COURSE INFORMATION

1. Name of Course INTRODUCTION TO FINANCE

2. Course Code BUS2235
3. Name(s) of Academic Staff Norwazli Abdul Wahab
4. Semester and Year offered Semester 2, Year 2
5. Prerequisite (if any) Business Mathematics (QBA1232)
Financial Accounting 2 (BUS2231)
6. Rationale for the inclusion of the course in the The study of this course will provide students with a strong
programme foundation in finance that allows them to understand and apply
the concepts in the world of finance as well as to focus their
attention to certain issues they can further explore. It introduces
students into modern method of managing finance both on
personal and firm level. These financial theories can be applied
in everyday life, financial management and investment.

7. Course Description This course is designed to cater students with an initial

exposure of finance which applicable for both in personal and
managerial finance. At the end of the course students are able
to recognize relationship between finance and other business
disciplines, as well as to be able to use synergy of those
disciplines in decision-making.

8. Credit Value 3
9. Course Outcomes At the end of this course, student will be able to:
1. Explain the goal of the firm and the various legal forms of
business organisation. (C2)
2. Compute financial ratio analysis to evaluate a companys
performance and prepare pro forma financial statement and
cash budget for financial planning. (C3)
3. Demonstrate the significance of time value of money in
financial management. (C3)
4. Discover the various decision making techniques for both
short term and long term financial planning. (C3,A3,P4)

14. Assessment Methods and Types Methods Percentage

Quizzes 10%

Formative (50%) Tutorial Exercises 20%

Group Assignment 10%

Individual Assignment 10%

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 Summative (50%) Final Examination 50%

Total 100%
16.Content outline of the course Topic

TOPIC 1: INTRODUCTION TO FINANCIAL MANAGEMENT

Finance: A quick look
Business finance and financial manager
Forms of business organizations
The goals of financial management
Agency problem

TOPIC 2: FINANCIAL STATEMENT ANALYSIS

Understanding financial statements
Ratio analysis:
O Standardized financial statements
O Types of ratios

TOPIC 3: FINANCIAL PLANNING AND BUDGETING

Introduction
Sales forecast
Pro-forma of financial statements
Introduction to short term financial planning cash
budgeting

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TOPIC 4: CURRENT ASSET MANAGEMENT
Cash management
O Introduction
O Reasons for holding cash
O Objectives
O Cash management decisions
Account Receivable Management
O Introduction
O Credit policy:
Credit terms (APR)
Credit analysis
Credit policy
Inventory Management
O Introduction
O Objectives for holding inventory
O Inventory cost:
Carrying cost
Ordering cost
Shortage cost
Total cost of holding inventory
O EOQ model
O Reorder point
O Safety stock

TOPIC 5: TIME VALUE OF MONEY

Introduction
Compound interest
Simple interest
Present value
Future value

TOPIC 6: CAPITAL BUDGETING

Importance of capital budgeting
Capital budgeting assessment techniques
Payback period
Net present value
Internal rate of return
Profitability index
Investment classification

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 TOPIC 7: STOCK VALUATION
Characteristic of common stock
Types of common stock
Types of common stock dividend
Stock valuation model:
Dividend Valuation Model

TOPIC 8:BOND VALUATION

Characteristic of bond
Types of corporate bonds
Bond rating
Bond Pricing:
O Annual/Semi-annual compounding
O Measures of yield and return:
Current Yield
Yield to maturity
Yield to call

17. Main references supporting the course
Additional references supporting the course
1. Keown, Martin, Petty, (2011) Foundations of Finance, 7TH
Edition, Prentice Hall.
1. Gitman, Madura, , (2001) Introduction to Finance, 1st
Edition, Addison.
2. Wesley, LongmanRoss, Westerfield, Jordan,( 2004)
Essentials of Corporate Finance, 5th Edition, McGraw Hill,
3. Gitman, L. & Joehnk, M. (2011), Fundamentals of Investing,
11th Edition, Boston: Pearson Education
4. Manual compilation (for internal circulation)

18. Other additional information Nil

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