COURSE OUTLINE FINANCIAL MANAGEMENT Course Description: The focus of this course in in the area of financial management. It involves studies on decision-making utilizing financial resources available to the firm from the perspective of the manager. It emphasizes the understanding of finance theory and working knowledge of the financial environment in which the firm operates in order to develop appropriate financial strategies. It will also explain financial tools and techniques which can be used to help firms in maximizing value by improving decisions relating to capital budgeting, capital structure, working capital management, and dividend decisions. It also deals with a number of related topics, including multinational financial management, risk management, mergers and acquisitions. Course Objectives: The course aims to develop mastery of the financial management concepts. This will enable to the student to understand how corporations make important investment and financing decisions, and how they establish working capital policies. The course also lays a foundation for more complex financial topics. It seek to describe the corporation and its operating environment; it will help any future manager to understand how the finances of a company work, and how they will be interfacing with finance. Course Outcomes Upon completion of this course, students will be able to: Thoroughly explain key Financial Management concepts. Develop skill-set to determine appropriate course of action to be used in decision making with regards to financial outcomes. Become familiar with financial management tools that help interpret information. Cultivate the ability to integrate financial information in the organizations decision-making process. Apply knowledge to solve real business problems. Make informed critical business decisions using financial management tools. Course Contents TOPICS 1-Financial Management: Introduction, Meanings and Definitions, Goals of Financial Management, Finance Functions, Interface between Finance and Other Business Functions 2-Financial Planning: Introduction, Objectives, Benefits, Guidelines, Steps in Financial Planning, Factors Affecting Financial Planning, Estimation of Financial Requirements of a Firm, Capitalization 3-Time Value of Money: Introduction, Rationale, Future Value, Present Value 4-Valuation of Bonds and Shares: Introduction, intrinsic value, book value, Valuation of Bonds, Valuation of Shares 5-Cost of Capital: Introduction, Meaning of Cost of Capital, Cost of Different Sources of Finance, Weighted Average Cost of Capital 6-Leverage: Introduction, Operating Leverage, Application of operating leverage, Financial Leverage, Combined Leverage Mid-term Examination 7-Capital Structure: Introduction, Features of an Ideal Capital Structure, Factors Affecting Capital Structure, Theories of Capital Structure 8-Capital Budgeting: Introduction, Importance of Capital Budgeting, Complexities Involved in Capital Budgeting Decisions, Phases of Capital Expenditure Decisions, Identification of Investment Opportunities, Rationale of Capital Budgeting Proposals, Capital Budgeting Process, Investment Evaluation, Appraisal Criteria 9-Risk Analysis in Capital Budgeting : Introduction, Types and Sources of Risk in Capital Budgeting, Risk Adjusted Discount Rate, Certainty Equivalent Approach, Probability Distribution Approach, Sensitivity Analysis, Simulation Analysis, Decision Tree Approach 10-Capital Rationing: Introduction, Types, Steps Involved in Capital Rationing, Various Approaches to Capital Rationing 11-Working Capital Management : Introduction, Components of Current Assets and Current Liabilities, Concepts of Working Capital, Objective of Working Capital Management, Need for Working Capital, Operating Cycle, Determinants of Working Capital, Approaches for Working RESPONSIBLE PERSON Escobar Journal Critique TIME FRAME Tubat Sept 11 Arabejo Rosal Sept 11 Cabarubias Arabejo Sept 18 Liagua Daban Sept 18 Rosal Escobar Sept 25 Tubat Balco Sept 25 October 2 October 9 Balco Tubat Daban Escobar October 9 Balco Arabejo October 16 Cabarubias Rosal October 16 Arabejo Cabarubias October 18 Capital Management, Estimation of Working Capital 12- Cash Management: Introduction, Meaning and Importance of Cash Management, Motives for Holding Cash, Objectives of Cash Management, Models for Determining Optimal Cash Needs, Cash Planning, Cash Forecasting and Budgeting 13-Inventory Management: Introduction, Role of Inventory in Working Capital, Characteristics of inventory, Purpose of Inventory, Costs Associated with Inventories, Inventory Management Techniques, Importance of Inventory Management Systems 14-Receivable Management: Introduction, Costs Associated with Maintaining Receivables, Credit Policy Variables, Evaluation of Credit Policy 15-Dividend Decisions: Introduction, Traditional Approach, Dividend Relevance Model, Miller and Modigliani Model, Stability of Dividends, Forms of Dividends, Stock Split 16. Risk Management,Business Merger and Acquisition Final-term Examination Daban Liagua October 18 Rosal Balco October 23 Liagua Daban October 23 Tubat Cabarubias October 30 Escobar Liagua October 30 Grading System/Class Requirements: Quizzes Assignment/ Topic Presentation/ Case Analysis Journal Critique Exam (Mid-Term and Final) Attendance November 6 - 25% 30% 20% 20% 5% ---100% 1) Quizzes/Assessment (25%) - A quiz shall be given right after every topic presentation and discussion 2) Assignment/Topic Presentation/Case Analysis (30%) – A topic shall be assigned to each student to research and present in class. The presentation shall primarily focus on the concepts of the topic assigned. It should be coupled with a case study (please provide a copy of the case) and analysis relative to the topic being presented which could be based on readings or actual experience. It shall contain the following: a) Introduction – Write an introduction where you identify the key problem. b) Background Information – Include some relevant facts and issues and conduct research on the problem. c) Alternatives – Describe several alternatives and explain why some were rejected. Describe existing constraints and explain why some alternatives were rejected. d) Solution – Provide one realistic solution to the problem, explain the reasons behind the proposed solution, support this solution with justification, include relevant theoretical concepts in addition to the results of your research. e) Recommendations – Identify specific strategies to accomplish the proposed solution, recommend further actions, outline an implementation plan. Note: This should be submitted and presented during the scheduled presentation of concepts. 3. Journal Critique (20%) - A 3-page journal critique is prepared relative to the topic to be discussed during the day. It shall contain the following: 1) Title of the Article (provide the author and source APA format) a. Synthesis: provide a summary of the content of the article b. Learning and Insights: Concept and ideas that you have accumulated. Personal reflection on your experiences, perspectives, competencies, weaknesses and biases c. Conclusion and Recommendation; Make your own conclusion or realization on the article and come up with your own recommendation Note: 2 students shall be chosen randomly to present his/her critique. 5. Exams (20%) - There shall be two sets of examination. The mid-term and the final term exams. 6. Attendance (5%) – Classes shall be held every Saturday via google meet or zoom from 1:00 pm to 6 pm accumulating a total of 54 hours.
