business finance outline

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Bahr ia University(Islamabad Campus) Department of Management

Sciences

(Graduate Studies)

Course Title:

Business Finance

CATALOGUE DESCRIPTION

Credit Hours: Three (3) Class: MBA

Semester: 2nd Semester Section: A & B

Instructor: Annam Ahsan

COURSE DESCRIPTION

Business Finance is an introductory course in financial management. This course introduces thestudents to the fundamentals of business finance. The course requires an understanding of basicmathematical and economic concepts as well as accounting principles. Business Finance seeks tobuild a theoretical foundation and practical understanding for framing and analyzing financialdecisions within firms.

The course will aim to touch upon as many different facets of business finance as possible. Thestudents will gain an appreciation of the financial context within which personal and businessdecisions are based. They will be able to distinguish amongst the different areas of finance and weighwhat factors and issues need to be addressed in each. By the time the course is complete, the studentsshould have a basic understanding of most major financial decisions of a business.

COURSE OBJECTIVES

The main objectives of this course are:

To introduce the basic concepts and theories of financial management. To develop an appreciation for the usefulness of these theories for financial decision-making. To develop the student's financial decision-making skills.

COURSE OUTCOMES

Through a combination of readings, lectures, class discussions, and problem assignments, studentswill:

Achieve an understanding of the role of the financial manager. Understand the financial environment in which business decisions are made. Understand and apply basic time value methodology to general valuation cash flow

applications. Develop a knowledge of Bond & Stock valuation and analysis techniques Gain an awareness of the investing and financing alternatives available to the firm. Interpret the Financial Ratios of a firm Be able to use Capital Budgeting Techniques (NPV & IRR) for evaluating Capital

investments & selecting the most feasible.

TEXT BOOKS (S) AND REFERENCES

1 Fundamentals of Financial Management (10th Edition) by Eugene F. Brigham and Joel F. Houston

2 Fundamentals of Financial Management (11th Edition) by James C.Van Horne

3 Principles of Managerial Finance (11th Edition) by Lawrence J. Gitman.


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ASSESSMENT EVALUATION

Students assessment will be based on their ability to demonstrate their understanding of the conceptsand theories learnt in the course. Students will be evaluated on the basis of a demonstration of theirability to forecast the financials, do break-even analysis, and valuation of a new venture. They will be

required to show skills to develop a complete business plan.

ITEM ASSESSMENT TASK WEIGHT TOTAL MARKS

1 Final Examination 40% 40

2 Mid-Term Examination 25% 25

3 Quizzes 15% 15

4 Final Project 10% 10

5 Individual Assignments 10% 10

GRADE: SCORES OBTAINED:

A 87 %

B + 8086 %

B 7279 %

C + 6671 %

C 6065 %D 5059 %

F 50 %

TEACHING METHODOLOGY

The teaching methodology for this course will primarily be lecture based, with significant classinteraction. However, this method will be supplemented with a range of other teachingmethodologies as well.

Mini Cases/Readings to be used as class readings as well as assignments Project/Case study Analysis Question Practice Sessions Quizzes, both announced and unannounced.Attendance:Minimum 75% attendance is required. This is student responsibility to follow up on what they mayhave missed due to absence from a teaching session through interaction with fellow students whoattended the class.

Late Submission:There will be no retake of a quiz that a student misses. Late submission of assignments and caseanalysis is discouraged and will be penalized by 10% of the assigned marks for each day of late

submission.


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Dishonest Practice and Plagiarism:Students are expected to avoid plagiarism. Plagiarism involves to claim some one else work as ones

own. The fact that a student might do it unintentionally still constitutes plagiarism and hence is strictly

prohibited. Students are expected to take reasonable care to ensure originality of their work. Theexistence of plagiarism will result in zero marks on the assignment and will be notified to Head ofDepartment for further disciplinary actions.

COURSE CONTENTS / SYLLABUS BREAKDOWN IN LECTURES

Week Topics

1 Introduction

What is Finance Definition of FM Goals of FM Importance of FM

Goals of the Firm Legal Forms of Business Organization Advantages & Disadvantages of Each Form

2 Fi nancial Environment

The Tax Environment Corporate & Personal Income Tax Financial Markets & their Purpose Primary & Secondary Markets Money & Capital Market Cost of money and determinants of interest rate

3 Time Value of Money

Compounding and Discounting Simple & Compound Interest Time Lines Present Values & Future Values Nominal & Effective Interest Rate

4 Time Value of Money

Ordinary Annuities & Annuities Due Perpetuities Mixed Cash flow Streams Amortization of Loans

5 Bond Valuation

Key Features of Bonds Types of Bonds Bond Valuation Measuring Yield Assessing Risk

6 Common Stock Valuation

Legal Rights & Privileges of Common Stockholders Types of Common Stock Types of Stock Market Transactions Common Stock Valuation P/E Multiplier Approach Dividend Models

7 Preferr ed Stock Valuation

Legal Rights & Privileges of Preferred Stockholders Features of Preferred Stock Holders Preferred Stock Valuation


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(Graduate Studies)8 Financial Statements; I ntr oduction and Analysis

Overview of Financial Statements Purpose of Financial Statements Types of Financial Statements Cash Flow Statement

9 Risk and Rates of Return

What is risk What is return Risk of a single asset Risk of a Portfolio Relationship between risk and return

10 Capital Budgeting Techniques

Introduction to Capital Budgeting Payback Period Net Present Value

11 Capital Budgeting Techniques Internal Rate of Return Project Evaluation & Selection Practice Session Quiz

12 Worki ng Capital M anagement

13 Cost of Capi tal

Concept of weighted average cost of capital Cost of debt, cost of preferred stock, cost of retained earnings, cost of new

common stock

Calculation of weighted average cost of capital14 Ratio Analysis

Liquidity Ratios

Leverage Ratios Efficiency Ratios Profitability Ratios Equity Ratios

15 Presentations

16 Revision

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