imt_234_course_syllabus_1st_2014

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YANBU UNIVERSITY COLLEGE
DEPARTMENT OF MANAGEMENT SCIENCES
ASSOCIATE DEGREE PROGRAM
MAJOR: ACCOUNTING
COURSE SYLLABUS
Course Code:
Course Name:
Contact hours:
Credit hours:
Course Instructor:
Office Location:
E-mail:
IMT 234
PRINCIPLES OF FINANCE
3 hours (3 classes/week)
3 hours
Dr. Haitham Ahmed Abdelmoneim
YUC, G2, Room no. 23.
[email protected]
COURSE DESCRIPTION
This course deals with basic concepts of finance, decisions such as financing decision,
capital budgeting decision, working capital decision and dividend decision. It also
examines time value of money, long-term and short-term finance, operating and
financial leverage and the problems facing a financial manager in a typical business
organization.
REQUIRED TEXTBOOK
Title
Fundamentals of
Financial
Management
Author(s)
James C.Van
Horne and John
M.Wachowicz
Publication
year
Edition Publisher
2008
13th
Prentice
Hall
ISBN
978-027371363-0
COURSE OBJECTIVES
Upon successful completion of this course, the students will be able to :
 Explain the role of financial management in business organizations and the financial
environment in which they operate.
 Discuss the concepts of time vale of money and the risk-return trade off and their
applications in financial management.
 Explain the meaning, importance and the mechanism of managing working capital.
 Explain the capital budgeting process and techniques.
 Discuss the meaning of cost of capital and capital structure determination.
 Describe sources of long term and short term financing and the Islamic financing
Page 1 of 5
IMT 234 – PRINCIPLES OF FINANCE
COURSE OUTLINE:
Week
1-2
3-5
6-8
9-11
12-13
14-15
Total
contact
hours
Module
1
2
TOPICS COVERED
List of topics
MODULE 1: Introduction to Financial management
MODULE 2: Time Value Concept, risk and return
MODULE 3: Overview of Working Capital Management
MODULE 4: Capital Budgeting Techniques
MODULE 5: Cost of capital and capital structure
MODULE 6: Strategic Financing Decision
Contact Hours
6
9
9
9
6
6
45
Topic
Module 1: Introduction to
Financial Management
 Describe the managerial
finance function and its
relationship to economics and
accounting.
 Define the goal of the firm
and why profit maximization
and earning maximization is
not a good goal
 Identify the primary
activities of the financial
manager
 Define the agency theory and
its implications
Module 2: Time Value, Risk
and Return
 Understand the concept of
“Time Value of Money”.
 Understand the concepts of
future value and present
value.
 Define the meaning and
fundamental of risk, return
and risk preferences.
 Identify the risk and return
Pages to
read from
the
required
textbook
Chapter 1:
PP. (1-14).
Quizzes, Mid-Term
Exam, and
Assignments
Wee
ks
Assignment# 1: Page
14:
Questions (1, 2; 3 6).
1-2
Chapter 3:
PP. (41-69);
and
Chapter 5:
PP. (97125).
Page 2 of 5
Quiz# 1:
First Class of Week 5
on Modules 1 & 2
(Chapters 1, 3 & 5).
Assignment# 2:
1) Page 65:
Problems: 1(a); 2 (a);
4; 5.
2) Page 122:
Problems: 1 (a); 2; 4.
3-5
IMT 234 – PRINCIPLES OF FINANCE
3
characteristics of a portfolio.
 Review the two types of risk
and role of beta in measuring
the relevant risk of both a
security and a portfolio.
Explain the CAPM and its
relationship to the SML.
Module 3: Overview of
Working Capital
Management
 Understand the objectives
and issues of working capital
management
 Understand short term
financial management, net
working capital and the
related tradeoff between
profitability and risk.
 Discuss how to determine
the optimal level of current
asset
 Describe the relationship
between profitability, liquidity
and risk in the management of
working capital
 Explain the difference
between the temporary and
permanent asset
 Describe the hedging
approach to financing and the
advantages and disadvantages
of short versus long term
financing.
 Define the management of
cash, marketable securities,
inventory and receivables
 Understand the trade off in
cash management
Mid-term
Modules: 1, 2 & 3.
Exam
Module 4: Capital budgeting
 Understand the key motives
for capital expenditures and
4
the steps in the capital
budgeting process.
 Understand the role of
Chapter 8:
PP. (205218);
Chapter 9:
PP. (221247);
Chapter 10:
PP. (249278).
Assignment# 3:
1) Page 217:
Problem 1.
2) Page 246:
Problem 1.
3) Page 275:
Problem 1.
4) Page 277:
Problem 7.
6-8
First Class of Week 9
Chapter 12:
PP. (307321);
Chapter 13:
PP. (323349).
Page 3 of 5
Assignment# 4:
1) Page 319:
Problem 1.
2) Page 347:
Problems 1, 2, 3, 4.
9
9-11
IMT 234 – PRINCIPLES OF FINANCE
5
6
capital budgeting techniques
in the capital budgeting
process.
 Understand the payback
period method
 Understand the three major
discounted cash flow method
 Explain the acceptance
criterion and advantages for
each method for dependent
and independent project
 Rank and describe the
acceptance criterion for
mutually exclusive projects.
 Explain the reason for
capital rationing.
Module 5: Cost of capital and
capital structure
 Understand the capital
structure concept.
 Explain the traditional
approach and M&M theory of
capital structure
 Define optimal capital
structure
 Discuss the EBIT-EPS
approach to capital structure
 Understand the key
assumptions, the basic
concept and the specific
sources associated with the
cost of capital.
Module 6: Strategic financing
decision
 Understand the need for
short term and long term
financing
 Understand the terminology
and characteristics of bonds,
preferred stock and common
stock
 Explain how the retirement
of bonds and preferred stock
may be accomplished in a
number of different ways
 Explain the characteristic of
Chapter 17:
PP. (451471).
Assignment# 5:
Page 469; Problem 1.
1213
Chapter 11:
PP. (281305);
Chapter 20:
PP. (527550).
Page 4 of 5
Quiz# 2: Last class of
Week 14 on Modules
4 & 5 (Chapters 12, 13
& 17).
Assignment# 6:
1) Page 303: Problem
1.
2) Page 304:
Problem 2.
3) Page 548:
Problem 1.
1415
IMT 234 – PRINCIPLES OF FINANCE
Islamic financing
 Understand and explain the
reason for the growth in
Islamic financing
 Identify the challenges face
in Islamic financing
 Discuss the future of Islamic
financing
Final Exam
16
STUDENT ASSESSMENT
The major components of this course grade include:
2 Quizzes @ 5 marks each
10 marks
6 Homework Assignments
15 marks
Mid-term Exam
25 marks
Final Exam
50 marks
IMPORTANT INSTRUCTIONS
The QUIZZES & MID-TERM EXAM will be administered in class as shown on the
attached weekly schedule. Make-up exam (only for mid-term and final exams) will be
scheduled only in the event of extreme, independently verifiable, and
documentable reasons clearly beyond the student’s control. To conduct a make-up
exam or not, will be at the sole discretion of the Students’ Affairs Department at YIC; a
‘QUIZ’ will not be repeated and the student absent will receive a grade ‘zero’.
The HOMEWORK ASSIGNMENTS are available in the required textbook, and should be
submitted in a file and individually, in accordance with the time-line provided within
the course outline. Late homework submissions will attract deductions from the
maximum marks.
COURSE REQUIREMENTS:
Final course grades will be assigned according to the following scale:
Letter Grade
Average
A+
95 – 100
A
90 – 94
B+
85 – 89
B
80 – 84
C+
75 – 79
C
70 – 74
D+
65 – 69
D
60 – 64
F
Below 60
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