Knowledge

The student can...

explain the basic theories relevant to understanding financial markets¿ tasks in a modern market economy
elaborate on key financial concepts relevant to understanding and describing investment projects and financing projects as financial activities
describe the theoretical foundation behind the methods used to calculate the profitability of investment projects
explain the relationship between methods for analysing profitability and owners¿ financial interests
describe the various sources of funding available and how each funding structure affects the risk and returns
explain the main theories and controversies in financial economics

The student is familiar with...

relevant empirical data for Norwegian financial markets
why accounting is necessary
the record keeping for and closing of accounts
relevant laws and regulations governing accounting
the standard chart of accounts
the need for accounting analysis and how it is done
the contents of a cash flow analysis
the usefulness for economists of using spreadsheets

The student...

has broad knowledge that forms the basis for developing and using relevant financial management data and control systems in the continuous monitoring of operations as well as in specific decision-making systems
knowledge of various financial and non-financial performance goals, and will develop the ability to assess the advantages and disadvantages of these
knowledge of traditional tools for calculations and budgeting
knowledge of newer ideas and tools for planning, monitoring and control

Skills

The student is able to...

Budget decision-relevant cash flow to total assets and equity in investment projects
Use financial mathematics to discount cash flows

Calculate risk-adjusted yield requirements using the capital asset pricing model
Conduct profitability analysis of investment projects based on present value, internal rate, modified internal rate and repayment method
Perform sensitivity analyses to examine the risk of investment projects
Estimate the economic life of investment projects
Calculate the effective interest rate and use it in various financing decisions
Take account of tax and inflation in investment and financing decisions
Calculate the expected return and the standard deviation of returns for risk projects
Calculate the expected return and the standard deviation of returns for portfolios, and find the minimum-variance portfolio
Calculate the Value-at-Risk for risk projects and portfolios
Use regression analysis to reveal credit risks
Use software tools for analysing profitability and risk in investment and financing projects

and...

Perform simple record-keeping and finalise an account
Arrive at a final account balance for regular accounts with standard account numbers, and with this as a starting point set up an income statement and a balance sheet
Read and understand the contents of a statement of cash flow
Post the most common transactions
Make periodic postings in relation to a period ending
Explain the relationship between transactions and their impact on the income statement and balance sheet
Produce annual financial statements for limited companies, with simple posts and allocation of profits
Set up grouped results and balances in accordance with the provisions of the Accounting Act
Manage key accounting measurement and assessment issues
Analyse a cash flow statement
Implement adaptation and correction of accounting figures for analytical purposes
Calculate key figures in connection with a financial analysis and make an assessment of a company's profitability, liquidity and solvency

and...

Can allocate costs from items via cost placement/activity for the costing object
Can perform a product calculation in relation to the full costing and contribution principle for companies in various industries, including activity-based costing, and understand the fundamental prerequisites for and weaknesses of the various methods of calculation
Understands the idea behind normal cost calculation, knows the conditions and purpose of a statement of operations based on the normal cost and is able to draft a normal cost account
Perform calculations using the standard cost method, activity-rectify the organisation¿s budget and prepare management accounts based on standard cost, including a flexible budget
Can calculate and explain the performance impact of inventory changes
Can perform variance analysis, explain the reasons for discrepancies and propose necessary measures
Be able to identify decision-relevant costs and revenues and solve various decision-related problems
Be able to discuss the purpose of budgeting and prepare master budgets for liquidity, result and balance, and understand how budget processes can be organized

General competence

Students...

can reflect critically on ethical issues related to investment and financing projects
can communicate subject matter in line with current requirements for the use of headers, footers, page numbering, and images and items from worksheets, and is able to use styles
can develop his/her own models in a spreadsheet using the skills described above

In addition to having knowledge of traditional management accounting, the student also has knowledge of recent ideas for planning, monitoring and control.

Subject description BØA2100-B

Business Financial Analysis

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