Department of Management Sciences

Course Outline

For
Financial Management

To be taught by
Tabassam Rashid

During the semester

Fall 2022

To a class of
Bachelors of Business Administration

In their
4th semester
COMSATS University Islamabad, Abbottabad Campus
Pakistan
Contents

Instructor’s Information................................................................................1
Course Composition........................................................................................ 1
Course Description.......................................................................................... 1
Course Prerequisites....................................................................................... 2
Learning Outcomes.......................................................................................... 2
Required Material............................................................................................ 2
Other Recommended References..............................................................2
Assessment Plan............................................................................................... 3
Major Topics to be Covered in the Class.................................................3
Mapping Course Learning Outcomes and Program Learning Outcomes
Section I: Instructor’s Information

Full Name:
Email:
Contact Number:

Teaching Assistant None

Office Hours: 9AM-5AM

Section II: Course Composition

Theory (3)
Credit Hours
Laboratory

Duration 16 Week

Course Type Selective Course(Finance Specialization)

Per week 2
Lectures
Duration of each (hours) 1.5
Per week 0
Laboratories
Duration of each (hours)

Course URL http://

Section III: Course Description

“Why should I study finance?” As a student, you might be asking yourself this question
right now. To answer this question, we need to ask: What role does finance play in the
successful operation of a firm? As we will see in this subject that how financial manage-
ment can help any business to provide better products to its customers at lower prices, pay
higher salaries to its employees, and still provide greater returns to investors who put up
the funds needed to form and operate the business. Because the economy, both national
and worldwide, consists of customers, employees, and investors, sound financial manage-
ment contributes to the well being of both individuals and the general population. Finan-
cial management is, in a real sense, the cornerstone of the enterprise system, good finan-
cial management is vitally important to the economic health of business firms, and hence
to the nation and the world. Because of its importance, finance should be widely and thor-
oughly understood, but this is easier said than done. The field is relatively complex, and it
is undergoing constant change in response to shifts in economic conditions. All of this
makes finance stimulating and exiting but also challenging and sometimes perplexing.

Section IV: Course Prerequisites

None

Section V: Vision & Mission Of the Department

Vision: We Aim Excellence in Grooming Business Leaders through Quality Teaching
and Research

Mission Statement:
 Business Education: Excellence in Business Education through specialized and updated teaching would be
achieved in a friendly but focused environment. It shall cover the whole Horizon of Business community with
special interests in problem solving and future development.
 Research: High impact focus research of international standards for corporate and social groups shall be a regu-
lar part of imparting education through case studies and incubational business models.
 Leadership: Also reaching out the community and society with the purpose of providing solution to the prob -
lems and adding betterment to the existing setup. Based on Business Education and Research the prime objec -
tive is the creation of a diverse pool of dynamic leaders.

Course Objectives:
To obtain an understanding and ability to use basic business financial management concepts and
tools of analysis such as valuation, capital budgeting, cost of capital, cash flow estimation for
projects and to become familiar with the various types of financing available to a firm.
Course Learning Outcomes:
After successfully completing this course, the students will be able to:

 CLO 1-Discuss the different ratios used for analysis of financial performance of a
business. (PLO1)
 CLO 2: Apply diversification concepts to select best portfolio securities. (PLO 1, PLO6)
 CLO 3: Apply valuation techniques to bonds and stocks. (PLO 1, PLO3, PLO6)
 CLO 4: Identify relevant cash flows for capital budgeting projects (PLO 1)
 CLO 5: Apply various methods to analyze projects. (PLO 1, PLO 3, PLO6)
 CLO 6:Apply techniques for estimating the cost of each component of the cost of capital
and to overall cost of capital. (PLO1, PLO3, PLO6)

Learning Outcomes Assessment Plan

Sr.# Course Learning Outcomes Assessment
1. 1,2 Assignment1
2. 3 Quiz1
3. 4 Assignment2
4. 4 Quiz2
5. 1,2,3,4 Mid-term
6. 5 Assignment3
7. 5 Quiz3
8. 6 Assignment4
9. 6 Quiz4
10. 1,2,3,4,5,6 Terminal

Section VII: Required Material

Text Book:
Brigham and Ehrhardt, Financial Management, Theory and Practice(13e)

Section VIII: Other Recommended References

 Reference Book:
 Vanhorne, J. C. and J. M. Wachowicz, (2001) Fundamentals of Financial Manage-
ment,Eleventh edition, Prentice Hall International Editions.
 Gitman, Principles of Managerial Finance 9th Ed
 Pringle and Herro, Essentials of Management Finance

Section IX: Assessment Plan

ARTIFACT WEIGHT (%)

Quizes 15
Assignments 10
Sessional Exam 25
Terminal Exam 50

Total 100

Section X: Major Topics to be covered in the Class

Topic Estimated
Module
Teaching Hours
Analysis of Financial Statements

 Financial Analysis
 Liquidity Ratios
1-2  Asset Management Ratios 3 hours
 Debt Management Ratios
 Profitability Ratios
 Trend, Common Size and Percentage Change Analysis
 Risk, Return and the CAPM

 Returns on Investments
 Stand-alone risk
 Risk in a portfolio, beta calculation
 Relationship between Beta and the CAPM

The Cost of Capital

3-4-5-6 12 hours
 The weighted average cost of capital
 Costs of debt, preferred stock and common stock
 Comparison of methods for determining cost of common
stock
 Factors affecting WACC

1.

2.
The Basics of Capital Budgeting: Evaluating Cash Flows

 Payback Period, Discounted Payback Period

 Net Present Value
7-8 6 hours
 IRR
 MIRR
 Profitability Index

Cashflow Estimation and Risk Analysis

 Conceptual Issues
 Analysis of Expansion Project
 Risk Analysis in Capital Budgeting
9-10-11  Measuring stand-alone risk 9 hours
 Sensitivity Analysis
 Scenario Analysis
 Replacement Analysis
 Phased decisions and decision trees
 Dividends to Shareholders: Dividends and Repurchases

 An Overview of Cash Distributions

 Procedures for Cash Distributions
 Cash Distributions and Firm Value
 Clientele Effect
 Information Content, or Signaling, Hypothesis
 Implications for Dividend Stability Setting the Target Dis-
tribution Level: The Residual Distribution Model
 Stock Splits and Stock Dividends 587
12-13-
12 hours
14-15 Capital Structure Decisions

 A Preview of Capital Structure Issues

 Business Risk and Financial Risk
 Capital Structure Theory
 Capital Structure Evidence and Implications
 Estimating the Optimal Capital Structure
 Anatomy of a Recapitalization
 Deleveraging
 Investment in Marketable Securities