GRADO EN ADMINISTRACIÓN Y DIRECCIÓN DE

EMPRESAS

Gestión Financiera

Dra. Jos é L uis Sánchez

[Link]@[Link]
Gestión Financiera
General Information

C ourse: G estión Fi nanciera

(Financial M anagement)

Teacher: José Luis Sánchez

Em ail: [Link]@ uneat [Link]
Cell: 699.005.909

M ondays (R oom TBD) – 18:25 – 20:25

Thursdays ( Room 0, 8) – 14:15 – 16:15
Gestión Financiera
General Information

• Name?
• Country of Origin?
• Major at University?
• What do you want to get out of this class?
Gestión Financiera
General Information
1 - I nt r od u c ti on
3 - F i nan ci al P ol ic i es
a . F in a n c ia l Ma n a ge m e n t.
d. F i nan ci ng Mec ha ni sm s
b . T he r e l a ti on s h ip of A c c o u nt in g a n d F i na n c e a. F i nan ci ng wi th cu st omer s , su ppl i er s, S S, AE AT , etc .
c . T he Es s e n c e of F i na n c e b. Di sc ou nt T ra de Bi l ls
d . C o r po r a te F in a n c e c . Cr ed it Po li c ie s
e . T he r o le o f To d a y ´ s C FO d. F ac to ri ng
f. T he p la n n in g p r o c e s s e. Con fi r min g
g . R i s k i n t he d e c is i o n - m a k i ng pr o c e s s f. Le as in g

2 - F i n a n ci a l St a te m e n ts g. B ank L oan s

a . T h e I n co m e S ta t e me n t e. P ro fi tab il i ty V s Li qui di ty V s So lv en cy
4 - In ve st men t A nal y si s
b . T h e B a l a n ce Sh e e t
a. A nal y si s of In ve st ment pr o je ct s
c. C a sh F l o w A n a l ysi s
b. Net P re se nt Va lu e ( NP V)
d . T h e n e e d o f f u n d s i n a n y o rg a n i za t i o n
c . In ter n al Rat e o f Re tur n ( IRR)
e . R a t i o A n a l ysi s
4A - Me rg er s & Ac qu is i ti ons ( M& A)
3 - F i n a n ci a l Po l i ci e s
a. Dea l Ob je ct iv es
a . T yp e o f Pr o j e ct s b. Con ce ptu al F r ame wor k
b . C h o o si n g b e t w e e n C a p i t a l a n d /o r D e b t c . T oo ls & P ro ce ss es
c. So u r ce s o f f i n a n ci n g 5 - T oo ls t o A nal y ze B us in es s Mode ls
a. Capital a. S WO T / P ES T A nal y si s
b . Se l f - F i n a n ci n g b. B us in es s Mode l Canv as
c. Ve n t u re C a p i t a l 6 - Con tr ol a nd Fi na nc ia l Man age ment
d . Sh o r t t e rm F i n a n ci n g a. Wh at is i t? How im por ta nt is i t in or g ani z ati on s?

e . L o n g te r m Fi n a n c i n g b. Wh at do we u nde r st and fo r F in anc i al Ac c oun ti ng?

f . G ra n t s c. Ma nag emen t a nd Bu dge tar y Mo ni tor i ng

d. F i nan ci al Re por ti ng
g . R e t a i n e d P ro f i ts
a. E nte rp r is e Res our c e P l ann in g ( E RP)
b. K ey Pe r for ma nc e I ndi c ato rs ( K PI s)
Gestión Financiera
General Information

EVALUATION METHODOLOGY

• Quizzes (4 Quizzes) 25%

• Wr itten test
• Continuous Evaluation (5 Assignments) 20%
• C ases, deli very and exposure of individual and group assignm ents, etc.
• Teacher´s Evaluation 5%
• % of part icipation of each student
• Final Exam 50%
• Presentati on of group pr oject and fi nal written exam

The fi nal grade can not be low er that 4 points out of 10 point s in order to pass the cour se.
Gestión Financiera
Group Assignments
Introduccion
1.a Financial Management (pg. 1 /2)

• “Financial management refers to the

efficient and effective management of
money (funds) in such a manner as to
accomplish the objectives of the
organization”

• “The Chief Financial Officer (CFO) is in

charge of a company's financial
operations. This includes responsibility The CFO agenda -
for internal and external financial Roles & Responsibilities
reporting, stewardship of a company's 1. Taxation & Regulatory
assets, and ownership of cash 2. Governance, Risk, Compliance
3. Managing Capital
management. Increasingly, the role is
4. Financial Reporting & Accounting
more forward-looking and expanding to 5. Cybersecurity, Digital & Analytics
incorporate strategy, operations, 6. Talent Management
7. Efficiency & Performance Improvement
performance and business partnership. 8. Funding for Growth
 Introduction
1.a Financial Management (pg. 2/2)

The scope of financial management includes the following Five A´s according to Dr. S. C. Saxena:

➢ Anticipation: Financial management estimates the financial needs of the company. That is, it finds out
how much finance is required by the company.

➢ Acquisition: It collects finance for the company from different sources.

➢ Allocation: It uses this collected finance to purchase fixed and current assets for the company.

➢ Appropriation: It divides the company’s profits among the shareholders, debenture holders, etc. It
keeps a part of the profits as reserves.

➢ Assessment: It also controls all the financial activities of the company. Financial management is the
most important functional area of management. All other functional areas such as production
management, marketing management, personnel management, etc. depends on Financial
management.
Introduction
1.b The relationship between Accounting and Finance

Accounting Finance
The systematic and comprehensive recording of Finance seeks to maximize the value of the
financial transactions pertaining to a business, and it company and therefore, the wealth of the
also refers to the process of summarizing, analyzing shareholders.. Finance allows for decision
and reporting these transactions to oversight making, as it describes the management, creation
agencies and tax collections entities by generating and study of money, banking, credit, investment,
reports such as the Balance Sheet and the Income assets and liabilities that make up the financial
Statement. systems / instruments.

- Treatment of Funds / Tratamiento de fondos - Decision Making / Toma de decisiones

In small companies, accounting and finance are usually manage by the same person. However, in
middle or large companies, the accounting manager usually reports into the financial manager or CFO.
Introduction
1.c The Essence of Finance

What you need to buy

How to get the money

Manage the assets

Introduction
1.d Corporate Finance

Corporate
Finance
Introduction
1.e Role of the CFO

Role of the CFO

“The Chief Financial Officer (CFO) is in

charge of a company's financial
operations. This includes
responsibility for internal and external
financial reporting, stewardship of a
company's assets, and ownership of
cash management. Increasingly,
the role is more forward-looking and
expanding to incorporate strategy,
Legal, Operations, performance and
business partnership¨.
Introduction
1.g The planning process (pg. 1 /2)

- Fi nan cial pl ann ing is th e ta sk of de term ini ng ho w a bu sin ess w ill affo rd to
ac hie ve its st rate gic go als an d ob jec tive s

- P rop er Fi nan cial M ana gem en t is ke y to en sur e th e liq uid ity an d ac ces s to
fin anc ial re sou rces in th e co min g ye ars , to en sur e fin anc ial co st op tim izat ion
an d to he lp bo ost th e co mp any ´s so lve nt gr owt h.. ”

I n a ny p l an n in g p r oc e ss , t h e v ar i a nt o f t i m e i s v er y i m p o r ta n t :

• L on g - t e rm P la n ni n g o r S tr a t eg i c P la n ni n g : 3 t o 5 y ea r s

• S ho r t - t e rm P la n ni n g or S ho r t- t e rm B ud g et P la n ni n g :
B el o w 1 y ea r Planificar no es
“adivinar” el futuro. La
• I m m ed i at e P la n ni n g : In the “near future” planificación supone
“d i s e ña r ” el futuro de
la empresa,
estableciendo las
actuaciones necesarias
para cumplir los
objetivos
Introduction
1.g The planning process (pg. 2 /2)
The Financial Planning activity involves the following tasks:

• Assess the business environment

• Confirm the business vision and objectives
• Identify the types of resources needed to achieve these objectives
• Quantify the amount of resource (labor, equipment, materials)
• Calculate the total cost of each type of resource
• Summarize the costs to create a budget
• Identify any risks and issues with the budget set.

“The more that you plan, the lower the risk.”

Introduction
1.i The risk in the enterprise (pg. 1/4)

Attitude towards Risk:

• Risk Aversion - Aversión al Riesgo

• Indifference to the risk -Indiferencia al Riesgo
• Acceptance of risk - Aceptación del Riesgo

“There is no investment without risk, although some products have more risk
than other”

“Risk is the possibility of:

• Unfortunate occurrence
• Possibility of loss
• A variation in the possible outcome
• Greater the accuracy with which the outcome can be predicted the
lower is the risk
 Introduction
1.i The risk in the enterprise (pg. 2/4)

• Balance Sheet Structure

• Capital Adequacy
• Market Risk Finance
• Liquidity Risk
• Credit Risk

• Strategic Risk
• Political Risk • Failure in internal controls
• Banking Crisis • Process Failures
Global RISK Operational
• Catastrophic Risks • Technological Risk
• Uncertain/non-expected Events • Legal Risk
• Fraud and Mismanagement

Economic • Macroeconomic policy risk

• Economic contingencies
Introduction
1.i The risk in the enterprise (pg. 3/4)
Introduction
1.i The risk in the enterprise (pg. 4/4)

“Insurance is a means of protection from financial loss. It is a form of risk

management primarily used to hedge against the risk of a contingent, uncertain loss.”

Most important Business Insurance:

• Product Liability
• General Liability
• Professional Liability
• Commercial Property
• Commercial Auto
• Political Risk
• Contingent Business Interruption
• Kidnap & Ransom
• Health Insurance
Introduction
The risk in the enterprise
EXERCISE I (Group): Insurance

Exercise I: Divide the class in 6 teams, Each team will have to define the type of
business insurance included in your designated team below. Additionally, provide two
specific examples of each type of insurance.

Required: Each team will have to present in a PowerPoint format (No more than 1 page
per concept) to the rest of the class the following: 1) the definition of each concept; 2) the
two examples per concept.

Group I Group 3 Group 5

• Product Liability • Political Risk • Pet Insurance

• General Liability • Kidnap & Ransom • Disability Insurance
• Professional Liability • Health Insurance • Key Personal Insurance

Group 2 Group 4 Group 6

• Commercial Property • Life Insurance • Directors & Officers Liability

• Commercial Auto • Travel Insurance • Cyber Liability
• Contingent Business Interruption • Credit insurance • Business Interruption
Introduction
1.i The risk in the enterprise
Business Continuity Planning (BCP)

Business Continuity Planning (BCP) is the process of creating systems

of prevention and recovery to deal with potential threats to a company.

Step 1: Risk Identification

The risk identification process

allows us to identify risks that may
prevent us from getting the
strategic objectives of the
company. An example of how to
categorize these risks is:

Step 2: Determine the continuity strategy for each risk identified in the previous phase.
 Introduction
The risk in the enterprise
EXERCISE II (Group): Business Continuity Planning (BCP)

• Step 1: Come up with a business proposal for each group. You will develop your business during
the semester applying different concepts discuss in class (Cash flows, BCP, financial statements,
etc.).

• Step 2: Create the risk identification matrix as stated in the previous page with the 3 major risk
associated to your business.

• Step 3: Determine the continuity strategy for each risk identified in your company (risk 1, risk 2
and risk 3).

• Step 4: Be ready to present to the class the risk matrix and your BCP strategy towards those risk.