Business Finance I

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Business Finance I

The objective of this course is to reinforce concepts of corporate finance previously introduced. The risk and return principle is further elaborated upon with the help of real-life illustrations. Tools and analytical techniques for financial analysis are also discussed with a perspective of short-term and long term financial management

FIN 201- Introduction to Finance

  1. It is the student’s responsibility to gather information about the assignments and covered topics during the lectures missed. Regular class attendance is mandatory. Points will be taken off for missing classes. Without 70% of attendance, sitting for final exam is NOT allowed. According to IUB system students must enter the classroom within the first 20 minutes to get the attendance submitted.
  2. The date and syllabus of quiz, midterm and final exam is already given here, however, announcements will be given ahead of time. There is NO provision for make-up quizzes.
  3. The reading materials for each class will be given prior to that class so that student may have a cursory look into the materials.
  4. Class participation is vital for better understanding of sociological issues. Students are invited to raise questions.
  5. Students should take tutorials with the instructor during the office hours. Prior appointment is required.
  6. Students must maintain the IUB code of conduct and ethical guidelines offered by the School of Business.
  7. Students must refrain from any type of cheating and/or plagiarism in a course. Any student acting otherwise will receive an “F” grade in the course. School of Business, IUB, maintains a zero tolerance policy regarding violation of academic integrity.
  1. Students are not allowed to keep bags, handouts, books, mobile phones, smart watches or any other smart electronic devices with them during any exam. Students are advised to keep everything in the front of the class room before the exam starts. Please note that, just carrying any smart electronic devises (even if the devise is turned off or put it in silent mode) during the exam will be considered as “cheating”. Moreover, during the exam, anything written on hand palms (or anywhere else) and carrying paper materials (whatever is written) will be considered as “cheating”. Any sorts of “cheating” will result in an “F” grade with no exception. During the exam, students are only allowed to carry pen, pencil, eraser, sharpener, ruler, highlighter and calculator in a clear plastic bag.
Type of Evaluation Nos. Weight
Class Attendance and Participation 100% 5
Quiz (Best two will be counted) 5 15
Project and Presentation 01 10
Midterm Exam 01 30
Final Exam 01 40
Total   100%

[Class attendance is mandatory; failure to do so may deduct the final marks]

The following chart will be followed for grading. This has customized form the guideline provided by the school of Business.

A A- B+ B B- C+ C C- D+ D F
90-100 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 0-44

* Numbers are inclusive

The course will be based mostly on the following books [some other books and journals may be referred time to time]:

  • Ross, Westerfield and Jaffe “Corporate Finance” 10th Edition (2010), McGraw Hill.

RECOMMENDED REFERENCE TEXT:

  • Brealey, Myers and Allen “Corporate Finance” 9th Edition (2008), McGraw Hill.

Link to virtual learning system: http://103.254.86.4/sb/ (School of Business – Faculty name- Login as a guest- password is 1234).

Sessions Topic Learning Outcomes Readings
Session -1 Introduction Explanation of Course Outline, Introduction to Corporate Finance, Course Outline
Session -2 Introduction        to Corporate Finance The Balance Model of the Firm, The Financial Manager, The Importance of Cash Flows, Identification of Cash Flows, Timing of Cash Flows, Risk of Cash Flows, The Goal of the Financial Manager, The Agency Problem and Control of the Corporation, Regulation Ross, Chapter1 Pages 1-19

 

Handout available             on virtual       learning system

Session -3 Raising Capital Early Stage Financing and Venture Capitalist, Venture Capital, Stages of Financing, The Public Issue, Alternative Issue Methods, The Cash Offer, Investment Banks Ross, Chapter 20

Pages 621-631

 

Handout available             on virtual       learning system

Session -4 Raising Capital The Offer Pricing, Underpricing: A Possible Explanation, The Announcement of New Equity and the Value of the Firm, The Cost of New Issue, Concept of Rights, Horngren, Chapter 20

Pages 632-641

 

Handout available             on virtual       learning system
Session -5 Raising Capital Relevant Problem Solving from Text (Chapter 20) Ross, Chapter 20

Pages 652-653

Session -6 Financial Statement and Cash Flow Different types of Financial Statements Ross, Chapter 2

Pages 20-35

 

Handout available             on virtual       learning system

Session-7 Financial Statement and Cash Flow

 

Quiz 1

Relevant Problem Solving from Text (Chapter 2)

 

 

Knowledge of Chapter 1, 20

Ross, Chapter 2

Pages 36-39

Session -8 Financial Statement Analysis               and Financial Model Common-Size Balance Sheet, Common-Size Income Statements, Ratio Analysis, The Du Pont Identity Ross, Chapter 3

Pages 44-59

 

Handout available             on virtual       learning system

Session -9 Financial Statement Analysis               and Financial Model The Percentage of Sales Approach, External Financing and Growth, Financial Policy and Growth Ross, Chapter 3

Pages 63-72

 

Handout available             on virtual       learning system

Session -10 Financial Statement Analysis               and Financial Model Relevant Problem Solving from Text Ross, Chapter 3

Pages 78-81

Session -11 Quiz 2

 

 

 

Project

Knowledge of Chapter 2, 3 Ross, Chapter 2

& 3

 

Handout available             on virtual       learning system

Session -12 Risk Analysis, Real Options,             and Capital Budgeting Sensitivity Analysis, Scenario Analysis, and Break-Even Analysis Ross, Chapter 7

Pages 209-219

 

Handout available             on virtual       learning system

Session -13 Mid Term Knowledge of Chapter 1, 2, 3, 20
Session -14 Risk Analysis, Real Options,             and Capital Budgeting Real     Option,    The    Option    to    Abandon, Decision of Trees Ross, Chapter 7

Page 220-227

Handout

 

available on virtual learning system
Session -15  

 

Leasing

Relevant Problem Solving from Text (Chapter 7)

 

Leasing, Types of Leasing, Leasing Agreements, Advantages and Disadvantages of Leasing

Gitman, Chapter 17

Pages 731-767

 

Handout available             on virtual       learning system

Session -16 Leasing Lease vs Purchase Decision Gitman, Chapter 17

Pages 731-767

 

Handout available             on virtual       learning system

Session -17 Leasing Relevant Problem Solving from Text Gitman, Chapter 17

Pages 654-687

 

Handout available             on virtual       learning system

Session -18 Short-Term Financing             and Planning Tracing Cash and Net Working Capital, The Operating Cycle and Cash Cycles, Calculating The Operating Cycle and Cash Cycles, Cash Budgeting, The Short Term Financial Plan Ross, Chapter 26

Pages 803-821

 

Handout available             on virtual       learning system

Session -19 Short-Term Financing             and Planning

 

Quiz 3

Relevant Problem Solving from Text (Chapter 26)

 

 

Knowledge of Chapter 7 and !7 (Gitman)

Ross, Chapter 26

Pages 824-828

Session -20 Cash Management Reasons for Holding Cash, Understanding Float, Float Management, Cash Collection and Connection Ross, Chapter 27

Pages 834-855

 

Handout available             on virtual       learning system

Session -21 Cash Management Managing Cash Disbursement, Investing Idle Cash

 

Relevant Problem Solving from Text

Ross, Chapter 27

Pages 786-855

 

Handout available             on virtual       learning system

 

Session -22 Credit                   and

Inventory Management

 

Quiz 4

Components of Credit Policy, The Investment  in Receivables, Terms of Sales, Analysis Credit Policy Ross, Chapter 28

Pages 856-883

 

Handout available                          on virtual       learning system

Session -23 Credit                   and

Inventory Management

Inventory  Management

 

Relevant Problem Solving from Text

Ross, Chapter 28

Pages 856-883

Session -24 Project Presentation Case Presentation Project Presentation
Session -25 Project Presentation Case Presentation Project Presentation
Session -26 Final Exam Chapter 7,14,16,17 and 20 Ross,        Chapter 7,26,27,28       and

Gitman 17

Students who are willing to audit the course are welcome during the first two classes and are advised to contact the instructor after that.

Plagiarism- that is the presentation of another person’s thoughts or words as though they were the students’ own – must be strictly avoided. Cheating and plagiarism on exam and assignment are unacceptable.

Please see the green book for further information about academic regulation and policies, including withdrawal and grading, apples and penalties for pilgrims and academic misconduct.

Students with disabilities are required to inform the School of Business/ Department of Economics of any specific requirement for classes or examination as soon as possible.