King Abdul Aziz University
College of Business
Department of Finance
Course of Study Outline
FINA252
Basics of Financial Management
Semester 1, 2015-16
Version date (1 July, 2016)
Course of Study Outline
Course of study code
FINA252
Course of study name
Basics of Financial Management
Teaching Term/Semester & Year
Semester 1, 2015-16
Contact Hours (hrs/wk) or total contact
hours
Duration: 2 teaching days over 15 weeks
Credit Points
3.000
Contact hours: 45 hours
Teaching Staff
Name
Dr.
Mazharul
Islam
Role
Lecturer
Room
No.
7-214
Phone No.
0568543711
Email Address
malislam@kau.edu.sa
mazharulislam@yahoo.com
Consultation
Times
Section
Monday &
Wednesday
(9.30am to
10.50am)
Course Description
This is an introductory course in Financial Management. It is designed to elaborate the
theory and practice of corporate finance. This course will build your understanding of basic
financial theory and practices. You will address current financial management issues faced
by business decision-makers and will build the essential analytical skills necessary for
dealing with various financial issues. This course involves a careful overview of the finance
field and will start by defining finance and the role of financial managers in terms of
objectives and goals .
Also, it will involve defining and understanding corporate governance and its implication on
corporate world. It will then, cover the basic concept of time value of money and it is
importance in the finance field in terms of decision making.
Lastly, as one of the most important roles of the financial manager is to be able to use
financial statements to analyse and project a firm`s financial performance, It will help to
identify investment opportunities, thus increase shareholders wealth.
Aims and Objectives
The overall aim of the course is to provide students with the basic of financial
management. Familiarize students to with the concept of finance and the role financial
managers. Explain why the role of the financial manager today is so important. Be able to
fully understand the concept of corporate world. Understand the concept of time value of
money. Comprehend the tradeoff between risk and return and how investors will be
tempted to take on extra risk to get greater return. Be able to identify the principals
involved in managing a firm’s investment in working capital. Understand the relationship
between present value and future value. Calculate both present value and future value. Be
able to calculate the present & future value of mixed flows. Understand the difference
between simple interest and compound interest. Be able to calculate the value of bonds.
Define, calculate and categorize the major financial ratios (according to liquidity, financial
leverage, coverage, activity and profitability) and understand what they can tell us about
the firm. Understand the limitation of financial ratios. Be able to develop analytical and
problem solving skills, skills and attitudes conducive to lifelong learning.
Page 2 of 7
Content
The following topics will be covered in the financial management course;
 The Role of Financial Management.
 Important concepts of Finance.
 Financial Statements, Taxes, and Cash Flow.
 The time value of money.
 Risk and Return.
 Financial Statement Analysis.
 Cash-Flow Analysis, and Financial Planning.
Learning and Teaching Structure
Teaching method: Lectures, Class exercise
Students are expected to read lecture slides and complete homework before coming to
class.
In a Semester, you should normally expect to spend, on average, 6 hours of total time
(formal contact time plus independent study time) a week on a 3 credit point unit of study.
Resources and Reference Material
1. Ross/Westerfield/Jordan, Fundamentals of Corporate Finance, 9th edition, available
at University Book Store or can buy online from amazon.com. Also any Edition can
be used.
2. Students will need to have a Calculator
3. PowerPoint slides for each lecture, Test Bank, Solutions, and the Unit Outline will
be available in my URL:http://www.kau.edu.sa/DRS-0061123.aspx)
Material on the URL is updated several times each week. Students are required to
check the site frequently to ensure that they have up-to-date information.
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Date
Week
Lecture
Topic
1
Contents
- Define of financial
management
24 & 26
August.
2015
- Financial management
The Role of
decisions
Financial
Management - Goal of financial
management
- Agency problems
2
Financial
31st August
Statements,
& 2nd Sept.
Taxes, and
2015
Cash flow
3
- The balance sheet
- The income statement
- Taxes
- Cash flow
- Cash flow and financial
statements
7&9
(Sept.
2015)
Financial
Statements
and Longterm
Financial
Planning
- Standardized financial
statements
- Ratio Analysis
- The Du Pont Identity
- Using financial
statement information
4
- Define financial planning
14 & 16
(Sept.
2015)
Financial
Statements
and Longterm
Financial
Planning
5
5&7
(October
2015)
The Time
Value of
Money
(October
2015)
- Present value and
discounting
- More about present and
future vales
- Future and present
values of multiple cash
flows
Discounted
cash flow
valuation
- Annuities and
perpetuities
- Effective interest rate
and Nominal interest
rate.
Assessment
Chapter 1
(Ross/Westerfiel/Jordan
-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 1
Chapter 2
(Ross/Westerfiel/Jordan
-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 2
Chapter 3
(Ross/Westerfiel/Jordan
-Fundamentals of
corporate finance, 9th
edition)
Quiz-1
Lecture note 3
Chapter 4
(Ross/Westerfiel/Jordan
-Fundamentals of
- The percentage of sales
corporate finance, 9th
approach
edition)
- External financing and
Lecture note 4
growth
- Future value and
compounding
6
12 & 14
- Financial planning
models
Reading
Class
attendance
and
participation
Chapter 5
(Ross/Westerfiel/Jordan
-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 5
Chapter 6
(Ross/Westerfiel/Jordan
-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 6
Page 4 of 7
7
Chapter 7
19 & 21
(October
2015)
- Bond and bond valuation
Bond
Valuation
- Bond features
- Bond rating
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
Mid-Term
Exam
Lecture note 7
8
26 & 28
(October
2015)
Bond
Valuation
- Types of bond
Chapter 7
- Bond Markets
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
- Inflation and interest
rates
- Determinants of bond
yields
9
Class
attendance
and
participation
Lecture note 7
Chapter 8
2&4
Stock
(Nov. 2015) Valuation
- Common stock valuation
- Features of common
stock
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 8
10
Chapter 8
9 & 11
Stock
(Nov. 2015) Valuation
- Features of preferred
stock
- Stock markets
- Review class
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 8
11
Chapter 16
Financial
- Capital Structure
leverage and
- Capital Structure and
(Nov. 2015) Capital
cost of equity
Structure
16 & 18
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 9
12
Chapter 16
Financial
- Optimal capital structure
leverage and
- Observed capital
(Nov. 2015) Capital
structure
Structure
23 & 25
(Ross/Westerfiel/Jorda
n-Fundamentals of
corporate finance, 9th
edition)
Class
attendance
and
participation
Lecture note 9
13
30th Nov. &
2nd Dec.
(2015)
Practical exercise on financial statement analysis
14
7 & 9 (Dec.
2015)
15
14 & 16
Revision
(Dec. 2015) Class
Report writing on financial statement analysis
All relevant chapters that will
cover in the final exam
Homework Submission
Final Exam (date will be informed later)
Page 5 of 7
Assessment
a. Assessment Task Details:
Assessment Task
Individual/ Weighting
Group
Task
Class participation
Individual
10%
Quizzes
Individual
15%
2nd exam
Individual
25%
Homework
Group
10%
Final exam
Individual
40%
In order to successfully complete this unit, students must achieve

at least 60% of the marks allocated to the all assessment tasks.
Course Requirements & Policies
You are expected to fulfil the following requirements of the course to obtain a grade:

Participation/Attendance
Attendance for face-to-face class is compulsory. Any student not attending a class
should provide a medical certificate or a written justification (signed by a parent or
guardian in the case of a full-time student). Students are required to participate actively
in class discussion, exercises and other class activities. Students are expected to read
the topics before coming to class to facilitate their understanding of the subjects and in
the discussion.

Class Assignments/Homework
Each student is required to submit written assignment/homework of selected cases.
These assignments must be done as a group. Assignments must be submitted on the
specified date. If you perform poorly on an assignment, I will give you the opportunity
to redo the work for a better grade (with a lower maximum).
For any assignments/homework given, the format of the paper should be as follows:
 A cover page with your details – Name, Student ID and Sections
 Font Arial, size 11 with 1.5 spacing
 Include a reference page (if needed) for every assignment/homework that you
submitted.
Quizzes must be taken on the specified date. If you encounter any problem to take the
quizzes on the specific date, you are required to sit for quiz within the next five days.
Page 6 of 7
Final Result Categories
Symbol %
A+
95-100
A
B+
B
C+
C
D+
D
90-94
85-89
80-84
75-79
70-74
65-69
60-64
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