University of Bahrain



UNIVERSITY INSTITUTE OF MANAGEMENT SCIENCES - PMAS- ARID AGRICULTURE UNIVERSITY RAWALPINDI

Introduction to Business Finance-MGT-424

BBA-IV- (A, B, C & AN)

Semester: Spring 2019

Course Duration 16 weeks

Credit Hours Three

Instructor Dr. Ahmed Imran Hunjra

▪ Post-Doctorate (Finance)

▪ PhD (Finance)

▪ ICMA (Operationalization Phase)

▪ MS (Finance)

▪ MBA (Finance)

▪ MSc. (Economics)

▪ BSc. (Mathematics)

Email ahmedhunjra@

Class Timings Monday (B=08:30 to 09:50; A=10:00 to 11:20; C=11:30 to 12:50 & AN=04:00 to 05:20pm)

Wednesday (=08:30 to 09:50; A=10:00 to 11:20; C=11:30 to 12:50 & AN=04:00 to 05:20pm)

Introduction

Finance is about managing your money - knowing what’s coming in and going out. By understanding your business finances, you can make rational decisions about where to spend your money and make sure you are earning enough to keep your business running. Business Finance course encompasses the entire business activity in practical life. Introduction to Business Finance is a basic course which is introduced assuming that the students do not have any prior knowledge of business finance. The course has been developed to provide basic knowledge about the principles, concepts, and terminologies which are applicable to the current business practices. This course will help students develop knowledge and understanding of finance and its methods for analyzing the benefits of various sources of finance. Further it will be possible for students to learn capital investment opportunities and application of financial technologies for business planning and control.

Course Objectives

The objective of this course is not to make students financial analysts rather to make them as comfortable as possible in an environment, which increasingly makes use of basic concept of finance, application of the basic terminologies of finance for day-to-day business decisions.

The instructor will adopt a practical, problem-solving approach for the content of this course (see Special Features below for specifics). Students have to know how to do problems.

Learning Outcomes:

Students will be able to:

❖ Understand basic terms and concepts of finance

❖ Understand the income statement and balance sheet

❖  Learn how to analyze financial information using financial ratios

❖ Understand performance measurement systems

❖ Understand the importance of and methods used to manage cash flow and working capital

Major topics to be covered:

|Weeks |Topics |Activity |

|1 |An overview of Finance | |

| |Scope of Finance and its Career Opportunities, Alternative form of Business Organization, | |

| |Finance in the organizational structure of the firm, Managerial Actions to Maximize Shareholders| |

| |Wealth, Functions of a Finance Manager | |

|2 |The Financial Environment: Markets, Institutions, and Interest Rates | |

| |The Financial Market, Financial Institutions, The Stock Market, The cost of Money, Interest Rate| |

| |Level, The Determinants of Market Interest Rates | |

|3 |Time Value of Money | |

| |Future Value Concept, Present Value Concept, simple interest rate, Compounding interest rate, | |

| |Discounting, time period, rate of return, practice the numerical questions | |

|4 |Time Value of Money and Annuity | |

| |Future Value of Annuity, Present value of Annuity, perpetuities, practice the numerical | |

| |questions | |

|5 |Discounted Cash flows |Quiz # 01 |

| |Future value of multiple cash flows, Present value of multiple cash flows, Compute loan | |

| |payments, Find the interest rate on a loan, Understand how loans are amortized or paid off, | |

| |Understand how interest rates are quoted, practice the numerical questions | |

|6 |The Valuation of Long Term Securities | |

| |Objectives, Distinctions Among Valuation Concepts, Bond Valuation, Preferred Stock Valuation, | |

| |Common Stock Valuation, Rates of Return (or Yields), practice the numerical questions | |

|7 |Risk and Return |Submission of Assignment #|

| |Objectives, Defining Risk and Return, Using Probability Distributions to Measure Risk, Attitudes|1 |

| |Toward Risk, practice the numerical questions | |

|8 |Risk and Return | |

| |Risk and Return in a Portfolio Context, Diversification, The Capital-Asset Pricing Model (CAPM),| |

| |Efficient Financial Markets, practice the numerical questions | |

|9 |Financial Statement Analysis | |

| |Objectives, Financial Statements, A Possible Framework for Analysis, Balance Sheet Ratios, | |

| |practice the numerical questions | |

|10 |Financial Statement Analysis | |

| |Income Statement and Income, Statement/Balance Sheet Ratios, Trend Analysis, Common-Size and | |

| |Index Analysis, practice the numerical questions | |

|11 |Funds Analysis, Cash-Flow Analysis, and Financial Planning | |

| |Objectives, Flow of Funds (Sources and Uses) Statement, Accounting Statement of Cash Flows, | |

| |Cash-Flow Forecasting, Range of Cash-Flow Estimates, Forecasting Financial Statements, practice | |

| |the numerical questions | |

|12 |Overview of Working Capital Management |Quiz # 02 |

| |Objectives, Introduction, Working Capital Issues, Financing Current Assets: Short-Term and | |

| |Long-Term Mix, Combining Liability Structure and Current Asset Decisions, practice the numerical| |

| |questions | |

|13 |Cash and Marketable Securities Management | |

| |Objectives, Motives for Holding Cash, Speeding Up Cash Receipts, S-l-o-w-i-n-g D-o-w-n Cash | |

| |Payouts, Electronic Commerce, Outsourcing, Cash Balances to Maintain, Investment in Marketable | |

| |Securities, practice the numerical questions | |

|14 |Accounts Receivable and Inventory Management | |

| |Objectives, Credit and Collection Policies, Analyzing the Credit Applicant, Inventory Management| |

| |and Control, practice the numerical questions | |

|15 | Short-Term Financing |Submission of assignment #|

| |Objectives, Spontaneous Financing, Negotiated Financing, Factoring Accounts Receivable, |2 |

| |Composition of Short-Term Financing, practice the numerical questions | |

|16 |Overview of the course, Internal evaluation, discussing the students problems related to subject| |

Special Features of this Course

In this class we will be using an interactive approach to learning, as well as multiple methods of learning. Thus you must be prepared to utilize all of the studying skills you have. I will suggest the mandatory and recommended reading after each class, as well as the practice questions to look at. You may also be given assignments. Expect to get a penalty of (-2) for each day that you submit the assignment late. After a particular topic has finished, you may get a ‘surprise’ quiz in the next class. However, we will have no quizzes in the first 2 weeks of class. Hence the most important thing to do is to study regularly and prepare for each class. Also bring a calculator with you to each class.

Table 1: Grade Distribution

|Type of Work | |Marks |

|Examination |Mid Term Examination |18 |

| |Final Exam |30 |

| |Sub-total |48 |

|Problem Solving |Assignments + Case studies |05 |

|Conceptual Understanding |Quizzes |03 |

| |Sub-total |09 |

|Other |Class Participation, Practice, Discipline, Punctuality |03 |

| |Total Marks |60 |

Note: The instructor reserves the right to change the above mentioned plan any time during the semester.

Tutorials: Schedule for tutorials will be announced during the semester if required.

Classroom Conduct Statement:

It is the students’ responsibility to attend all of their classes. If they miss a class meeting for any reason, students are responsible for all content that are covered, for announcements made in their absence, and for acquiring any materials that have been distributed in class. If students walk into a class after it has begun, it is expected that they choose a seat close to where they entered the room so that they do not disrupt the class.

Students are expected to follow ordinary rules of courtesy during class sessions. Engaging in private, side conversations during class time is distracting to other students and to the instructor. Leaving class early without having informed the instructor prior to class is not appropriate. Unless there is an emergency, leaving class and returning while the class is in session is not acceptable behavior. Disruptive behavior of any type, including someone is speaking, is not appropriate.

UIMS-PMAS Arid Agriculture University Rawalpindi welcomes all students into an environment that creates a sense of community of pride and respect; we are all here to work cooperatively and to learn together.

Important Instructions for Class Decorum

• 75 % attendance is mandatory.

• All classes are mobile free

• Class sanctity is top most in our agenda while class is in session.

• Punctuality is important and latecomers will be considered/marked absent in the class.

• Students have to be prepared to spread out, in a timely manner for quizzes.

• Please stick to all of the deadlines for assignments (all students), as well as “Class Issues explanations.”

• Participate fully in the class

• All volunteers who present new ideas in the class will be highly encouraged.

Recommended Book

Most of the Lectures will be from the following book:

1. James C. Van Horne & John M. Wachowicz, JR, “Fundamentals of Financial Management.” 13th Edition

Supplementary Readings

I may follow selected readings from the following text books:

• Fundamentals of Financial Management: F. Brigham & Houston” 13th Edition.

• Additional photocopied notes will be provided for the chapters.

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