Sukatan pelajaran kursus_bwff1013 - Basic Finance


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Sukatan pelajaran kursus_bwff1013 - Basic Finance

  1. 1. UNIVERSITI UTARA MALAYSIA COLLEGE OF BUSINESS FIRST SEMESTER SESSION 2012/2013 (A121)COURSE CODE : BWFF1013COURSE NAME : FOUNDATIONS OF FINANCEPREREQUISITE : NIL 1.0 SYNOPSIS This course will provide an initial exposure on the principal of foundations of finance, which is needed by all types of businesses. The topics discussed include financial statement analysis, the concept of time value of money, the concept of risk and return, and stock and bond valuation. Cost of capital and capital budgeting techniques are also discussed in this course. Apart from that, short term financial planning and cost of capital management are also included for discussion. 2.0 OBJECTIVES Upon completion of the course, the students are expected to 2.1 understand the objectives of firms and the nature of businesses. 2.2 understand the underlying concepts and theories related to foundation of finance. 2.3 acquire knowledge of financial tools and techniques to solve appropriate hypothetical and real world problems. 3.0 LEARNING OUTCOMES Upon completion of the course, students will be able to 3.1 identify the goal of the firm and distinguish the various legal forms of business organization. (C2, P1, A3) 3.2 apply financial ratio analysis to evaluate a company’s performance. (C3, P2, A2) 3.3 define the significance of time value of money in financial management. (C1, P1, A2) 3.4 explain the concept and purpose for its calculation in risk and return, stock and bond valuation, and cost of capital. (C2, P2, A2)
  2. 2. 3.5 differentiate various decision making techniques for both short term and long term financial planning. (C4, P1, A3)4.0 REFERENCES Main Reference: Keown, A. J., Martin, J. D., & Petty, J. W. (2011). Foundations of finance: The logic and practice of financial management (7th ed.). New Jersey: Pearson Education. Additional References: Besley, S., & Brigham, E. F. (2007). Essentials of Managerial Finance, (14rd ed.). Sydney: Thomson/South-Western. Brigham, E.F., & Houston, J. F. (2007). Fundamentals of financial management, (11th ed.). Mason: Thomson/South-Western. Cornett, M. M., Adair, T.A., & Nofsinger, J. (2009). Finance: Applications and theory. New York: McGraw Hill. Gitman, L. J. (2006). Principles of managerial finance (11th ed.). Boston: Pearson Addison Wesley.5.0 CONTENTNO. TOPIC HOUR 1 1.0 INTRODUCTION TO FINANCIAL 3 MANAGEMENT 1.1 Definition of finance 1.2 Roles of financial manager 1.3 Basic forms of business organizations 1.4 Goals of the firm 1.5 Financial markets and institutions
  3. 3. 2. 2.0 ANALYSIS OF FINANCIAL STATEMENT AND 6 CASH FLOW 2.1 Balance sheet 2.2 Income statement 2.3 Cash flow statement 2.4 Financial ratio analysis 2.4.1 Liquidity 2.4.2 Profitibility 2.4.3 Asset Management 2.4.4 Leverage 2.4.5 Market Value 2.5 Limitations of ratio analysis3. 3.0 TIME VALUE OF MONEY 6 3.1 Roles of time value of money in finance 3.2 Future value, compounding and annuities 3.3 Present value, discounting and annuities 3.4 Perpetuities 4. 4.0 RISK AND RETURN 3 4.1 Risk and return concepts 4.2 Risk diversification and portfolio 4.3 Systematics risk and beta (CAPM) 5. 5.0 BONDS AND STOCKS VALUATION 6 5.1 Bond valuation 5.1 Common stock valuation 5.2 Preferred stock valuation 6. 6.0 COST OF CAPITAL 6 6.1 Concepts of cost of capital 6.2 Cost of debt 6.3 Cost of preferred stock 6.4 Cost of common stock 6.5 Weighted average cost of capital (WACC)
  4. 4. 7. 7.0 CAPITAL BUDGETING TECHNIQUES 3 7.1 Introduction to capital budgeting 7.2 Payback period 7.3 Discounted payback period 7.4 Net present value (NPV) 7.5 Profitability index (PI) 7.6 Internal rate of return (IRR) 7.7 Relationship between NPV and IRR 8. 8.0 CASH FLOW IN CAPITAL BUDGETING 3 8.1 Introduction to capital budgeting 8.2 Relevant cash flow 8.3 Initial investment cash flow 8.4 Annual cash flow 8.5 Terminal cash flow 8.6 Decision making in capital budgeting 9. 9.0 FINANCIAL PLANNING 3 9.1 Financial planning process 9.2 Cash planning: Cash budgeting10. 10.0 WORKING CAPITAL MANAGEMENT 3 10.1 Net working capital 10.2 Short term financing 10.3 Short term credit 10.4 Cost of term financing TOTAL 426.0 TEACHING METHOD Lectures and discussions7.0 ASSESSMENT a) Coursework: 60%
  5. 5. i. Quiz 15% ii. Group Project 15% iii. Individual Assignment 5% iv. Participation 5% v. Mid semester Exam 20% b) Final exam 40%8.0 ACADEMIC STAFF 1. Kharul Azhar Bin Ramli Tel: 04-9286423 Room: 022, COB Main Building Email: 2. Mai Syaheera Binti Miau Shaari Tel: 04-9286053 Room: 184, Economic Building Email: 3. Sharmilawati Binti Sabki (coordinator) Tel: 04-9286476 Room: 313, COB Main Building Email: 4. Wan Rozima Binti Mior Ahmed Shahimi Tel: 04-9286473 Room: 238, COB Main Building Email: