Financing Business Development

• 26 hrs lectures
• 13 hrs exercises

The aim of the course is to:

- Familiarize students with fundamental concepts, current issues, and trends in business development financing in relation to corporate strategy.

- Present approaches to measuring company value and the process of determining company value.

- Guide students in understanding the principles and processes of creating a financial plan as part of a business plan, evaluating the effectiveness of business development projects, and managing project cash flow.

- Develop a clear understanding of potential sources of financing, their costs, and their utilization in business development decision-making.

Knowledge: Students will be able to describe and explain the evolution of business objectives at various stages of enterprise development. They can describe approaches to determining company value and the process of valuation, define basic value drivers. Students understand the significance of the cost of capital category for selecting appropriate financing sources. They will be capable of using diverse methods to construct financial plans and short-term budgets, understanding the limitations of each method. Students will be able to describe fundamental decision-making tasks related to corporate investment activities, as well as suitable methods for evaluating alternative solutions. They will possess knowledge of potential capital-raising options.

Skills: Students will be able to assess the suitability of business financing sources based on various criteria and terms of provision, establish criteria for evaluating investment projects according to project type and corporate goals. They can select appropriate approaches to measuring and considering risk in investment decision-making. They understand methods for hedging exchange rate risk and can calculate hedging costs. Students will be able to create a financial plan and evaluate its implementation.

Competencies: Students can propose suitable methods for financing business projects based on industry and business financial risk. They are capable of comprehensively assessing the economic efficiency of investment projects, including project risk analysis. They understand the limitations of different project efficiency evaluation methods and can consider non-financial factors in project sustainability. They can proficiently develop a financial plan for a business, including project cash flow planning, and implement measures to manage corporate cash flow effectively.

To successfully master the course, it is advisable to have knowledge of business economics, methods of presenting company results, and interpreting information contained in financial statements, as well as an understanding of financial analysis indicators.

• Chris M. Mellen, Frank C Evans. Valuation for M&A: building value in private companies. Hoboken, N.J. Wiley, 2010.

• REŽŇÁKOVÁ, M. Efektivní financování rozvoje podnikání. Praha: Grada, 2012
• Tim Koller, Marc Goedhart, David Wessels, McKinsey and Company. Valuation: measuring and managing the value of companies. Hoboken: John Wiley & Sons, 2010
• MAŘÍK, M. a kol. Metody oceňování podniku: Proces ocenění, základní metody a postupy. 4. vyd. Praha: Ekopress, 2018.
• REŽŇÁKOVÁ, M. a kol. Řízení platební schopnosti podniku. Praha: Grada, 2010.

They are available in e-learning.

1. Introduction to the subject: strategic objectives of the company and their measurement
2. Measurement and management of enterprise value. Value drivers.
3. Investment decision making: cash flow forecasting
4. Investment decision making: methods for evaluating the effectiveness of a project
5. Investment decision making: a case study
6. Financing strategy: potential sources of financing
7. Sources of financing for business development projects - I.
8. Sources of financing for business development projects - II.
9. Cost of capital and its use in corporate decision-making
10. Managing the solvency of the enterprise in the long term: working capital and factors influencing its amount
11. Cash flow management: managing receivables and cash
12. Financial plan as part of the business plan. Analysis of plan execution
13. Summary, reserve

1. Definition of course completion conditions: assignment of a seminar paper. Cash flow of the company, evaluation of stability and profitability of the company.
2. Planning cash flow from investment projects and methods of evaluation of investment projects.
3. Determining the price of financing sources.
4. Financial plan for enterprise development.
5. Determining the working capital requirements of an enterprise.
6. Reserve, consultation

Students will be evaluated based on the completion of a seminar project focused on financing a business development project and a written test assessing practical skills and the application of theoretical knowledge. The seminar project can be completed by teams of up to three students.

The written test will contribute 40% to the overall assessment, while the seminar project will contribute 60%. A classified credit will be awarded if the student achieves at least 50 points in total.

Teams for the seminar project must be formed and reported to the instructor via e-learning no later than October 5, 2024.

The seminar project must be submitted by November 29, 2024 (23:59) via e-learning. Each project must include both a textual and computational part (in .pdf and .xlsx/xls formats).

Late submissions will incur a penalty (-10%), and the absolute deadline for submission is December 31, 2024 (submissions after this date will not be accepted for assessment in this academic year).

Main required components of the seminar project:

- Introduction of the company for which the project is developed, including economic results

- Description of the business development project

- Predictions of cash flows for the project over three years, including expected expenses, financing needs, selection of financing sources, potential repayment from project revenues (in the form of a complete financial plan consisting of a planned balance sheet, income and expense plan, and cash flow plan)

- Final evaluation of project benefits

The assessment of the project will be based on the extent to which the assignment is fulfilled. A total of 40 points can be earned for the project.

The project will be accepted if it scores a minimum of 30 points (50%). Students may revise or amend their project once. Only students who score at least 30 points on the seminar project may participate in the written test ( dates will be published on the Information System).

The written test comprises examples and theoretical questions. Students have the opportunity to retake the test once.

Students studying according to the Individual Study Plan (ISP) have the same conditions for obtaining a classified credit. Deadlines for project submission and the written exam may be set individually.

In addition to scheduled classes, communication can be conducted via email to the published address or during office hours.