RATIONALE:
Acquiring business assets, determining how they are to be financed, and carefully managing their use is an essential activity. Efficient and competitive methods of production need to be complemented with efficient acquisition and management of resources.
REQUIRED TEXTBOOK(s) and/or MATERIALS:
Title: Principals of Managerial Finance Brief
Edition: 8th Edition
Author: Lawrence Gitman
Publisher: Pearson
Attached course outline written by: Mary Ellen Smith Date: 1998
Reviewed/revised by: Ashley Peters Date: 4/2020
Effective quarter of course outline: 19/SP Date: 4/2020
Academic dean: Lori Lothringer Date: 4/2020
Course Objectives, a Topical Unit Outline that includes Unit Objectives, and Assessment Measures must be included on this form.
COURSE PREFIX/NO: FINA 2230 TITLE: Business Finance
COURSE OBJECTIVES:
Upon successful completion of this course, students will be able to:
Upon completion of this course, the student will be able to:
Describe financial instruments and financial markets.
Analyze financial statements and prepare key financial ratios.
Determine effect of taxes on financial decisions.
Forecast financial trends.
Evaluate use of operating and financial leverage.
Evaluate working capital management and prepare cash budget and forecasts.
Evaluate capital budgeting process.
Apply long-term financing concepts involving capital markets, long term debt and leases.
Use the course specific software to:
• Evaluate risk/return and forecasting problems.
• Develop long-term financial decisions.
• Assess working capital management.
TOPICAL UNIT OUTLINE with UNIT OBJECTIVES:
Upon successful completion of these units, students will be able to:
I. THE GOALS AND FUNCTIONS OF FINANCIAL MANAGEMENT
A. Analyze forms of business organization: proprietorships, partnerships, and corporations.
B. Describe recent issues in finance and goals in financial management.
C. Describe common financial markets and financial institutions.
II. FINANCIAL ANALYSIS AND PLANNING
D. Analyze financial statements and prepare key financial statement ratios.
E. Describe the impact of inflation on financial analysis.
F. Develop discounted cash flow models for use in financial decisions.
G. Prepare cash budgets and forecasts.
H. Forecast future financial requirements
I. Describe financial leverage.
J. Demonstrate the effect of operating and financial leverage.
III. WORKING CAPITAL MANAGEMENT
K. Describe the nature of asset growth and patterns of Financing.
L. Estimate cash flow requirements.
M. Identify and analyze short-term investment options including marketable securities.
N. Describe the factors affecting inventory and receivables management.
O. Describe the factors involved in current liability financing options on profitable and risk.
IV. THE CAPITAL BUDGETING PROCESS
P. Describe and develop capital budgeting models.
Q. Demonstrate the effect of the time value of money.
R. Describe and analyze bond and stock evaluation methods.
S. Use capital budgeting models to evaluate long-term financial decisions.
T. Describe and evaluate capital structure.
U. Integrate and concept of risk into valuation models and rates of return.
V. Describe the portfolio effect.
V. LONG TERM FINANCING
W. Describe the international capital markets and the competition for funds in the U.S.
Capital markets.
X. Describe the organization and regulation of security markets.
Y. Define investment banking and the roles of the investment banker.
Z. Evaluate the use of long-term debt, stockholder’s equity, and hybrid financial instruments.
AA. Analyze dividend policy.
VI. SPECIAL TOPICS (OPTIONAL at DESCRETION of INSTRUCTOR)
A. Describe the international financial markets.
B. Identify the effects of international financial markets on the risk and return to the firm.
C. Use the course specific software to:
• Evaluate risk/return and forecasting problems.
• Develop long-term financial decisions.
• Assess working capital management
COURSE REQUIREMENTS and/or COMPREHENSIVE EVALUATION:
Upon completion of this course, the student will demonstrate cognitive knowledge of financial management concepts and will have demonstrated the ability to use financial management techniques to manage and control financial issues.
COURSE OBJECTIVES/ASSESSMENT MEASURES:
COURSE OBJECTIVES ASSESSMENT MEASURES
- Describe financial instruments and financial markets. 1. Objective exam, short essay exam.
- Analyze financial statements and prepare key financial ratios. 2. Objective exam, case analysis, problems, use of course software.
- Determine the effect of taxes on financial decisions. 3. Objective exam, case analysis, problems.
- Forecast financial trends. 4. Objective exam, case analysis, problems, use of course content.
- Evaluate the use of operating financial leverage. 5. Objective exam, problems, case analysis, use of course software.
- Evaluate working capital management-Prepare cash budgets and forecasts. 6. Objective exam problems, case analysis, use of course software.
- Evaluate the Capital Budgeting process. 7. Problems, objective exam, case analysis.
- Apply long term financing concepts involving: capital markets, long-term debt and leases. 8. Problems, case analysis, objective tests, use of course software.
Sample Solution