BUS202: Principles of Finance

Welcome to BUS202: Principles of Finance

Specific information about this course and its requirements can be found below. For more general information about taking Saylor Academy courses, including information about Community and Academic Codes of Conduct, please read the Student Handbook.

Course Description

Learn how to make smart financial decisions by determining which projects will offer the best potential payoff, figuring out your best investment opportunities, and evaluating stock options.

Course Introduction

Firms are required to keep detailed financial records so that organized reports can be distributed to managers, shareholders, and government regulators. Principles of Finance will focus on what these managers, investors, and government agencies do with this information. It is an introductory course to various fields of finance and is comparable in content to courses that other institutions label as "corporate finance" or "financial management".

Finance is a broad term; you will find that both managers that compile the financial reports we discussed in financial accounting and stockbrokers working on Wall Street will claim that they work in finance. So what exactly is finance? Finance is the science of fund management. It is distinct from accounting in that, whereas accounting aims at organizing and compiling past information, finance is geared towards deciding what to do with that information.

In this course, you will be exposed to a number of different sub-fields within finance. You will learn how to determine which projects have the best potential payoff, to manage investments, and even to value stocks. In the end, you will discover that all finance boils down to one concept: return. If I give you money today, how much money will I get back in the future? Though the answer to this question will vary widely from case to case, by the time you finish this course, you will know how to find the answer.

You will learn how to use financial concepts such as the time value of money, pro forma financial statements, financial ratio analysis, capital budgeting analysis, capital structure, and the cost of capital. This course will also provide an introduction to bonds and stocks. Upon completion of this course, you will understand financial statements, cash flow, time value of money, stocks and bonds, capital budgeting, ratio analysis, and long term financing, and apply these concepts and skills in business decisions.

This course includes the following units:

• Unit 1: Introduction to Finance, Financial Statements, and Financial Analysis
• Unit 2: Time Value of Money: Future Value, Present Value, and Interest Rates
• Unit 3: Capital Budgeting Techniques
• Unit 4: Risk and Return
• Unit 5: Corporate Capital Structure, Cost of Capital, and Taxes
• Unit 6: Applying the CAPM Model

Course Learning Outcomes

Upon successful completion of this course, you will be able to:

• explain the objectives of the financial manager and how the organizational structure of a corporation affects financial decisions;
• explain the concept of the time value of money, how the present value calculation is related to the future value calculation, and how those are used in the valuation of financial instruments and applied to elements of stock and bond valuation;
• explain the rules and methods in capital budgeting when making financial decisions;
• explain the use of the CAPM model for estimating valuations of a company's rate of return;
• understand the relationship between investment risk and reward in finance and the application of that to financial principles;
• describe the principles and tools of working capital management and be able to classify long-term and short-term capital;
• distinguish between debt and equity instruments, their associated uses and characteristics and their impact on a firm's capital structure, the relevant details of their rate, ownership, and repayment structures, and their unique risks and relationships to market and economic events
• understand the considerations in making capital investment decisions; and
• interpret, prepare, and distinguish between the types of financial statements and their uses.

Throughout this course, you will also see learning outcomes in each unit. You can use those learning outcomes to help organize your studies and gauge your progress.

Course Materials

The primary learning materials for this course are articles, lectures, and videos.

All course materials are free to access and can be found in each unit of the course. Pay close attention to the notes that accompany these course materials, as they will tell you what to focus on in each resource, and will help you to understand how the learning materials fit into the course as a whole. You can also see a list of all the learning materials in this course by clicking on Resources in the navigation bar.

Evaluation and Minimum Passing Score

Only the final exam is considered when awarding you a grade for this course. In order to pass this course, you will need to earn a 70% or higher on the final exam. Your score on the exam will be calculated as soon as you complete it. If you do not pass the exam on your first try, you may take it again as many times as you want, with a 7-day waiting period between each attempt. Once you have successfully passed the final exam you will be awarded a free Course Completion Certificate.

There are also end-of-unit assessments and other quizzes in this course. These are designed to help you study, and do not factor into your final course grade. You can take these as many times as you want until you understand the concepts and material covered. You can see all of these assessments by clicking on Quizzes in the course's navigation bar.

Earning College Credit

This course is eligible for college credit via Saylor Academy's Direct Credit Program. If you want to earn college credit, you must take and pass the Direct Credit final exam. That exam will be password protected and requires a proctor. If you pass the Direct Credit exam, you will receive a Proctor Verified Course Certificate and be eligible to earn an official transcript. For more information about applying for college credit, review the guide to college credit opportunities. Be sure to check the section on proctoring for details like fees and technical requirements.

There is a 14-day waiting period between attempts of the Direct Credit final exam. There is no waiting period between attempts for the not-for-credit exam and the Direct Credit exam. You may only attempt each Direct Credit final exam a maximum of 3 times. Be sure to study in between each attempt!

Tips for Success

BUS202: Principles of Finance is a self-paced course, which means that you can decide when you will start and when you will complete the course. There is no instructor or an assigned schedule to follow. We estimate that the "average" student will take 50 hours to complete this course. We recommend that you work through the course at a pace that is comfortable for you and allows you to make regular progress. It's a good idea to also schedule your study time in advance and try as best as you can to stick to that schedule.

Learning new material can be challenging, so we've compiled a few study strategies to help you succeed:

• Take notes on the various terms, practices, and theories that you come across. This can help you put each concept into context, and will create a refresher that you can use as you study later on.
• As you work through the materials, take some time to test yourself on what you remember and how well you understand the concepts. Reflecting on what you've learned is important for your long-term memory, and will make you more likely to retain information over time.
• Although you may work through this course completely independently, you may find it helpful to connect with other Saylor students through the discussion forums. You may access the discussion forums at https://discourse.saylor.org.

Technical Requirements

This course is delivered entirely online. You will be required to have access to a computer or web-capable mobile device and have consistent access to the internet to either view or download the necessary course resources and to attempt any auto-graded course assessments and the final exam.

• To access the full course including assessments and the final exam, you will need to be logged into your Saylor Academy account and enrolled in the course. If you do not already have an account, you may create one for free here. Although you can access some of the course without logging in to your account, you should log in to maximize your course experience. For example, you cannot take assessments or track your progress unless you are logged in.
• If you plan to attempt the optional Direct Credit final exam, then you will also need access to a webcam. This lets our remote proctoring service verify your identity, which is required to issue an official transcript to schools on your behalf.

For additional guidance, check out Saylor Academy's FAQ.

Fees

This course is entirely free to enroll in and to access. Everything linked in the course, including textbooks, videos, webpages, and activities, is available for no charge. This course also contains a free final exam and course completion certificate.

This course also has an optional final exam that can give you an opportunity to earn college credit. This exam requires the use of a proctoring service for identity verification purposes. The cost for proctoring for this optional exam is $5 per session.