The course Financial Management: Financing is a core subject taught in the second semester of the second year of the Degree in Business Administration, which addresses the decisions made by corporate managers regarding sources of funds and the criteria to be used when choosing among them. It shows the characteristics of the financing alternatives (cost, maturity, enforceability, origin, etc.) that will allow decide which funding source is more appropriate for the financial structure of a company.



For a correct development of the course, students should have previous basic knowledge of the financial area and the operation of financial management within a company or about NPV and IRR calculations (Business Economics: Introduction). It is also important to know about Financial Mathematics (simple capitalisation and compound capitalisation) and have sufficient knowledge about basic mathematics (solving second degree equations).

RESULTS OF THE LEARNING PROCESS

• Identification of sources of funds.

• Analysis of the economic and financial characteristics of these sources.

• Evaluation and selection among alternative sources of corporate funds.

• Analysis and evaluation of short- and long-term consequences of financing decisions.



SPECIFIC COMPETENCIES

• Analyze the economic and financial problems stemming from the choice among corporate financing alternatives (CE1).

• Evaluate and select corporate funding sources according to the state and needs of a company, considering financial criteria (CE2).

• Analyze and evaluate the financial consequences of corporate financing decisions (CE3).

Part I: INTRODUCTION

Chapter 1. Sources of Corporate Financing

Part II: SHORT-TERM CORPORATE FINANCING

Chapter 2. Payments to Suppliers

Chapter 3. Short-term Bank Loans

Chapter 4. Bank Discounting

Chapter 5. Factoring

Chapter 6. Credit Lines

Part III: LONG-TERM CORPORATE FINANCING

Chapter 7. Long-term Bank Loans

Chapter 8. Leasing

Chapter 9. Cost of Equity

Part IV: WEIGHTED AVERAGE COST OF CAPITAL

Chapter 10. Average Cost of Financing: Weighted Average Cost of Capital



At the beginning of the semester the students will receive (through the web) a detailed schedule of the different topics. Exercises and notes will be uploaded to eGela for the students to work on them.

A mixture of teaching methodologies is scheduled:



LECTURE CLASS. This is a teaching method in which there are no splits; it thus corresponds to large groups. It encompasses both theoretical and practical classes.



COMPUTER PRACTICE. It is a teaching method applicable in small groups. It can be based on case studies or be oriented toward project-based learning. It will be use different programs such as Excel.



SEMINARS. This teaching method is applicable in small groups since it allows greater interaction between professors and students. The work will be supervised by the Professor.



OUT-OF-CLASSROOM WORK. In addition to class hours, materials will be provided for the students to complete their training; they can be assisted during tutorial hours.



The teachers who explain this subject promote academic ethics by encouraging sensitivity and perception of the ethical aspects of students, both in their attitude within the classroom and in the performance of individual or team work and various tasks and practices throughout the course.

• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 70
  • Realization of Practical Work (exercises, cases or problems) (%): 30

The evaluation method will be mixed. It comprises two parts.



•Continuous evaluation (3 points out of 10)

The activities will combine individual and collective tasks, both in and out of the classroom. Sometimes they will be theoretical for the most part, whereas they will relate to corporate practice in other instances. The active and positive participation, the collaboration with other students and with the professor in the classroom will be positively valued and graded. Specific dates for the development of the work and the deadline for delivery will be announced at the beginning of the course.



•Final examination (7 points out of 10)

Here both the theoretical knowledge and the applied one will be assessed.

The final grade will be a weighted average of the continuous evaluation and the final exam, provided the grade of the latter surpasses 50% of its total value; otherwise the grade of the exam will apply.



Students can renounce the continuous, mixed grading and opt instead for the final exam. For this purpose they must state it clearly in writing and pass it on to the Professor during the first 9 weeks of the course. The specific procedure will be posted on the university’s e-Gela platform. Those students that have opted for the final evaluation will sit an exam that will provide 100% of the final grade or a final exam and other marking issues equivalent to those asked at continues students.



The students that do not sit for the final exam will be graded as “Not turned up” whatever the grading system that applies to them. Should there be evidence of copy in any of the aforementioned tests the student will be graded “Failed” in that call.

1. Those students that have undergone the continuous evaluation in the first call can renounce it. To this end they will state it clearly in writing and pass it on to the Professor at least 7 days before the second-call exam. The specific procedure will be posted on the university’s e-gela platform.



2. The students that have undergone the continuous evaluation in the first call and stick to it will keep the grade attained at it (3 points at most). They will also face a final exam similar to the one in the first call (up to 7 points). The final grade will be a weighted average of the continuous evaluation and the final exam, provided the grade of the latter surpasses 50% of its total value; otherwise the grade of the exam will apply.



3. Students who have skipped over the continuous evaluation, whether in the first or the second call, will be allowed to deliver a written test/questions/computer exam or other with theoretical-practical questions (equivalent to issues in the first call) about the basic contents of the subject (up to 3 points). They will have to take a final exam similar to that in the first call (up to 7 points).



The students that do not sit for the final exam will be graded as “Not turned up” whatever the grading system that applies to them. Should there be evidence of copy in any of the aforementioned tests the student will be graded “Failed” in that call.

BREALEY R.A., MYERS S.C. & ALLEN, F. (2013): Principles of corporate finance. 11th ed., McGraw Hill, Boston.

ROSS S.A., WESTERFIELD R.F. & JAFFEE J. (2012): Corporate Finance. 10th ed. McGraw Hill, New York.

Basic bibliography

BREALEY R.A., MYERS S.C. & ALLEN, F. (2013): Principles of corporate finance. 11th ed., McGraw Hill, Boston.



ROSS S.A., WESTERFIELD R.F. & JAFFEE J. (2012): Corporate Finance. 10th ed. McGraw Hill, New York.

In-depth bibliography

ANDRIEU, G., STAGLIANÒ, R., & VAN DER ZWAN, P. (2018). Bank debt and trade credit for SMEs in Europe: firm-, industry-, and country-level determinants. Small Business Economics, 51(1), 245-264.

COWTON, CH. & SAN-JOSE, L. (2017). On the Ethics of Trade Credit: Understanding Good Payment Practice in the Supply Chain. Journal of Business Ethics 104(4), 673-685.

CRUNDWELL, F. K. (2008): Finance for engineers: evaluation and funding of capital projects. Springer-Verlag, London.

EHRHARDT, M.C. &. BRIGHAM E. F. (2008): Corporate finance. A focused approach. 3rd ed. Thomson. New Jersey.

HILLIER D., GRINBLATT M. & TITMAN S. (2011): Financial markets and corporate strategy. Second European edition. McGraw Hill

SAN-JOSE, L.; ITURRALDE, TX. & MASEDA, A. (2009). ICTs influence on Cash Management and on the Performance of Financial Department: Explanatory Model, Canadian Journal of Administrative Science. Vol. 26, N 2, 150-169.

SAN-JOSE, L.; RETOLAZA, J.L. & GUTIERREZ-GOIRIA, J. (2011). Are ethical banks different? A comparative analysis using the Radical Affinity Index, Journal of Business Ethics 100(1): 151-173.

Journals

Harvard Business Review
Journal of Applied Corporate Finance
Journal of Corporate Finance
European Financial Management

Web addresses

Bank of Spain: http://www.bde.es/bde/en
European Association of Corporate Treasurers: https://www.eact.eu/
European Central Bank: http://www.ecb.int
Financial Executives web link: http://www.financialexecutives.org/
Treasurers Organization: https://www.treasurers.org/