FINANCIAL MANAGEMENT
Ateneo-Standard MBA Program
Revised: August 2020
ECONOMICS, FINANCE & ACCOUNTING DEPARTMENT
Ateneo-Standard MBA Program
COURSE TITLE:
FINANCIAL MANAGEMENT
COURSE CODE:
SPFINMAN
COURSE DESCRIPTION:
The course deals with the application of contemporary finance theory to the solution of
management problems. The focus is on policy formulation and decision making under
uncertainty. Critical evaluation of concepts is emphasized to assess their usefulness in practical
business situations. Problem-solving methodology is used to illustrate the theories and tools in
financial decision-making.
The course likewise tackles the ethical issues and dilemmas faced by the finance manager in
his day-to-day work and how these are solved. The learners will be taught how to resolve these
issues using an ethical decision analysis framework. The course also discusses the implications
of financial management decisions in the life of the enterprise and how such impacts the
national economy as a whole.
COURSE OBJECTIVES:
Upon the successful completion of the course, learners are expected to competently:
1. Discuss the objectives of the finance function in the organization, the role and importance of
the finance manager in the modern firm;
2. Apply financial planning and forecasting tools in projecting a firm’s financials;
3. Apply the various tools in managing cash, accounts receivable and inventory in appropriate
situations;
4. Evaluate long-term investments – capital expenditures, projects, and financial investments –
using tools and techniques for project evaluation and investment management;
5. Evaluate a firm’s capital structure and the various sources of short, medium and long-term
financing;
6. Discuss dividend and payout policies and their effects on firm value
7. Analyze the risks a finance manager faces in the normal course of business and explain
how real options, derivatives, hedging, and other techniques can minimize or avoid risk;
and,
8. Discuss the ethical and economic implications of decisions related to financial management
as they affect the enterprise and the nation as a whole.
NOTE: THE FOLLOWING SKILLS SHOULD BE MASTERED IN PREPARATION FOR
THE CAPSTONE COURSE, STRATEGIC MANAGEMENT (STRAMA), AS THESE
SKILLS WILL BE REQUIRED TO BE DEMONSTRATED IN THE STRAMA PAPER
TO BE PRESENTED AND DEFENDED IN FRONT OF A PANEL.
1. Financial planning and forecasting (see Course objective No. 5) – the Learner is
expected to prepare 3-year projected income statements and balance sheets using the
percentage-of-sales method and other techniques learned in connection with financial
statement analysis such vertical and horizontal analysis, ratios, the Du Pont method; he
is also expected to prepare a master budget to complement/validate the financial
projections if he is thoroughly familiar with the company which is the object of the
STRAMA paper
2. Working capital management (see Course Objective No. 7) – the Learner is expected
to assess the operating cycle of the company through calculations of receivable and
inventory turnovers and days in receivables and inventories as part of his internal
analysis of the company’s financial performance
3. Capital budgeting/Long-term Financial investing (see Course Objective No. 8 and
10) – the Learner must know how to evaluate long-term investments using the
discounted cash flow method through a working knowledge of how to determine cash
flows, calculate present values of cash flows, and calculate weighted average cost of
capital (WACC) to serve as a discount factor. He should also be able to determine the
internal rate of return. This skill is needed to be demonstrated in the Strama paper
especially when there is a strategic option to acquire a company or set up factories
which require commitment of significant resources.
The Learner is also expected to evaluate long term financial investments in stocks and
bonds through a working knowledge of portfolio theory, pricing of stocks and bonds,
diversification techniques, especially when the company which is the object of STRAMA
is a financial institution.
4. Capital structuring (see Course objective No. 9)- the learner must know how to
structure the company’s proportion of debt and equity to arrive at the least possible
WACC and to minimize the possibility of insolvency due to extensive interest-bearing
debt. This proper balance should be incorporated in the financial projections and master
budgets prepared for the STRAMA paper.
5. Risk assessment and management (see Course objectives No. 6 and 11) – the
Learner is expected to be alert to business and financial risks and be able to manage
them through hedging techniques. This is useful as a paradigm when performing internal
analysis of the object company in the STRAMA.
COURSE OUTLINE (LIST OF MODULES)
Module 0:
Module 1:
Module 2:
Module 3:
Module 4:
Module 5:
Module 6:
Module 7:
Introduction
Financial Planning
Working Capital Management
Project Evaluation and Capital Budgeting
Capital Markets and Investments
Capital Structure, Equity Financing & Payout Policy
Long-term Financing (Debt, Leasing, Joint Ventures)
Special topics (Derivatives, M&As, International Finance)
FORMATIVE AND SUMMATIVE ASSESSMENTS:
Formative assessment
1. Prepare 3-year financial projections for a chosen entity
Additional guidance:
a) Ideally, you should be making projections on the entity that will be the subject of
your paper in Strategic Management. This makes the exercise both relevant and
efficient.
b) You will need the financial reports of at least the last three years and some idea of
the plans of the firm in the next few years. The past financials give you insights on
trends and on the range of figures that are reasonable. The plans help in the
projections.
c) Project 3 years of financial reports, with each year projected separately. Articulate
the bases for the projected values of major accounts. (e.g., management plan,
trends, some law the firm has to comply, a ratio, average, etc). The bases are
more important than the numbers!
d) Submit the past financials, the plans, and the projections.
e) The instructor will provide feedback to improve the projections and your skills in
this area.
Course Learning Outcome assessed:
Apply financial planning and forecasting tools in projecting a firm’s financials
Summative assessments
1. Midterm Examinations
2. Final Paper
Section A
Each learner shall submit a final paper on a situation/ issues, problems, challenges in a
chosen company that can be resolved or decided on with the help of tools learned in
financial management. The student will research the situation currently faced by their
firm, either a problem that has strategic financial implications or a decision issue that will
lead to further improvement in wealth creation and enhancement of the firm’s value. The
student will do an analysis of the situation including all related issues and will make a
proposal specifying actions that will provide a response to the situation. Relevant
concepts and tools learned in Financial Management must be used in the analysis and
become a basis for the recommendations. The estimated financial impact or benefit of
those recommendations if implemented should be shown. The paper should contain the
following parts:
1. Brief company background
2. Presentation and discussion of the case
3. Analysis, including how the case situation is affecting the financial
condition or performance of the firm
4. Application of a financial tool/s or concept/s on the case and the initial
recommendation reached based on said application. Show the
estimated financial benefit derived from implementing this
recommendation.
5. Other considerations and final recommendation
Course Learning Outcomes assessed:
The final paper addresses any combination of the following course outcomes:
1. Apply the various tools in managing cash, accounts receivable and inventory in
appropriate situations;
2. Evaluate long-term investments - capital expenditures, projects, and financial
investments - using tools and techniques for project evaluation and investment
management;
3. Evaluate a firm’s capital structure and the various sources of short, medium and
long-term financing;
4. Analyze the risks a finance manager faces in the normal course of business and
explain how real options, derivatives, hedging, and other techniques can
minimize or avoid risk;
5. Apply financial planning and forecasting tools in projecting a firm’s financials.
Section B.
Each learner will write a reflection paper on his/ her experience of the stock market
game.
Course Learning Outcome assessed:
Evaluate long-term investments – capital expenditures, projects, and financial
investments – using tools and techniques for project evaluation and investment
management
Rubrics for the final paper:
Criteria for
Assessment
Needs
Improvement
Meets
Standards
Exposition of an
authentic
workplace situation
Presents a current situation of strategic
importance in the workplace, with
adequate facts, issues, and options
Level of argument
and analysis
Demonstrates well-structured
and clearly expressed arguments
and analyses.
Application of tools
learned in Financial
Management
Correctly applies the proper financial
management tools to the situation
Recommendation
Comes up with recommendations that
flow from the analysis; implementation
challenges are discussed
Projections
Estimates the value created and the
changes to the accounts affected by the
recommendation.
Exceeds
Expectations
INTEGRATION AND METHODOLOGY:
Because of its integrative and wide-ranging features, this course is normally offered to senior
learners who are expected to have completed the prerequisite or foundation courses in
accounting. The facilitator will show the relationship of topics in this course with issues faced in
accounting, operations, marketing, human resources, and management. Interactive methods
and various strategies will be used to provide the best learning experience possible considering
the students’ academic and professional background.
This module serves as the blueprint on how the course will unfold. The facilitator, however, may
introduce new topics and modify certain strategies in order to be more responsive to the
students’ expressed needs.
This course will be conducted with the use of interactive methods appropriate for adult learners,
focusing on cases of specific and broad topics, group discussions and exercises, quizzes,
individual and group presentations, simulation and other learning skills-building approaches.
These methodologies are designed to enhance the personal development of learners who will
take leadership roles in their future endeavors.
GRADING CRITERIA:
Learner performance will generally be graded in the following manner:
Individual Work
Group Work
Midterm Examinations
Final Paper
Total
20%
20%
20%
40%
100%
The following Quality Point Index (QPI) applies to all MBA courses.
4.0
3.5
3.0
2.5
2.0
0.0
INC
UW
W
98-100
95-97
92-94
89-91
86-88 (minimum pass)
Failed
Incomplete
Unauthorized Withdrawal (equivalent to a Failing mark)
Officially Withdrawn
SPECIAL ACCOMMODATIONS:
A learner in need of course adaptation or special considerations due to certain disability or other
problems or constraints should discuss the same with the professor ASAP.
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ACADEMIC INTEGRITY POLICY:
Each learner is responsible to know the standards of conduct and expectations of academic
integrity that apply to academic undertakings. Academic dishonesty will not be tolerated and will
result in the maximum penalty allowable as defined in the student guidebook. The following are
considered serious violations per guidebook:
•
•
•
Cheating during exams.
Submitting spurious reports copied from previous materials other than his/her own.
Plagiarism.
In understanding what constitutes Plagiarism, see the following sites:
http://www.engl.niu.edu/comskills/students/plagiarism/Plagiarism.html
http://www.monet.k12.ca.us/Challenge/Plagiarism/Plagiarism.htm
In addition to what is stated in the guidebook, the following are examples of academic
dishonesty that are pertinent to the requirement of this course:
•
•
•
Copying another learner’s work including assignments and reports
Use of “crib” sheets or other hidden note for a quiz or an exam
Receiving assistance from anyone else for take-home quizzes
MATERIALS OF INSTRUCTION:
1. Textbook:
Ross, Westerfield, Jaffe, Jordan
CORPORATE FINANCE, 12TH EDITION
New York: McGraw-Hill Education © 2019
2. Facilitator-prepared booklet of materials, cases, and exercises to be distributed in Module 0.
3. Web References:
The following APS online library resources are available for access:
a. EBSCO
b. Accessing Marketline Advantage Online
The following internet resources can also be used:
http://www.quickmba.com/finance/black-scholes/
A brief description of the black-scholes option pricing
formula, and how to apply it to the valuation of options and
warrants.
http://www.finpipe.com/equity/finratan.htm
Contains lectures about Financial Ratio Analysis.
http://www.ventureline.com/FinAnal.asp
Provides tools and topics about Financial analysis and
industry ratios, Financial analysis of a public company with
ratio analysis, Financial analysis of a private company with
ratio analysis & Financial analysis comparisons.
http://www.quickmba.com/finance/financial-ratios/ A listing of some useful financial ratios, including leverage,
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gross margin, asset turnover, and liquidity ratios.
http://fisher.osu.edu/fin/resources_education/credit An article by Professor Tin Opler of Ohio State University on
.htm
the changing issues related to corporate financing decisions
(debt vs. equity) through time.
http://web.utk.edu/~jwachowi/wacho_world.html
Another well designed website specially for discerning
finance students, includes auxiliary class materials,
references to outside readings for chapters of any other
finance text and other websites.
http://www.treasury-management.com/
Articles by and for international treasures, on topics such as
the euro and foreign exchange management.
http://www.cfo.com
Commercial finance online, largest finance search engine.
Search for capital and resources of postings of businesses
needing capital.
http://www.gonnerman.com/tools.php
Contains downloadable financial tools to report on
operations, project cash needs, plan for equity-based
transactions, etc.
http://www.quickmba.com/finance/terminal-value/ Discusses the significance of terminal value and how to
calculate it.
http://www.themanager.org/Knowledgebase/Finan Discussion about accounting, activity based costing (abc),
ce/index.htm
budgeting / financial planning, business valuation, financial
analysis and miscellaneous articles.
http://www.euromoney.com/
Excellent articles on up-to-date topics in the global money
and capital markets.
http://www.quickmba.com/finance/free-cash-flow/ Explains how to calculate the unleveled free cash flow for
valuation purposes.
http://www.bonds-online.com/
Explanations and market data on US treasury and other
bonds.
http://www.stocktrak.com/
For those who wants the chance to test out their investment
strategies without losing their shirts the company provides,
for a free, the ability to "paper trade" a portfolio.
http://www.quickmba.com/finance/invest/
Investment management, topics in investment management,
including portfolio risk and return, the capital asset pricing
model, single factor model, long-term investing, definedbenefit pension plans, arbitrage pricing theory, mutual fund
style analysis and performance and tools.
http://www.duke.edu/~charvey/Classes/ba350/cap Lecture from Professor Harvey of duke fuqua business
struc/capstruc.htm
school on corporate structure and dividend payout decisions.
http://www.quickmba.com/finance/cf/
Lectures in corporate finance, finance from the viewpoint of
corporate finance decision-makers, including profitability
ratios, capital structure, cost of capital, discounted cash flow
methods, and mergers and acquisitions.
http://www.bizmove.com/finance/m3b3.htm
Lectures on financial ratios analysis.
http://www.moneyadvisor.com/
Lectures on loans and savings calculations, general financial
calculators, mortgage calculators, college financial and
calculators and just for fun calculators.
http://www.quickmba.com/finance/invest/timing/
Discusses the predictive ability required in order to
outperform the market by timing changes between equities
and cash.
http://www.quickmba.com/finance/mergersA short overview on mergers and acquisitions focusing on
acquisitions/
the synergies required to make such combinations
worthwhile.
http://www.quickmba.com/finance/debt-valuation/ Methods for valuing the debt of a corporation. Includes a
section on modeling the possibility that bond ratings will
change over time.
http://www.nyse.com/
New York stock exchange, primary US stock market,
Information on the stocks that are sold on this exchange can
be found here.
http://www.schwab.com/
One can sign up to receive Schwab’s company research
information or electronic trading.
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http://www.mapnp.org/library/finance/fp_fnce/fp_fn
ce.htm
http://pages.stern.nyu.edu/~adamodar/New_Home
_Page/cflect.htm
http://www.a1abusinessanalysistools.com/
Presents related libraries for financial management and
small for-profit businesses.
Professor Damodaran of the Stern School of Business
Corporate Finance Lectures.
Provides a wide range of accounting and financial analysis
tools.
http://www.arprogram.com/
Provides annual reports solutions for financial institutions.
http://finance.pro2net.com/
Provides finance news, research, articles and marketing for
financial professionals.
http://www.quickmba.com/finance/securities/
Security analysis, lectures on how to value the assets, debt,
warrants, and equity of companies. Includes valuation
methods, free cash flow, leverage, cost of capital, share buybacks and more.
http://www.quickmba.com/finance/invest/indices.sh An introduction to commonly used stock price indices
tml
including price-weighted, market cap weighted and
unweighted indices.
http://fisher.osu.edu/fin/journal/jof.html
This magazine is focused much more specifically on
academic research regarding the financial markets.
http://www.quickmba.com/finance/invest/tradecost/ A short discussion on the costs associated with equity
trades, including commissions, fees and taxes the market
maker spread the impact of trading on market price, and the
opportunity cost concludes with two ways of reducing trading
costs.
http://www.nasdaq.com/
US over-the counter stock market Information on the stocks
that are available on this exchange can be found here.
http://pages.stern.nyu.edu/~igiddy/
Usage of derivative contracts in international investments.
http://www.ml.com/
Provides data in making stock selections, Information on the
broader investment market and on the economy.
http://www.forecasts.org/
Web site of the financial forecast center provides six month
forecasts for major stock indexes, money rates, foreign
exchange, and general economic indicators.
http://dir.yahoo.com/Business_and_Economy/finan Yahoo's finance and investment section.
ce_and_investment
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