Financial Management (504-610)
by
Dr.Sahanon Tungbenchasirikul
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Copyrights
With regard to Copyright Act B.E. 2537 (1994):
• All elements in the presentation (i.e., words, clauses,
sentences, pictures, symbols, tables, and trademarks) are
obtained from textbooks, academic journals, websites, and
other sources of knowledge. These have been claimed to
have copyrights.
• The presentation is solely used for academic, not for any
commercial, purposes.
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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My Short Biography
Work Experience
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DGM (Strategic Planning Manager), Thai Smartcard Co. Ltd., a subsidiary of CPALL
Group, 2011 - Present
AVP (Client Strategy Manager) SCB Plc., 2008 - 2011
AVP (Corporate Planning) TMB Bank Plc., 2006 - 2008
Analyst, Management Solutions International Ltd., a subsidiary of TEAM Group of
Companies, 2005 - 2006
Education Background
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PhD (Business Administration), University of Manchester, UK, 2005
M.A. (Economics), University of Manchester, UK, 2000
M.A. (Business Economics), Chulalongkorn University, 1999
B.Sc. (Economics), Kasetsart University, 1998
E-mail: s_tungbenchasirikul@hotmail.co.uk ; Tel: 086-668-7786
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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General Discussion Topics
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Course Objectives
Study Overview (see details in the course syllabus)
Lecturer-Student Agreement
Mark Allocation and Grading Policy
Brief: Group Assignments
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Course Objectives
• To provide financial management understandings in both
theoretical and practical aspects.
• To demonstrate how to apply financial management
concept to explain real business situations and solve
problems.
• To enable students to enhance their analytical skills,
judgments, and constructive comments by reading actual
business and financial reports, and in turn undertaking
group assignments.
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Lecturer-Student Agreement
• Keen to share ideas and participation.
• Respect lecturer and other classmates; we do not tolerate
offensive behavior.
• If you don’t understand, feel free to ask me; don’t be
quite.
• No silly question, every question is counted.
• Read guidelines carefully, when you undertake group
assignment, and write a report.
• While you concentrate on getting MBA, you must learn
social skills, this is the best moment to do so.
• 3Cs for Group Report = Cooperation, Creativity, and
Contribution.
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Mark Allocation and Grading Policy
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Group Presentations (2 Sessions)
Class Participation
Take-Home Exercises (2 Times)
Final Exam
Total
Final Examination
• Answer as many questions as you can
• Closed book examination!
• Allow to take two A4-paper shortnotes
with you in the examination.
• Cheating means you fail the course (F).
Financial Management by Dr. Sahanon Tungbenchasirikul ©
40 Marks
15 Marks
10 Marks
35 Marks
100 Marks
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Grade
Grade
Grade
Grade
Grade
Grade
Grade
A  85 or Above
A-  80 – 84
B+  75 – 79
B  70 – 74
B-  65 – 69
C+  60 – 64
C  55 – 59
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Part 1 - Basic Practices
• Financial Environment
• CFO Roles
• Financial Statement Analysis
• Financial Planning
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Part 2 - Financing
• Capital Structure Decision
• Debt Financing
• Equity Financing
• Dividend Decision
• Working Capital Management
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Part 3 - Valuation
• Risk and Return
• Time Value of Money
• Cost of Capital or Required Rate of Return
• Asset Price Valuation
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Part 4 - Investment
• Analysis of Project Feasibility
• Capital Budgeting: Cash Flow Evaluation
• Cash Flow Estimation
• Project Risk Evaluation
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Group Presentation
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Brief: Group Presentation
IMF has claimed that world economy already passed the global
economic crisis and, will gradually recover from 2010 onwards.
Evidence has displayed that various economic regions (e.g.
USA, Asia-Pacific, ASEAN) overcome financial crisis and eye on
economic growth. However, governments across the world still
keep expansionary monetary policy and deficit fiscal policy not
only to stimulate consumption and investment, but also to
avoid repeated economic recession. Likewise, various nations
(e.g. Malaysia, Singapore) boost their financial sector strengths
and competitive advantages of business sectors. It is evident
that a number of listed companies in Stock Exchange of
Thailand experienced Sub-prime crisis, but they still enjoy
good financial performances. This indicates the company’s
long-term competitive advantages.
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Brief: Group Assignment (Cont.)
Students are required to select one of the following listed
companies (Page 15), and in turn conduct the analysis and
presentation. It is recommended that students should read the
company’ annual report or Disclosure Form 56-1 for at
least 3 years (2010-2012) to understand its overall
management and business scope as well as other key
information, which are useful for completing group
assignment. Generally, students can download annual reports
from the company websites or access via Stock Exchange of
Thailand website (www.settrade.com).
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Brief: Group Presentation (Cont.)
Requires each group to choose one of the following listed
companies:
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ADVANC (Advance Info Services Pcl.)
BANPU (BANPU Pcl.)
BH (Bumrungrad International Pcl.)
BIGC (Big C Super Center Pcl.)
CPALL (CPALL Pcl.)
EGCO (Electricity Generating Pcl.)
LH (Land & House Pcl.)
MAKRO (Siam Makro Pcl.)
MINT (Minor International Group Pcl.)
PS (Pruksa Real Estate Pcl.)
PTT (PTT Pcl.)
SCC (The Siam Cement Pcl.)
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Group Presentation - #1
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Summarize the company’s business scope: your team need to displays its product
lines and existing customer markets.
Identify and provide the evidence of external business factors (e.g. crude oil price,
political situation), which negatively/positively affect the company’s business
operations and performances.
Conduct financial statement analysis distinguished into four groups of financial
ratio (i.e. liquidity, efficiency, profitability, and financial leverage ratio) during
2010-2012 period. In turn, your team is required to give the outlook of financial
performance.
Explain how financial market and financial institutions can support the firm’s
financial needs, and in turn, business operations.
15 Marks
Presentation Date: Week 8
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Group Presentation - #2
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With regard to Annual Report or Disclosure Form 56-1, your team needs to
concisely summarize: (1) the Company’s Corporate Plan from 2010-2012 and
create (2) the Company’s Future Corporate Plan in 2013-2014.
Your team has to conduct Financial Statement Projection for two years (2013 2014) with the following assumptions:
– 2013-2014 investment projects are financially sound (NPV > 0 and good IRR).
– The Company Revenue increases 10% for two years (2013 - 2014) and other items in
Profit and Loss Statement increase in the same proportion (Common-Sized Increase),
– In Balance Sheet, inventory and account receivable increase 10%, account payable
increase 10%.
– Your team should add some assumptions to make the balance of three Projected
Financial Statements (Profit & Loss Statement, Balance Sheet, and Cash Flow
Statement).
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With regard to the Company’s Future Corporate Plan in 2013 - 2014, your team
must illustrate: (1) capital structure (Leverage, Debt:Equity) and (2) debt and
capital financing instruments and plans.
25 Marks
Presentation Date: Week 12
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Group Presentation - #2
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Explain whether or not the Company can gain the efficiency of working capital
management during 2010-2012 (short-term financial needs and cash conversion
cycle). If your team is assumed to be the Company’s CFO, what you intend to
do to improve working capital management in 2013-2014.
25 Marks
Presentation Date: Week 12
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Take-Home Assignments
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Take-home Assignment 1 (Total 5 Marks)
Answer questions 1 - 4
1. Capital Structure
Discuss: Do you agree with the claim that firms in different industries have different
capital structures? (Hint: you should employ capital structure flowcharts and
diagrams to compare capital structures of firms from different industries).
2. Current Asset Management
Situation: Andrews Winters is interested in studying the frameworks of current
asset management of three different industries, namely, retail modern trade,
construction, and car manufacturing. Can you display diagrams, which reflect such
frameworks, and provide the concise summaries.
Submission Date: Week 6
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Take-home Assignment 1 (Continue)
3. Operating Leverage
Discuss: Robert Donovan and his associates are interested in acquiring a company
either a large modern trade store with low operating leverage or a car engine
producer with high operating leverage. They appoint you to be their financial
advisor to explain the impacts of operating leverage on profitability of both modern
trade store and car engine producer (Hint: you should explain with regard to
different business scenarios).
4. Cash Conversion Cycle
Discuss: Nicolas Taylor, the Chairman of the Zoo and Amusement Park Company,
has appointed Kimberly Summers to be chief financial officer (CFO) since January
2013. He requires Kimberly to explain cash conversion cycle to junior financial
officers in the Company (Hint: you can use flowchart to support your explanation).
Submission Date: Week 6
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Take-home Assignment #2 (Total 5 marks)
Answer question 1 - 4
1. Common Stock Valuation
Situation: Richard Tailor is interested in finding the value of a corporate common
stock that he recently purchased. The newly issued common share displays 1,000 /
share (P = 1,000) and pays dividend 150 annually for 30 years. Another common
share of similar risk has a 12% required annual rate of return or discounted rate.
What is common stock value (VS)?
2. Corporate Valuation
Situation: Serena Lewis, the owner of a second-hand car company, is interested in
evaluating the value of her company operations. She projects the free cash flow for
the future 5 years as follows: 1,115, 1,250, 1330, 1,345, & 1,360 (i.e. FCF1 - FCF
5). She calculates weight average cost of capital (WACC) of her company for 8%.
What is her corporate value (VOP)?
Submission Date: Week 11
Financial Management by Dr. Sahanon Tungbenchasirikul ©
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Take-home Assignment #2 (Continue)
3. Weight Average Cost of Capital (WACC)
Situation: Brian Bishop invests in 12 fast food restaurants in Bangkok. He has a
target capital structure that the ratio of debt, preferred stock, and common stock is
30%, 30%, and 40% respectively. The bankers expect Brain to pay interest for
6.5% per year and tax rate equals 30% of profit. Preferred stockholders expect
Brian to provide dividend of 8.5% per year. Common shareholders request Brain to
pay dividend of 7.5% per year. What is WACC?
4. Principles of Project Feasibility
Discuss: Eddy Kohler is an investor, who is interested in bidding for a new copper
mining project in Mexico. He wants to win a 15 year gold mining concession from
South African government, and in turn, hires a financial consultant team (you are
also in this team) to conduct project feasibility study. He asks you to summarize
key principles of project feasibility with concise details.
Submission Date: Week 11
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