6.1 Concept of current value 6.2 Net Present Value (VAL) 6.3 Profitability Index (IR) 6.4 Investment Recovery Period (PRI) 6.5 Internal Rate of Return (IRR)
7. Selection of mutually exclusive projects.
Demonstration of the syllabus coherence with the curricular unit's learning objectives
-The first objective (interpretation and analysis of financial statements) is addressed in chapter 1 of the program, where the general concepts of function, analysis and financial equilibrium are studied. -The second objective related to the "decision criteria" is related to chapter 2 and the types of investment projects are discussed. -The third objective of analyzing the risk of investments is studied in chapter 3 with the approach to cash flows. -Chapter 4 discusses the different sources of financing and their costs, and finally chapter 5 meets the objective of preparing the financial part of a business plan.
Main literature
Lopes, Maria Dulce;Análise de Projetos de Investimento. , U.Porto Editorial, 2018. ISBN: 9789897461743 (4ª Edição)
Brealy, R., Myers, S. & Allen, F.;Principles of Corporate Finance, 13th Edition, McGraw-Hill, 2020. ISBN: 9781260013900
Supplementary Bibliography
Brealey, R., Myers, S., Allen, F.;Princípios de Finanças Corporativas 10a Edição, McGraw-Hill, 2013. ISBN: 978-85-8055-239-3
Learning Methods
The classes are theoretical and practical, thus the instructional methods include the expository method and the active learning method, which are used aiming the involvement of the students on the topics proposed by this course. The resources used in the expository method are the slides and other support materials displayed in the classes, which are available for the students on digital platform.
Assessment Components
Avaliação distribuída com exame final
Assessment Components
Description
Type
Time (hours)
Conclusion Date
Attendance (estimated)
Lessons
22,5
Teste/Exame
3
Trabalho laboratorial ou de campo
16
Participação Presencial
7,5
Study
4,5
Study
26,5
Total:
80
Continuous Assessment
1. Resolution of practical case: 20%
2. Individual written tests with 80% weight (40% weight assigned to each test) in the final grade.
Under the terms of the General Regulation: a) The effective attendance of students in class will be recorded and, if the number of absences per student exceeds 30% of the total number of contact sessions for each course unit, will be automatically transferred to the final evaluation of the normal season; b) In the written tests and in the defined evaluation elements it is necessary to obtain a minimum grade of 7.5 points; c) If the student misses or achieves a grade lower than 7.5 points in the tests or evaluation elements referred to in the previous number, he / she will be automatically transferred to the final evaluation of the normal season; d) If the student misses or achieves a grade lower than 7.5 points in the second written test (held on the same date as the final written test of the normal season), he / she may require registration for evaluation at the time of appeal; e) All written academic work provided for in the assessment (reports, case studies, etc.) must be submitted to the Turnitin database, available on the ISAG E-Learning platform, with a similarity rate up to 30% acceptable.
Final Exam
Written exam. And under the terms of Art. 41 of the General Regulation:
- The practical or theoretical-practical essay may also be considered, with a weighting corresponding to half of that considered in the continuous assessment, if the student communicates such intention to the professor, filling, in that case, a specific form to be made available by the professor at the moment of the written exam.
Improvement of final grade
The exam will correspond to 100% of the final grade.
Demonstration of the coherence between the teaching methodologies and the learning outcomes
The first objective presupposes the use of the Microsoft Powerpoint program to present theoretical contents. The remaining objectives combine the theoretical slide presentation from the same software, with exercises in the classroom, through worksheets made available to the students, the accomplishment of a computer lab activity to access statistical and market data and the analysis of working documents.