SCHEME OF WORK

JULY 2011/2012 SESSION

Course: FNC3033 INTRODUCTION TO FINANCE

WEEK/
DATES

TOPIC & SUBTOPICS

1.0 INTRODUCTION TO
FINANCIAL MANAGEMENT
1
25/07
31/07/11

What is finance
Goal of the firm
Legal forms of business
organization
Ten principles of Financial
Management

LEARNING OBJECTIVES

To provide the definition of

finance and its domain; and its
relation with other field of
interest.
To explain the goal of the
firm finance perspective
To compare the form of
businesses and its advantages
and disadvantages
To discuss the underlying
principles in financial
management.

Page 1 of 8

HOUR

METHOD

Lecture &
discussion

AVA

1. Text book
2. Power point
slides
3. Notes

REMARKS

Distribute and
discuss course
syllabus
Class induction
Assign
assignment

WEEK/
DATES

2
01/08
07/08/11

TOPIC & SUBTOPICS

2.0 THE FINANCIAL

MANAGEMENT
ENVIRONMENT

3
08/08
14/08/11

What is Financial Market

Movement of fund through
the economy
Component of financial
market

3.0 EVALUATE OF FIRM'S

FINANCIAL
PERFORMANCE

Income Statement
Balance sheet
Financial Ratio
Dupont Analysis

LEARNING OBJECTIVES

To explain the financial

market and financial institutions
in Malaysia.
To discuss the role of
financial manager
To discuss the component
of financial market

To discuss about the user

and needs of financial statement
To explain the components
in the income statement,
balance sheet, retained earnings
statement and cash flow
statement
To explain the ratio
categories and calculation of
ratio
To define the financial ratios
To explain the use of
financial ratios in trend and
cross sectional analysis in
valuing the companys
performance
To elaborate the DuPont
analysis and connection

Page 2 of 8

HOUR

METHOD

Lecture &
discussion

AVA

REMARKS

1. Text book
2. Power point
slides
3. Notes

Assign assignment
3

Lecture &
discussion

1. Text book
2. Power point
slides
3. Notes

WEEK/
DATES

TOPIC & SUBTOPICS

LEARNING OBJECTIVES

4.0
4
15/08
21/08/11

FINANCIAL
FORECASTING AND
PLANNING

Financial Forecasting
Percent of Sales Forecast
Method
Sustainable Rate of Growth
Financial Planning &
Budgeting

6
05/09
11/09/11

5.0

TIME VALUE OF MONEY

Compound interest and future

value
Present value
Annuities and annuities due
Perpetuities
Effective annual interest rate

HOUR

AVA

between ratios
To clarify the boundaries of
ratio analysis
To discuss the sales
forecast and financial planning
process
To explain the uses
of EFN model in order to
determine the external financing
needed.
To prepare the proforma financial statement using
the percent of sales method.
To discuss the cash
flow cycle in business

METHOD

To elaborate the concept of

time value of money and time
line
To explain the differences
between simple interest and
compound interest
To elucidate the future value
of single amount
To explain the effects of
frequent compounding towards
future value amount
To clarify the differences
between effective and nominal

Page 3 of 8

Lecture &
discussion &
exercises

Lecture,
discussion &
exercises

1. Text book
2. Power point
slides
3. Notes

1. Text book
2. Power point
slides
3. Notes

REMARKS

WEEK/
DATES

TOPIC & SUBTOPICS

LEARNING OBJECTIVES

HOUR

METHOD

AVA

interest rate
To explain the present value
for an amount un future
To illustrate the calculation
of future value and present
value for both ordinary annuity
and annuity due
To calculate the value of
uneven cash flows
To discuss on perpetuity
To elaborate on the
application of time value of
money concept in loan
amortization

MID-SEM BREAK
(29 Ogos 2011 4 September 2011)
6.0
7
12/09
18/09/11

RISK AND RETURN

The term structure of interest

rates
Expected return
Risk
Risk and diversification
Market Risk
Portfolio's beta
Required rate of return

To define risk and return

To discuss the investors
behavior towards risk
To calculate the expected
rate to return of a security
To elucidate the
measurement of risk in
investments using standard
deviation and coefficient of
variation
To discuss the diversification
concept as a method in risk

Page 4 of 8

Lecture &
discussion
1.Text book
2. Power point
slides
3. Notes

REMARKS

WEEK/
DATES

TOPIC & SUBTOPICS

LEARNING OBJECTIVES

8
19/09
25/09/11
9
26/09
02/10/11

7.0

VALUATION OF BONDS
AND STOCK

Types of bonds
Bond valuation
Expected rate of return (yield
to maturity)
Types of valuing preferred
stock
Characteristics and valuing of
common stock
Stockholder's expected rate of
return

HOUR

METHOD

AVA

reduction.
To explain the characteristic
line and beta in measuring the
systematic risk
To calculate the required rate
of return and beta of a portfolio
To discuss the importance
and the used of Capital Asset
Pricing Model (CAPM)
To discuss the effects of
inflation on rate of return
Distinguish between
different kinds of bonds.
Define the term value as
used for several different
purposes.
Explain the factors that
determine value.
Describe the basic process
for valuing assets.
Estimate he value of a bond.
Compute a bondholders
expected rate of return.
Explain five important
relationships that exist in bond
valuation.
Identify the basic
characteristics and features of

Page 5 of 8

Lecture &
discussion
1.Text book
2. Power point
slides
3. Notes

REMARKS

WEEK/
DATES

TOPIC & SUBTOPICS

LEARNING OBJECTIVES

10
03/10
09/10/11
11
10/10
16/10/11

8.0 CAPITAL BUDGETING

Finding profitable
Payback period
Net present value
Profitability index
Internal rate of return

HOUR

METHOD

AVA

preferred stock.
Calculate the value of
preferred stock.
Identify the basic
characteristics and features of
common stock.
Calculate the value of
common stock.
Calculate a stocks expected
Determine whether a new
project should be accepted
using the payback period.
Determine whether a new
project should be accepted
using the net present value.
Determine whether a new
project should be accepted
using the profitability index
Determine whether a new
project should be accepted
using the internal rate of return.
Explain how the capital
budgeting decision process
changes when a limit is placed
on the dollar size of the capital
budget, or there are mutually
exclusive projects.

Page 6 of 8

Lecture &
discussion
1.Text book
2. Power point
slides
3. Notes

REMARKS

WEEK/
DATES

12
17/10
23/10/11
13
24/10
30/10/11

TOPIC & SUBTOPICS

9.0 COST OF CAPITAL

Definition and concept
Individual cost of capital
Weighted average cost of
capital

LEARNING OBJECTIVES

Describe the concepts

underlying the firms cost of
capital
Calculate the after-tax cost
of debt, preferred stock and
common equity.
Calculate a firms weighted
average cost of capital (WACC)
Calculate a firms weighted
marginal cost of capital
(WMCC)
Use the cost of capital to
evaluate new investment
opportunities.

HOUR

METHOD

Lecture &
discussion

STUDY WEEK (07 NOV 2011 13 NOV 2011)

FINAL EXAM (14 NOV 2011 27 NOV 2011)

Page 7 of 8

AVA

1.Text book
2. Power point
slides
3. Notes

REMARKS

Page 8 of 8