Higher Diploma in Business Studies 2012/13
Financial Management I (AY 872)
Welcome to this course in Financial Management.
Lecturer:
Dr. Shammyla Naeem,
Department of Accounting and Finance
Room 346, Cairnes Building. Tel: 091 492309
E-mail: shammyla.naeem@nuigalway.ie
Tutor:
To be confirmed
Course Objectives:
The objective of this course is to develop the participants' understanding of the theory
and practice of Financial Management, and to develop their skills in the application of
this knowledge to financial decision making.
Note for visiting /Erasmus students
You are welcome to take this course if you are visiting for one semester only and if you
need to take an introductory course in Finance. However if you are visiting for the full
academic year, you must take AY208 Business Finance 1 in semester 2. Only 5 credits
in total are available for introductory Finance - either for AY208 or for AY872, but not for
both. If you take both, you will get only 5 ECTS credits.
Course Texts:
Required Text:
McGuigan, Kretlow, Rao & Moyer: Contemporary Corporate Finance
Cengage Learning , 2012 (12th ed, International Edition).
Supplementary Books:
Glen Arnold: Corporate Financial Management
Prentice Hall, 2008 (3rd ed)
Lecture Notes: A course pack containing copies of the class notes will be made
available for purchase from “Print That” located on the concourse. These notes
may be added to or alternative notes used during the semester. You will be
advised in advance during lectures. You should be adequately prepared for
lectures by reading the course material and text book in advance of lectures.
Problem Material: A separate pack of the non-text problem material will also be
distributed containing problems, some with solutions. Solutions are intentionally
not provided and will not be provided for all problems.
Note: you should bring both packs to every lecture as we will use these in class.
Blackboard: Some online course material and class announcements will be
provided on Blackboard. http://blackboard.nuigalway.ie. Please register for this
course on blackboard to ensure you receive all announcements.
Organisation –schedule:
The course will consist of two lectures per week. A workshop session will also be
held once a week. These three hours will be used interchangeably for lectures
and workshop and attendance at all is required for successful course completion.
Course times:
Tuesday 9-11 in Lecture Hall CA116
Thursday 9-10 in (Venue to be confirmed in the class)
The timing of the Workshop hour may change to 6-7pm on Wednesday. This is
dependent on tutor availability and will be confirmed at a later stage in class.
Organisation – approach to study:
The nature of the subject requires active participation in the course. Classes will
be used to review the key issues for the topic in question, and you should study
the assigned readings and lecture notes before class in order to gain maximum
benefit from the lectures.
Problem material is also assigned for each topic. It is important to attempt these
assigned problems to test your understanding of the course material, and to
develop a facility for problem solving. You should review the end-of-book
solutions to the problems indicated for “Review”, and you should prepare
solutions for the additional problems listed in the course outline. Some of these
problems and solutions will be reviewed in class or at workshops. Success in
this course requires active engagement from the outset, both through
attendance and participation. Otherwise it is difficult to catch up later.
Assessment:
The overall marks for this course will be allocated as follows:
End-of-Semester Examination:
MCQ Test 2 (in class week 5)
Interim Examination (in class)
80%
10%
10% (week 9, date to be confirmed in class)
100%
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Course Topics, Readings, and Problems:
1. Foundations of Financial Management
(a) Introduction to Financial Management
Moyer:
Chapter 1; Chapter 6 pp. 272-278.
Review:
Discussion Problems: Moyer:1-1 to 1-7.
Background Reading: Review Moyer Chapter 2
(b) Financial Mathematics – Foundation for Valuation
Moyer:
Chapter 5.
Review:
Moyer:5-1 to 5-12, 5-14,5-16,5-17,5-19,5-28 to 5-31, 5-33, 5-36
to 5-40, 5-44, 5-46
2. Valuation of Debentures, Preference Shares, and Ordinary Shares
Moyer:
Chapter 6; Chapter 7.
Review:
Moyer: 6-4, 6-17, 6-13,6-14,6-17 to 6-22 and 7-2,7-10 to 7-15,
7-25 to 7-27.
Prepare:
Ensign; Trident; Chenonceau; Mendelssohn; Mc Kain Frozen Food
Products; Iron Ltd.
3. Capital Investment Decisions
(a) Net Present Value and Internal Rate of Return:
Moyer:
Chapter 10 (to p. 359).
Review:
Moyer: 10-1, 10-2, 10-8 to 10-10, 10-13, 10-19.
(b) Estimating Project Cash Flows:
Moyer:
Chapter 9.
Review:
Moyer : 9-2, 9-4, 9-5, 9-7 to 9-11, 10-3 to 10-5, 10-12, 10-14.
(c) Investment Appraisal Techniques
Moyer:
Chapter 10: pp. 344 – 359; pp. 362 – 367.
Review:
Prepare:
Moyer:10-1, 10-11 (PI)
Bouges; Supervideo; Doughmore; Neptune; Trendies;
Sound Electronics; Cricket Manufacturing; Gort, Microlite;
Beresford Manufacturing Company, Microlite, LapCo, Magnetyte.
(d) Inflation and Capital Rationing
Moyer:
Chapter 10: pp. 359 – 362; pp. 367 - 368.
Review:
Prepare:
Moyer: 10-11; 10-15.
Swiss Alps Ski Resorts.
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4. The Cost of Capital in Capital Budgeting
Moyer:
Chapter 12.
Review:
Prepare:
Moyer 12-2 to 12-4, 12-6-12-8, 12.10, 12.11
Monarch; Bushypark; Kingsland; Mervue.
5. Working Capital Management
(a) Financing and Working Capital Policy:
Moyer:
Chapter 16 (to p.577).
Review:
Moyer: 16-1, 16-3, 16-4, 16-5, 16-6.
(b) Management of Current Asset Investments:
 Management of Debtors and Inventories
Moyer:
Chapter 18.
Debtors Management:
Review:
Moyer: 18-1, 18-6, 18-8, 18-9, 18-10.
Prepare:
Doolin Fashions; Schubert; McCusker (a); Carroll;
Askeaton Wood Products; Menlo; Ballinine Heat Supplies; Copper.
Inventory Management:
Review:
Moyer: 18-16, 18-17, 18-18, 18-20, 18-21.
Prepare:
McCusker (b); Hot Press; Mermaid; Beaugency.
 Cash and Liquidity Management
Moyer:
Chapter 17.
Review:
6.
Moyer: 17-1, 17-2, 17-4, 17-7
Short and Medium Term Sources of Finance
(This is a self study topic supported by notes in the course pack)
Moyer:
end).
Chapter 16 (p.577 to end), Chapter 19 (Term Loans) (p.698 to
Review:
Moyer:19-1, 19-3 to19-5, 19-8, 19-12, 19-14 to 19-16.
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