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1- 1 © ADMN 4116, Anton Miglo ADMN 4116: Portfolio Management Lecture 1: Introduction Anton Miglo Spring 2015
1- 2 © ADMN 4116, Anton Miglo Organizational comments Blackboard: course outline, grades, announcements, PPT and PDF slides Class notes: key for your success Assignments: no late assignments Investment game: teams Tests: TBA E-mail: no e-mail communication; only emergency cases (medical or smth.); I don’t answer the message if it was answered in class.
1- 3 © ADMN 4116, Anton Miglo Organizational comments Grades: additional points It has two parts: first 5% are given to everybody in the beginning of the course. This can only be reduced in the following cases: Irrespective behaviour Disruptive behaviour Missing classes Second 5% will be given at my discretion for class participation. Since any direct control of attendance is difficult and inefficient the following criteria are typically used: Questions in class Questions outside of class (office hours, not e-mail).
1- 4 © ADMN 4116, Anton Miglo Organizational comments Stock Track Investment Management exercise: interaction, strategy, creativity Group projects: cases
1- 5 © ADMN 4116, Anton Miglo
1- 6 © ADMN 4116, Anton Miglo Please! 1.Don’t …. 2.Turn it off!
1- 7 © ADMN 4116, Anton Miglo
1- 8 © ADMN 4116, Anton Miglo
1- 9 © ADMN 4116, Anton Miglo Topics Introduction Types of securities Risk and Return CAPM and Portfolio Management Fixed-Income Securities Equity Analysis Options, Futures and Forwards Advanced Topics
1- 10 © ADMN 4116, Anton Miglo
1- 11 © ADMN 4116, Anton Miglo Lecture 1: Money and finance Types of business organization Financial decisions and corporate organization chart Financial information versus accounting reports Introduction to Excel Topics Covered
1- 12 © ADMN 4116, Anton Miglo Money and Finance
1- 13 © ADMN 4116, Anton Miglo Projects
1- 14 © ADMN 4116, Anton Miglo Securities
1- 15 © ADMN 4116, Anton Miglo Forms of Business Organization Sole proprietorship Partnership Corporation Ease of formation/ termination Easy Relatively Easy Complex Life of a firmTermination or death Death or withdrawal of partners In perpetuity Owners liability Unlimited Usually unlimited Limited Separate legal entity No Yes Degree of controlComplete StrongSeparation of control and ownership Taxes Based on personal Income taxesCorporate Income Tax & tax on dividends Transfer of ownership LimitedRequires agreement of the partners Unlimited
1- 16 © ADMN 4116, Anton Miglo Organization Chart Board of Directors CFO GM Production Treasurer: raising capital banking relationship CEO GM Marketing Controller: Prepares financial statements and budgets, Internal accounting, taxes
1- 17 © ADMN 4116, Anton Miglo The Balance Sheet (Accounting View) = Cash 42 Receivable 86 Inventory 14 Short-term Investments 15 Fixed Assets 902 Intangible Assets 85 Total Assets 1,144 Bank loan 40 Ac. Payable 120 Bonds 60 Long Term Bank Debt 464 Capital 110 Additional capital 40 Retained earnings 310 Liab&Shareholders’ Equity 1,144 ASSETS LIAB&EQUITY Book Values!!!!
1- 18 © ADMN 4116, Anton Miglo The Financial View of the Firm = Assets in place 1,144 Growth Assets 140 Total Assets 1,284 Debt 684 Equity 600 Liab&Shareholders’ Equity 1,284 ASSETS LIAB&EQUITY Market Values!!!!
1- 19 © ADMN 4116, Anton Miglo Income Statement Sales 1,301.00 Cost of Googs sold 1,031.00 EBITDA 270.00 Depreciation & Amortization 140.00 EBIT 130.00 Net interest expense 10 Income Before Taxes 120.00 Income Taxes 29.00 Net Income After Taxes 91.00 Cash Dividends22.00 Retained earnings69.00
1- 20 © ADMN 4116, Anton Miglo Excel! EVERYONE uses it! The biggest technical skill needed in business Use Excel to do finance and you’ll have a double advantage: Both finance and Excel
1- 21 © ADMN 4116, Anton Miglo Introduction to Excel Basic basics about Excel! Can probably be skipped! Most students know this materials
1- 22 © ADMN 4116, Anton Miglo Getting started You’ve managed to open Excel Excel buttonOffice button on desktop
1- 23 © ADMN 4116, Anton Miglo Excel 2003, Excel 2007, Excel 2010 All versions basically the same Differ in minor stuff (graphics, toolbars) All spreadsheets for Principles of Finance with Excel work in all versions of Excel (though see next slide)
1- 24 © ADMN 4116, Anton Miglo The small print PFE files are saved in the Excel 2007/2010 format To open in Excel 2003, download the compatibility pack from Microsoft:
1- 25 © ADMN 4116, Anton Miglo Some rules for financial modeling These rules will help you build better spreadsheets Readibility, Logic, Simplicity—this is what you should strive for
1- 26 © ADMN 4116, Anton Miglo Try to put important variables in one place
1- 27 © ADMN 4116, Anton Miglo Don’t hard-wire numbers Use formulas instead of numbers
1- 28 © ADMN 4116, Anton Miglo Avoid using blank columns to accommodate cell “spillovers”
1- 29 © ADMN 4116, Anton Miglo Do not forget to name your spreadsheets UGLY!! You can name sheets by clicking on the sheet tab.
1- 30 © ADMN 4116, Anton Miglo Adding “Getformula” to your spreadsheet Some of my spreadsheets embed a small program called Getformula that allows you to see what you’ve written in a cell When you open such a file, Excel will ask you if you want to open Getformula:
1- 31 © ADMN 4116, Anton Miglo You may have to tinker with your spreadsheet Security settings!
1- 32 © ADMN 4116, Anton Miglo You’ve got a blank spreadsheet Save it! (all the time!) Which format?? Excel Workbook: OK for most uses Excel Macro-Enable Workbook: If you want to embed Getformula macro into spreadsheet Excel 97-2003 Workbook: Lowest common denominator Where should you save it? My documents Special folder? Anton/Junk is a folder I’ve created
1- 33 © ADMN 4116, Anton Miglo Formatting the numbers Mark numbers to be formatted Press right mouse button and choose Format Cells
1- 34 © ADMN 4116, Anton Miglo Relative versus absolute copying Relative copying Absolute copying
1- 35 © ADMN 4116, Anton Miglo First spreadsheet How does an investment of $1000 grow over time with 15% annual interest? Note formula in cell and in Formula Bar
1- 36 © ADMN 4116, Anton Miglo Copying the formula by dragging The result
1- 37 © ADMN 4116, Anton Miglo Excel hint Instead of dragging cell B4, there’s an even simpler way to copy. Put your cursor on the handle and double- click with the left mouse button The formula will be copied through the last row of the adjacent filled column. In this case: from cell B5 through B13.
1- 38 © ADMN 4116, Anton Miglo Formatting: Look at the toolbar You can change the fonts You can change the cell alignment You can merge cells, wrap text You can do number formats PLAY AROUND WITH THIS! IT’S EASY!
1- 39 © ADMN 4116, Anton Miglo Shortcut There’s a shortcut to this format (2 decimals, comma): Ctrl+Shift+!
1- 40 © ADMN 4116, Anton Miglo Use F4 to change from Relative to Absolute references At this point, you’re still in the cell (haven’t hit Enter). By hitting F4, you can change the B2 to various kinds of absolute references: $B$2: Absolute when copied $B2: Column absolute, row relative B$2:Row absolute, column relative B2:Back to all relative
1- 41 © ADMN 4116, Anton Miglo Digression: Shortcuts in Excel Many! F1: Help F2: Edit cell F4: Repeat last action F2, then F4: change from relative to absolute copying 41
1- 42 © ADMN 4116, Anton Miglo [End]+[Arrow] shortcut Problem: You have a lot of data and you want to mark it all Put cursor on first cell Hold down Shift key Push End key and Down-arrow Problem: You have a lot of data and you want to get to the other end Put cursor on first cell Push End key and Down-arrow 42
1- 43 © ADMN 4116, Anton Miglo 43
1- 44 © ADMN 4116, Anton Miglo Last slide:
1- 45 © ADMN 4116, Anton Miglo Last slide:
Principles of Finance with Excel, 2 nd edition Instructor materials Chapter 1 Introduction to Excel.
1- 1 © Financial Management, Anton Miglo Financial Management 1 Lecture 1: Introduction Anton Miglo Fall 2015.
Overview of Finance. Financial Management n The maintenance and creation of economic value or wealth.
Corporate Finance Mr. Long Sovang, MFI. 1.1 Introduction to Corporate Finance.
Chapter 1 Introduction to Corporate Finance Copyright © 2012 by McGraw-Hill Education. All rights reserved.
© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Introduction To Corporate Finance Chapter One.
Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 9-1 Chapter (1) An Overview Of Financial Management.
Introduction to Financial Management
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 1.0 Introduction to Financial Management Chapter 1.
INTRODUCTION TO CORPORATE FINANCE CHAPTER 1 Copyright © 2016 McGraw-Hill Global Education LLC. All rights reserved.
Key Concepts and Skills
CHAPTER 1 Introduction to Corporate Finance 1. Why Study Finance? Marketing Budgets, marketing research, marketing financial products. Accounting Dual.
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 0 Chapter 1 Introduction to Financial Management.
McGraw-Hill/Irwin ©2001 The McGraw-Hill Companies All Rights Reserved Essentials of Corporate Finance RossWesterfieldJordan Third Edition.
FUNDAMENTALS OF CORPORATE FINANCE MGF301 Fall 1998 Vigdis Boasson SUNY at Buffalo
Chapter 1 Introduction to Financial Management. Key Concepts and Skills Know the basic types of financial management decisions and the role of the financial.
© 2005 McGraw-Hill Ryerson Limited © 2003 The McGraw-Hill Companies, Inc. All rights reserved.
CHAPTER ONE Introduction To Corporate Finance. Key Concepts and Skills Know the basic types of financial management decisions and the role of the financial.
1- 1 CURRICULUM Introduction: goal of the firm Financial markets and institutions, accounting and finance Measuring corporate performance Long-term.
Chapter 1: Outline Corporate Finance and the Financial Manager
The Fundamentals of Business Organizations is Canada. How are businesses different?
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. 1 Introduction To Corporate Finance.
Welcome! FIN 335 –Principles of Financial Management Clay M. Moffett, Ph.D. Cameron 220 O
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Supplements. Profit-making enterprises Sole proprietorship: Partnership: Corporation:
Engineering Economics and Management ( ) B.E. 3 rd Semester Computer Engineering Department Prepared by:- PATHAK SONAL Y. ( ) SHREYA.
1-1 Corporation Advantages ◦ Limited liability ◦ Unlimited life ◦ Separation of ownership and management ◦ Transfer of ownership is easy ◦ Easier to raise.
FINANCIAL MANAGEMENT I AND II
1 CHAPTER 1 Overview of Financial Management and the Financial Environment.
+ Introduction to corporate finance CH 1. + What is corporate finance? What is the role of the financial manager in the corporation? What is the goal.
Financial Statements Gitman/Madura Chapter 8 Lecture notes 8.
Financial Management. Copyright: M.S. Humayun Financial Management (F.M.) What is FM? FM is the management of financial resources – how best to find and.
Chapter 1 Introduction to Corporate Finance Corporate Finance and the Financial Manager Forms of Business Organization The Goal of Financial Management.
Risk and Return, Business Structures By R. S. Miolla.
1 Chapter 01 Introduction to Financial Management McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Accounting and Tax for the Small Business NOVEMBER 8, 2012.
Introduction to financial management
Finance and the Financial Manager. “Any legal economic activity to earn profit is called business.” Kinds of Business: Manufacturing Business Services.
Introduction to Corporate Finance
© 2005 Pearson Education Canada Inc. BZUPAGES.COM 1-1 Overview of Corporate Finance Hashim Ali Shah
Splash Screen Chapter 3 Business Organizations 2 Contents CHAPTER INTRODUCTION SECTION 1Forms of Business Organization SECTION 2Business Growth and Expansion.
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