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Department of Financial & Management Studies (DeFiMS)

Introduction To Financial Analysis (Preparatory course)

Unit value:

The two pre-sessional courses are Introduction to Financial Analysis and Introduction to Law and Legal Method and these are taught in early September before the formal start of the academic year. Each course is 8-hours per week for three weeks, concluding with a 2-hour examination. Attendance is strongly recommended since the concepts covered in these two courses will be assumed when you begin your degree programme.

The Introduction to Financial Analysis course aims to present the main ideas and methods in mathematics that are used in financial analysis. The course covers functions of one or more variables, financial arithmetic, elements of calculus, mathematical optimisation, and introductory statistics. The emphasis is throughout on the applications of the mathematical concepts to finance. The course presents the main mathematical tools required in the financial courses of the MSc programme.The only prerequisite for this course is a knowledge of elementary algebra.

For the course schedule please see the pdf file on the right-hand side of this page.

The syllabus of the course covers the following topics:

  1. Introduction to financial analysis;
  2. Functions and graphs;
  3. Solving equations;
  4. Exponential and natural logarithms, rates of growth;
  5. Arithmetic and geometric series. Index numbers;
  6. Differential calculus;
  7. Unconstrained optimisation;
  8. Partial differentiation and constrained optimisation;
  9. Introduction to probability theory;
  10. Mean and variance;
  11. Correlation and covariance coefficients;
  12. Applications to financial analysis.

Objectives and learning outcomes of the course

At the end of this course students should be ready to progress onto the MSc in Finance and Financial Law.  They will be able to:

  • Demonstrate familiarity with the main concepts and definitions in financial analysis;
  • Address problems in finance by using mathematical concepts and tools;
  • Interpret the mathematical results in terms of financial analysis;
  • Develop the analytical and diagrammatic skills required for financial analysis;
  • Solve mathematical problems in relation to financial applications.

Method of assessment

This course is assessed 100% by examination only

Suggested reading

  • Mike Rosser, “Basic Mathematics for Economists” (2nd edition), Routledge, 2003
  • Paul Newbold, William Carlson, Betty Thorne, “Statistics for Business and Economics” (7th International Edition), Pearson Education, 2009
  • Richard A. Brealey and Stewart C. Myers, “Principles of Corporate Finance” (9th edition), McGraw-Hill Inc. New York, 2007