lOMoARcPSD|10342466 ACCO-2012 3 Financial-Management Business Administration (Lyceum of the Philippines University) Studocu is not sponsored or endorsed by any college or university Downloaded by wanwanwan (chloezamara@gmail.com) lOMoARcPSD|10342466 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES COLLEGE OF ACCOUNTANCY AND FINANCE DEPARTMENT OF ACCOUNTANCY COURSE TITLE COURSE CODE CREDIT UNITS COURSE PREREQUISITE FINANCIAL MANAGEMENT ACCO 20123 3 UNITS ACCO 20043: Financial Accounting and Reporting 2 This course is intended to help students understand relationship of accounting and finance in order to formulate appropriate financial strategies that maximize shareholders’ wealth. The course will help students understand relationship between various items in the financial statements and incorporate these in actionable strategies that are beneficial for the organization. Students will understand the concepts of risk and return and how this relates to capital management of the business. Students will learn various techniques and methodologies that financial managers need to provide sustainable decision-making support to the organization such as financial statement analysis, financial planning, working capital management, cost of capital, leverage, and capital budgeting. Institutional Learning Outcomes Program Outcomes Course Outcomes BSA and BSMA graduates must demonstrate the ability to review, interpret, evaluate Creative and Critical Thinking Upon completion of the course, the students will be able to: Graduates use their imaginative as well as a rational thinking ability to life financial data and systems in compliance with established policies, procedures, 1. Describe financial management and its importance to business situations in order push boundaries, realize possibilities, and deepen their guidelines, agreements and/or legislation. They must be able to link data, knowledge and organization. insight together with different sources and disciplines to make informed decisions. interdisciplinary and general understanding of the world. 2. Understand financial statements and its components and derive Effective Communication BSA and BSMA graduates should possess active listening skills and the ability to insights from these for decision making. Graduates are proficient in the four macro skills in communication (reading, effectively communicate one’s point of view, both orally and in writing, at all 3. Determine methodologies to assess the risks involved in writing, listening, and speaking) and are able to use these skills in solving organizational levels; be able to explain verbally and/or writing financial, statistical, financial management and develop strategies to mitigate these problems, making decisions, and articulating thoughts when engaging with administrative matters/policies/procedures/regulatory matters/audit results at a level appropriate to the audience and must be able to negotiate effectively. 4. Describe the concept of maximization of shareholders’ wealth people in various circumstances. Strong Service Orientation and how can financial managers contribute to the corporate BSA and BSMA graduates should develop an ability to work in groups, possess skills to Graduates exemplify the potentialities of an efficient, well-rounded, and growth participate as member of a team or/and contribute to group effort; be able to teach others responsible professional deeply committed to service excellence. new skills; be able to work to the satisfaction of the clients; negotiate and work with 5. Apply and relate the skills and knowledge obtained in financial Community Engagement diversity or work well with men and women from diverse backgrounds. management, accounting, and financial reporting to arrive at a Graduates take an active role in the promotion and fulfillment of various holistic approach in solving problems. advocacies (educational, social and environmental) for the advancement of BSA and BSMA graduates must work with the highest standards of professionalism, to attain higher level of performance and generally to meet the public interest, he must community welfare. conform to the ethical standards of the profession that include: Integrity, objectivity and Adeptness in the Responsible Use of Technology independence, professional competence and due care, confidentiality, professional Graduates demonstrate optimized use of digital learning abilities, including behavior, and moral values. technical and numerical skills. Passion to Lifelong Learning BSA and BSMA graduates should possess general knowledge in gaining and Graduates are enabled to perform and function in the society by taking understanding of the different cultures in the world and developing an international responsibility in their quest to know more about the world through lifelong objective thus, he must possess competency in English language, adaptability to foreign business practices, level of trainability and good capabilities in dealing with foreign learning. partners. High Level of Leadership and Organizational Skills Graduates are developed to become the best professionals in their respective BSA and BSMA graduates should not only be conversant with IT concepts for business disciplines by manifesting the appropriate skills and leaderships qualities. systems but sound knowledge on internal control in computer-based systems, Sense of Personal and Professional Ethics development standards and practices for business systems, management of the adoption, Graduates show desirable attitudes and behavior either in their personal and implementation and use of IT, evaluation of computer business systems, and managing the security information. professional circumstances. Sense of National and Global Responsiveness BSA and BSMA graduates should possess broad base of knowledge concerning macroGraduates’ deep sense of national compliments the need to live in a global environmental, economic and industry issues, business process structures, functions, and village where one’s culture and other people culture are respected. COURSE DESCRIPTION 1. 2. 3. 4. 5. 6. 7. 8. 9. practices. It includes knowledge in areas such as economics, quantitative models and business statistics, organizational behavior, international business, ethics, and corporate governance. Downloaded by wanwanwan (chloezamara@gmail.com) lOMoARcPSD|10342466 Course Plan Week Topic 1 Class Management Introduction to the course Discussion of the syllabus Classroom policies Learning Outcomes The learner will: • Have an appreciation of the coverage of the course • Establish order in the class Methodology Lecture and discussion Manage expectation by sharing insights of the instructor and the students Resources Copy of the syllabus Student handbook Assessment Summary of student reflection and expectation Elect class officers prepare seat plan. 1 Introduction to Financial Management • Definition and objectives of financial management • Role of financial management in business • Relationship of finance with other relevant disciplines • Legal forms of business organization • Finance organization and career opportunities in finance • Interface between finance and other functions After the session, the student is expected to: • Describe the concept of financial management and its importance in achieving corporate objectives • Identify the roles of finance managers and how they influence other business functions • Lecture • Case study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Presentation Quiz 2–4 Financial Statements Analysis • Components of Financial Statements a. Statement of Profit or Loss b. Statement of Financial Position c. Statement of Changes in Cash Flows d. Statement of Changes in Owner’s Equity e. Notes to Financial Statements • Objectives of financial statements analysis • Horizontal Analysis • Vertical Analysis • Ratio Analysis 1. Liquidity ratios 2. Activity ratios 3. Profitability ratios 4. Debt ratios 5. Market ratios • Analyzing cash flows After the session, the learner must: • Describe key components of financial statements and understand common terminologies found in financial statements • Be able to identify relevant information from financial statements that can be used for different analyses • Calculate and interpret financial ratios • Identify and describe the activities that affect cash flows of the business and relate them to business environment. • Interpret and analyze statement of cash flows • Calculate free cash flows and described its relationship to business valuation • Describe the effect of non-cash transactions in making economic decision. • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Presentation • Quiz Downloaded by wanwanwan (chloezamara@gmail.com) lOMoARcPSD|10342466 o o Components (Operating, Investing & Financing activities) Free cash flows 5–6 Short-Term Financial Decisions • Net working capital • Cash conversion cycle • Cash management o Funding strategies o Managing receipts and disbursements • Receivables management o Credit management (policy, selection, terms, monitoring) • Inventory management o Inventory management techniques (ABC, EOQ, JIT) o Computerized systems • Current liabilities management o Spontaneous liabilities o Accounts payable & accruals management • Unsecured source of short-term loans After the session, the student is expected to: • Identify components of working capital and why it is necessary to manage working capital • Calculate, analyze, and interpret working capital financial indicators • Identify what are the appropriate strategies that optimize net working capital • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and 7–8 Financial Planning • Definition of financial planning and its role in the business • Benefits of financial planning • Distinction between strategic and operating plans • Financial planning process in an organization • Type of budgetary systems o Master budget, Static budget, Flexible budget o Zero-based budgeting o Continuous budgeting • Profit planning • Cash planning • Pro forma financial statements • Uncertainty in budgeting After the session, the learner is expected to: • Describe the financial planning process of an organization and recognize its importance in achieving business objectives • Identify steps in the budgeting process and be able to prepare budget based on business requirement • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and Downloaded by wanwanwan (chloezamara@gmail.com) • Recitation • Quizzes or Long Exams • Recitation Quizzes or Long Exams lOMoARcPSD|10342466 9 10 Time Value of Money • Role and importance of time value of money in finance • Future value and present value o Single amount o Annuities o Mixed stream • Compounding of interest o Annual o Semi-annual o Quarterly o Monthly • Other applications of time value of money MIDTERM DEPARTMENTAL EXAMINATION After the sessions, the student is expected to: • Lecture • Identify role of time value of money in financial • Case Study management • Calculate appropriate present value based on what is needed by the organization Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Quizzes or Long Exams 11-12 Risk and return • Definition and relationship between risk and return and its importance to the business • Different perspectives on risk management (financial, enterprise, etc.) • Nature and sources of risks • Risk and return of assets o Single asset o Portfolio • Risk preferences • Diversification and correlation • Capital Asset Pricing Model After the sessions, the student is expected to: • Describe relationship between risk and return and illustrate its importance in financial management • Identify and explain strategies to mitigate risks to maximize return • Determine and interpret appropriate discount rate which reflects uncertainty revolving the investment • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Quizzes or Long Exams 13 Cost of capital • Basic concept and sources of capital • Importance of cost of capital for the organization • Cost of long-term debt • Cost of preferred stock • Cost of common stock • Cost of retained earnings • Weighted Average Cost of Capital (WACC) After the sessions, the student is expected to: • Describe cost of capital and its importance in financial management • Identify relevant items affecting cost of capital and calculate cost based on business requirement • Determine uses of weighted average cost of capital in business decision making • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Quizzes or Long Exams Downloaded by wanwanwan (chloezamara@gmail.com) lOMoARcPSD|10342466 14 Leverage • Definition and types of leverage in business (operating and financial leverage) • Capital structure • EBIT – EPS approach to capital structure • Approaches in determining the optimal capital structure After the sessions, the student is expected to: • Understand how capital structure and leverage works and how this influences business strategies • Identify the optimal capital structure of a business • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Quizzes or Long Exams 15 – 17 Capital budgeting • Definition and objectives of capital budgeting • Mutual vs Independent projects • Unlimited Funds vs Capital Rationing • Capital budgeting process • Relevant cash flows in capital budgeting o Initial investment o Operating cash flows o Terminal cash flows • Capital budgeting techniques o Payback period o Accounting rate of return o Net present value o Profitability index o Internal rate of return o Economic value added After the sessions, the student is expected to: • Describe the objectives and process of capital budgeting • Identify relevant cash flows that influence decision making in capital budgeting • Evaluate acceptability of a proposed investment based on the common techniques used • Identify the factors affecting capital budgeting decisions. • Lecture • Case Study Financial Management Payongayong, Roque Ayuyao, 2nd Ed. by and • Recitation • Quizzes or Long Exams 18 FINAL DEPARTMENTAL EXAMINATION Suggested Readings and References • Payongayong L., Roque R. and Ayuyao O., Financial Management 2nd Edition • CIRC HF 4026 B75 2013, Brigham, Eugene F., Fundamentals of Financial Management, 2013 • CIRC HF 4026 R826 2015, Ross, Stephen A., Financial Management: principles and applications, 2015 • CIRC HF 4910 S28 2015, Saunders, Anthony, Financial Markets, and institutions, 2015 • Gitman Lawrence J. and Zutter, Chad J., Principles of Managerial Finance, 13th edition. 2012 Downloaded by wanwanwan (chloezamara@gmail.com) lOMoARcPSD|10342466 Course Grading System ONLINE MODE OF LEARNING Class Standing Quizzes Assignments and other activities Departmental examination Total 70% 50% 20% Final Grade = (1st Grading Period + 2nd Grading Period) 2 CORRESPONDENCE MODE OF LEARNING Result from Online Final Departmental Examination Result from the activities in the modules Total 30% 100% 60% 40% 100% Classroom Policy The allowed number of absences for students enrolled in ACCO 20123 with once-a-week meeting is four (4). Request for excused absences or waiver of absences must be presented upon reporting back to class. Special examinations will be allowed only in special cases, such as prolonged illness. It is the responsibility of the student to monitor his/her own tardy incidents and absences that might accumulate leading to a grade of “FA,” (Failed due to Absences). It is also his/her responsibility to consult with the teacher, chair or dean should his/her case be of special nature. All BSA and BSMA students are expected to be academically honest. Cheating, lying and other forms of immoral and unethical behavior will not be tolerated. Any student found guilty of cheating in examinations will (at a minimum) receive a grade of 5.0 in the said test. Consultation Time Subject to the availability of the subject teacher, student may approach the subject teacher for queries about his/her grade as well as other academic requirements for the subject. Prepared by: Enhanced by: Reviewed by: (sgd.) Ryan C. Roque, CPA, MBA Faculty Member (sgd.) Luzviminda S. Payongayong, CPA Faculty Member (sgd.) Lilian M. Litonjua, CPA, MBA Chairperson Recommending Approval: (sgd.) Dr. Julieta G. Fonte, CPA Dean, College of Accountancy and Finance Approved by: (sgd.) Dr. Emanuel C. De Guzman Vice President for Academic Affairs Revised March 2021 Downloaded by wanwanwan (chloezamara@gmail.com)
