Penn Finance 100 - Financial Power

Penn Finance 100 is a foundational course at the University of Pennsylvania’s Wharton School designed to provide students with a comprehensive introduction to core financial concepts and principles. It serves as a gateway to more advanced finance courses and is often a required course for those pursuing a concentration or major in finance, accounting, or related fields. The course covers a wide range of topics, starting with the basics of financial accounting, including the analysis and interpretation of financial statements such as the balance sheet, income statement, and statement of cash flows. Students learn to assess a company’s financial health, performance, and risk profile by scrutinizing these statements. A significant portion of the course focuses on time value of money and capital budgeting. Students delve into concepts like present value, future value, discounting, and compounding, essential for evaluating investment opportunities. They learn how to apply these concepts to assess the profitability and feasibility of capital projects using techniques like Net Present Value (NPV), Internal Rate of Return (IRR), and payback period. Another key area explored in Finance 100 is the pricing of financial assets, particularly stocks and bonds. Students learn about different valuation models, including discounted cash flow analysis, relative valuation, and the Capital Asset Pricing Model (CAPM), which links risk and expected return. Understanding these valuation techniques is crucial for making informed investment decisions. Risk management is also addressed, with students introduced to various types of financial risks and strategies for mitigating them. This includes understanding concepts like volatility, diversification, and hedging. The course emphasizes practical application. Case studies, problem sets, and real-world examples are extensively used to reinforce theoretical concepts and develop students’ analytical and problem-solving skills. Students often work in teams to analyze complex financial scenarios and present their findings. Beyond the core curriculum, Finance 100 aims to develop students’ understanding of the broader financial landscape, including the role of financial institutions, capital markets, and regulatory bodies. Guest speakers from the finance industry often share their insights and experiences, providing valuable real-world context. Ultimately, Penn Finance 100 equips students with a solid foundation in financial principles and analytical tools, preparing them for further study in finance, careers in the financial services industry, and informed decision-making in their personal and professional lives. The course’s rigor and focus on practical application make it a valuable stepping stone for aspiring finance professionals.