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Bio Overview Help Prerequisites Materials Assignments Grading Schedule

Overview

Visit http://www.dangode.com/essentials/ for an up-to-date version of this web page.

 

If you have questions about whether this course will count towards university credit, please contact university.programs@nyu.edu.

 

This course is for rising high school juniors and seniors. You need business and financial skills in your personal life as well as your professional life. In your personal life, you have to understand the trade-offs consumption and savings, the time value of money, and the trade-off between risk and return. In your professional life, your responsibilities for business and financial management grow as you rise in an organization or your business expands. Most high school curricula do not prepare students for these essential life skills.

 

This course covers three critical areas: personal finance, business planning, and capital markets. It also teaches life lessons about understanding how and why career choices affect financial outcomes. Here is a broad overview of the topics and tools covered in the course:

Prerequisites

Help and Office

Materials

Assignments

Grading

Students will be evaluated as follows:

Schedule

Section 60 meets in the afternoon from 1 PM to 4:10 PM.

Class Topic
1. Monday, July 8 Personal finance: Time value
  • Why is there a time value of money
  • How do current cash balance grow at a compounded rate into the future
  • Computing future value of current cash flows using compounding
  • Computing present value of future cash flows using discounting
  • What is the difference between Annual Percentage Rate and Annual Percentage Yield. Why do banks and credit card companies quote one versus the other?
2. Wednesday, July 10 Personal finance: Borrowing money
  • What are the good reasons for borrowing money? What are some of the bad reasons for borrowing money? How can one avoid having unbearable debt by ensuring that the borrowing is only for investment not consumption?
  • Why is making a budget important to staying within ones means? What are the elements of a budget? How does it aid in planning personal finances?
  • How do the following loans work? How should one avoid being ripped off by them?
    • Credit cards (and how they differ from debit cards)
    • Student loans
    • Store loans
    • Car loans
    • Mortgages
  • How does one prepare a table showing when and how much will a loan be paid off?
3. Monday, July 15 Personal finance: Risk versus return of various investments
  • How do stocks differ from bonds? Which one is riskier? Why?
  • What are bonds? What do face value, coupon rate, maturity mean? What is the difference between coupon rate versus yields? What is the difference between face value versus price?
  • What are common shares? How do they differ from preferred shares?
  • What does expected return mean? For stocks, what is difference between capital gains and dividend yields? For bonds, what is the difference between capital gains and interest yield?
  • How is risk measured? What is the difference between default risk and inflation risk?
  • Why is there a connection between risk and expected return?
  • What kind of risk is rewarded with higher return? What kind of risk does not matter?
  • Why is hard to make money in financial markets? How do expectations affect prices?
4. Wednesday, July 17 Business plans and models: Understanding how businesses make money
  • What is the difference between Income flows versus cash flows?
  • Why are some cash flows never income flows?
  • Why do some cash flows differ in timing from income flows?
  • What do terms such as margins, gross profit, EBITDA, EBIT, and net income mean?
5. Monday, July 22

Business plans and models: Understanding why businesses need money

  • How does the time lag between spending cash and receiving cash drive the need for money?
  • What are different types of assets and liabilities?
  • How do businesses raise money?
  • What is the difference between raising money from lenders versus shareholders?
6. Wednesday, July 24

Business plans and models: Size, growth, and margins

  • What are the benefits and challenges of running a big business?
  • What are economies of scale and economies of scope?
  • What are the challenges of growing a business?
  • How do pricing power, operating efficiencies, and buying power affect margins?
7. Monday, July 29

Business plans and models: Assets needed and liabilities available

  • How does the difference between revenues and receipts gives rise to receivables and advances?
  • How does the difference between expenses and payments gives rise to prepayments and payables?
8. Wednesday, July 31

Business plans and models: Free cash flow generation

  • How do net assets affect cash flow generated and funding needed?
  • What do terms such as working capital, fixed capital, and invested capital mean?
9. Monday, August 5

Business plans and models: Business risk and the uncertainty of cash flows

  • What drives business risk?
  • How does business risk affect borrowing capacity?
10. Wednesday, August 7

Business plans and models: Financial risk, leverage, liquidity

  • Why do some businesses have more debt than others?
  • How does leverage amplify risk?
  • How does liquidity mitigate risk?
11. Monday, August 12

Capital markets: Public offerings and secondary markets

  • Who runs a company? What do boards of directors, CEO, CFO, and COO do?
  • What are initial public offerings? What are secondary offerings? What do investment bankers do?
  • How companies report their financial results to investors? What is an annual report? What is a 10K? What is a 10Q? What is a prospectus?
  • Why are financial reports audited? Who audits them? Who sets the rules that financial reports must comply with?
  • What is the price earnings ratio? What is market-to-book ratio?
12. Wednesday, August 14
  • Exam