Financial Operations

In order to maximise student participation in class and in the learning process, classes include the following teaching-learning
methodologies: (i) expository, to present the theoretical frameworks of reference; (ii) participatory, with analysis and resolution of practical
exercises; (iii) active, with individual assignments.
In order to increase student involvement with the course and self-study, the inverted classroom method will be adopted whenever
appropriate, as we believe is the case with ‘COMPANY FINANCING’. To this end, students are given individual assignments to critically
evaluate the banking offer available on the portuguese market.

The objectives of the Course Unit (CU) are:
LO1 – Explain the concepts of financial time value, discounting and capitalisation;
LO2 – To be able to convert an annual rate into a periodic interest rate, in nominal and effective terms;
LO3 – Be able to calculate financial flows from investment and financing operations;
LO4 – Be able to break down an instalment into principal and interest and make loan repayment plans;
LO5 – Equip students with the knowledge to renegotiate debt services.
By the end of the course, students should have developed the following competences:
1. Apply the concepts of discounting and capitalisation;
2. Master the diversity of interest rates;
3. Characterise the types of financial income;
4. The ability to renegotiate debt services;
5. Characterise the different types of short, medium and long-term financing and the ability to choose between them according to the
financial rationale.

1. CAPITALISATION AND DISCOUNT OPERATIONS
1.1 Simple interest and compound interest
1.2 Compound discount
2. INTEREST RATES
2.1 Proportional and equivalent rates
2.2 Nominal and effective rates
2.3 Average application rate
3. EQUIVALENCE OF CAPITALS
4. FINANCIAL ANNUITIES
4.1 Concept, characteristics and classification
4.2 Constant-term amortisation yields
4.3 Constant-term accumulation annuities
4.4 Early and deferred annuities
5. COMPANY FINANCING
5.1 Factors to consider when choosing a source of finance
5.2 Characterisation of the main sources of short-term finance
5.2.1 Factoring
5.2.2 Secured Current Account
5.2.3 Bank overdraft
5.2.4 Confirming
5.3 Characterisation of the main sources of medium and long-term financing
5.3.1 Classic loans
5.3.2 Financial leasing operations
5.4 Determining the cost of financing sources

NAO