1. 2. 3. 4.

Course Title Fundamental of Finance Course Code ABMF2013 Name(s) of academic staff Pua Tong Seng Rationale for the inclusion of the course in the programme This course will equip students with the basic knowledge on financial management to enable students to understand and apply theoretical concept to a range of financial management problems and to come up with possible solutions. Objective: 1. To provide the students with basic knowledge on the role of financial management. 2. To equip the students with the knowledge on the application of financial management.

5. 6.

Semester and Year offered Semester 3 Total Student Learning Time (SLT) Total Student Learning Face to Face Time (SLT) L=Lecture T=Tutorial P=Practical O=Others L 28 T 21 P 0 O 4 67 120 Total Guided and Independent Learning Total SLT

7. 8. 9.

Credit Value 3 Prerequisite (if any) Nil Learning outcomes Upon completion of the course, students should be able to: 1. Demonstrate basic understanding of the role of financial management in creating shareholders wealth, capital budgeting, management of assets, risk and return concept, time value of money and sources of financing (C3, P2, A3) 2. Demonstrate proficiency in asset management and managing information leading to motivation to pursue higher level of study and life-long learning (LL). 3. Apply the financial management strategies using investment tools (C3, CTPS).

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10.

Transferable Skills Skills and how they are developed and assessed, Project and practical experience and Internship Transferable Skills Communicate effectively, both orally and in writing Make effective use of IT for obtaining information Work effectively within a team How they are developed Developed through tutorial and coursework assessment Developed through tutorial and coursework assessment Developed through tutorials and pair/group based coursework Assessment Assessed through coursework and examination Assessed through coursework and examination Assessed through group based coursework

11.

Teaching-learning and assessment strategy Teaching-learning strategy Lectures Tutorials Group discussions Individual/Group presentation Case Study E-Learning Independent research Independent reading Assessment strategy Assignment Presentation Written work Mid-term test Examination

12.

Synopsis This course will provide exposure to students on the essential knowledge, understanding and skills needed in financial management. Students will develop a solid understanding and knowledge of both the conceptual and practical aspects. This course will provide a basic knowledge of finance as a basic to higher finance related courses. Mode of Delivery Lecture and Tutorial Assessment Methods and Types Coursework (40%) Examination (60%)

13. 14.

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15. 16. 17.

Mapping of the course to the Programme Aims PA1, PA2, PA4, PA6 Mapping of the course to the Programme Learning Outcomes LO1, LO2, LO3 Content outline of the course and the SLT per topic Week Topic L Student Learning Time (SLT) T P O Total Guided and Independent Learning 3 6

Scope and Nature of Managerial Finance Financial management and its roles The financial staff's responsibilities Goal of the firm: profit maximization Financial Environment Introduction to financial markets Type of financial markets Purposes of financial markets Type of financial intermediaries Advantages of financial intermediaries Tools of Financial Analysis and Planning Ratio analysis: Liquidity ratio: current ratio, quick ratio Asset management: inventory turnover (days/times), debtor days Debt management ratio: creditor days, debt ratio Profitability ratio: gross profit margin, net profit margin Market value: earnings per share, book value per share The limitations of ratio analysis The users of ratio analysis Time Value of Money Differences between simple and compound interest Calculate present value and future values The concept of discounting and net present value

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Capital Budgeting (1) Introduction to capital budgeting Independent projects Mutually exclusive projects Capital budgeting techniques Net present value (NPV) Payback period (PP)

Capital Budgeting (2) Capital budgeting techniques Profitability index (PI) Internal rate of return(IRR) 4 Risk and Return Definition for risk and return Measuring expected return for single asset Measuring risk () for single asset Relationship between risk and return Overview of working capital management Working capital Working capital management Important of working capital management Working capital cycle 5 Cash and Marketable Securities Definition of cash Motives for holding cash Cash shortage and ways to overcome Definition of marketable securities Major types of marketable securities Account Receivable Management Accounts receivable management Credit policy Credit period Credit standards Collection policy Discounts Credit terms Analyzing the credit applicant 4 3 6 4 3 6

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Sources of information Credit analysis: The 5C's system Credit scoring Credit decision 4 3 6

Inventory Management Types of Inventory Why we want to hold inventories? Inventory costs Carrying cost Ordering cost Total inventory costs Economic order quantity (EOQ) Intermediate and Long Term Financing Definition of bonds Different types of bonds Advantages and disadvantages Issuers viewpoint Investors viewpoint

Short term financing Sources of financing Spontaneous sources of financing Temporary sources of financing Permanent sources of financing Equity

Common shares Advantages and disadvantages of common shares

Types of common stock Investment Strategies

Features of Preferred Stock Assessment: Coursework Examination Total Total Total SLT Subject Credit Main references supporting the course 1 3 4 0 11 14 25 4 120 3

Preferred stock

28

21

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18.

1. Brigham. E. F., Houston, J. F., Yao-Min Chiang, Hon-Sing Lee & Bany Ariffin 2010, Essentials of Financial Management, 2nd edn, Cengage Learning.

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2. Rose P.S. & Marquis, 2009, Money and Capital Market: Financial Institution & Instruments in Global Market Place, 10th edn. Mc Graw Hill. 3. Tan Simon, Treasury. IBBM.

Additional references supporting the course

1. Miskin, F.S. and Eakin, S.G., 2009, Financial Markets & Institutions, 6th edn., Pearson. 2. Fabozzi F.S. & Modigliani F., 2009, Capital Markets: Institutions and Instrument. 4th edn.,
Prentice Hall. 19. Other additional information Nil

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