Business Finance

Course Description:

Business Finance is the introductory course of Finance in the BBA and MBA programs. Its main objective is to give students a comprehensive overview of how finance play role in valuation of financial products. It has been designed to equip students with the basic tools and techniques necessary to be a successful financial manager or a non-financial manager with a good understanding of the basic principles of finance.

Learning Outcomes:

  • Develop awareness of the responsibilities of a financial manager while acquire the skills necessary to analyze typical business situations from a financial perspective
  • Understand finance as part of the overall strategy of the firm
  • Understand the foundations of valuation, its basic concepts and terminologies
  • Ability to value real projects and financial instruments like bonds and stocks.
  • Ability to assess drivers of corporate performance
  • Knowledge and understanding of shareholders value creation

Recommended Text Books:

#               Title Author(s) Assigned Code
1 Principles/Fundamentals of Corporate Finance Richard A. Brealey

Stewart C. Myers

 

FCF
2 Fundamentals of Financial Management

 

James C. Van Horne, John M. Wachowicz, Jr FFM

Discussion Plan

Session Topics Assigned code
Week 1

 

An overview of the course its requirements and expectations

Concept of corporation, financial manager, and their goals

FCF
Week 2 Financial markets and Institutions

Importance of financial matters, functions of financial markets and intermediaries, value maximization

 

FCF
Week

3 – 4

 

Time value of money

Present value, future value, interest rate findings, perpetuities and annuities, Inflation and time value of money

 

FCF
 

 

 

Week

5 – 7

Valuing Bonds

Bond characteristics, interest rate and bond price, current yield and yield to curve, bond rates and returns

 

FCF
Valuing Stocks

Stock and stock markets, Book value, liquidation value & market value, valuing common stocks, DDM, Growth Vs Income stocks

 

 

FCF

 

Week 8 Net Present Value

Risk and present value, valuing long lived projects, Using NPV to choose among projects

 

FCF

 

Week 9

                                          

                                                   Mid Term Exam
Week 10 Internal Rate of Return

·         How to calculate IRR?

·         Mutually exclusive projects

·         Capital Rationing

 

FCF
Week 11 Accounting and Finance

·         Balance Sheet

·         Income Statement

·         Cash Flows

 

FCF
Week 12 Working Capital Management

Issues

Short Term & Long Term assets mix

Liability structure & current asset decision

 

FFM
Week 13 Cash & Marketable Securities Management

·         Motives for holding cash

·         Cash balance to maintain

·         Investment in Marketable Securities

 

FFM
Week 14 Account Receivable & Inventory Management

·         Credit & collection policies

·         Inventory management & control

 

FFM
Week 15 Short Term Financing

·         Spontaneous financing

·         Negotiated Financing

·         Factoring Account receivables

·         Composition of short term financing

 

FFM
Week 16                                                          Final Exams

© 2017. ALL RIGHTS RESERVED. THE UNIVERSITY OF FAISALABAD.