Al-Abbas University for Business Management

Department of Business Administration

Financial Management (FIN 4022)
COURSE OBJECTIVE

This course provides some basic concepts, including the economic and financial environment, financial
statements analysis, risk analysis and valuation process. Then the course moves on and discusses how
specific techniques and decision rules can be used to help maximize the firm’s value.

COURSE DESCRIPTION
This course aims to introduce students the decision-making process in the area of finance and the tools
to facilitate it. The course examines: Financial Statement Analysis, the stock and bond valuation and
capital budgeting decisions.
COURSE PREREQUISITES
 Business Finance (FIN 3011)
LEARNING OUTCOMES
At the end on this course the student will be able to understand:
 Role of financial planning and control– financial forecasting and cash budgeting tools – in
planning for the firm’s financial requirements
 Long term financing –venture capital, equity, debentures etc
REQUIRED COURSE MATERIALS AND READINGS
Text Book: Eugene F. Brigham: Fundamentals of Financial Management
Reference Books: Ross, Westerfield, Jordan: Corporate Finance Essentials.
Jemes C. Vanhorne: Fundamentals of Financial Management

EVALUATION
You will be evaluated based on the following components according to the following weights:
Components and Weights
Mid-term examination 30%
Class participations (assignments, presentations, quizzes, projects and field work) 30%
Final Exam 40%
Total 100%

POTENTIAL MODIFICATIONS TO THE COURSE

The instructor and university reserve the right to modify elements of the course during the term. The
university may change the dates and deadlines for any or all courses in extreme circumstances. If either
type of modification becomes necessary, reasonable notice and communication with the students will
be given with explanation and the opportunity to comment on changes.
COURSE OUTLINE AND BREAK UP

Week Topic

Introduction to the Course

1 Week
st
Increasing Importance of Financial Management
Alternative Forms of Business Organization, Manager’s Responsibilities
Analysis of Financial Statements
2 nd
Week Financial Statements and Reports
Ratio Analysis, Common Size Analysis
Time Value of Money
Simple present value and Future Value
3 &4
rd TH
Week Present Value of Annuity, Future Value of Annuity
Uneven Cash flow Stream, Perpetuities,
Effective Rate of Interest, Amortized Loans
Risk & Return
Relationship between Risk and Rate of Return, Risk in a Portfolio Context
5th & 6th Week
Measuring Portfolio Risk, calculating beta coefficients
C.A.P.M
Bonds & Their Valuation
Types and Characteristics of Bonds, Bond Valuation
7th & 8th Week
Bond Yields
Bonds with Semiannual Coupons
9th Week MID-TERM EXAMINATION
Stocks and Their Valuation
Rights and Privileges of Common Stock Holders, Types of Common Stocks
10th & 11th
Common Stock Valuation, Constant Growth Stocks,
Week
Expected Rate of Return on Stocks,
Stock Valuation for Non-Constant Growth Rate, Preferred Stocks
The Cost of Capital
12 Week
th
Capital Components and Costs
Cost of Debt, Preferred Stock and Common Stock, Weighted Average Cost of Capital
The Basics of Capital Budgeting
Importance of capital budgeting and decision rules
Identifying Relevant Cash flows
13th, 14th &
Capital Budgeting techniques: Payback period, Discounted Payback Period
15th Week
NPV and IRR Methods
MIRR, Profitability Index,
Comparison of All Methods