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Sfad Fin601
Sfad Fin601
The aim of this course is to make students learn application of financial management practices to strategic decisions
related to future financial status of enterprises. This course facilitates optimal utilization of scarce resources in a
convergence to maximize the profitability and wealth creation of an enterprise strategically, with an ambition to
grow, sustain and endure dynamic business environment.
Strategic Financial Analysis & Design (SFAD) course is emerged as a contemporary discipline by a fusion of
financial management and strategic management. This field involves a blending of the basic conceptual frameworks
of the two disciplines to provide a strategic approach towards the management of financial resources of an
enterprise. SFM intends to facilitate optimal results in financial implications of strategic decisions as well as the
strategic repercussion of decisions on financial status of the enterprise over a period of time. Thus, SFAD is an
approach to management that relates financial techniques, tools, and methodologies to strategic decision making to
have a long-term futuristic perspective on financial well being of the firm to facilitate growth, sustenance, and
competitive edge consistently.
It is believed that students must have learned in their core financial management courses the basic concepts of
finance and its management. By undertaking SFM course, students will further learn how to apply these
theory/concepts in making strategic decisions in an organization for the competitive financial position in future.
The focus of the course will be to demonstrate and impart how financial concepts can be applied to develop
strategies and solve problems in the real business world. The course will expound several analytical methods used
to cope with varied problems in financial management, and present information about the institutions having
financial management issues with the help of case studies.
b. Intellectual skills
Students should be able to:
▪ Acquire in-depth analysis financial affairs of a firm.
▪ Synthesize information and data.
▪ Create analytical thinking process to evaluate the financial affair.
3. Contents:
S
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o Topic
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1 Overview of Strategic Financial Management
& Besides class and course introductions, sharing of certain discipline/administrative points to be
2 observed/followed by the students; brief introduction of the teaching methodology to be adopted during
this course.
Proficiency test to be taken on basic financial concepts to judge the students’ understanding of core
concepts in financial management.
Sharing of importance of ethics in finance; and guide how to study, analyze and discuss case studies.
Introduction and review of strategic financial management concepts.
Learning outcome:
⮚ Understand the concept of finance & financial management; difference between strategic
financial management and financial management; and what are the roles of finance managers?
⮚ Describe the benefits of strategic financial management and major decisions to be taken by
finance managers.
⮚ Explain the goals of successful companies and what are the key attributes which lead to this
success.
⮚ Understand as to why maximizing shareholders wealth is being considered as the prime
objective of corporation, and what actions need to be taken by finance manager in pursuance of
achieving this objective.
⮚ Learn importance of ethics in finance.
⮚ Learn how to study & prepare for discussing the case study.
Pedagogy
1. Input session (students centered)
2. Lecture with discussion
3. Review and evaluation (student centered)
Learning outcome:
⮚ Reinforce the concepts related to financial statements and reports.
⮚ Differentiate between accounting, economic, and cash income.
⮚ Understand why and how of the manipulation of the bottom line.
⮚ Learn the difference and importance of economic valued addition and market value addition,
and how these values could be calculated, and performance of a firm could be assessed.
Pedagogy
1. Pre-class independent study
2. Input session (students centered)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Reinforce financial ratio analysis, and its application to evaluate performance of a business firm.
⮚ Describe what is involved in the financial statement analysis, and how different groups carry out
this analysis with different perspective.
⮚ Explain how ratios are compared with the industry average and/or with high-level performance.
⮚ Understand how these ratios could be tied together which would help in understanding the
logic behind Du Pont equation/model.
⮚ How these ratio helps in evaluating the trend analysis, and what two different types of analysis
can be used to undertake this exercise.
⮚ Describe the uses and limitations of ratio analysis.
⮚ What-else needs to be looked beyond numbers while evaluating a firm’s performance.
Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Understand basic concept & importance of planning & forecasting.
⮚ Develop forecasted balance sheets and income statements.
⮚ Understand the importance of using probabilistic information in forecasting financial
statements and evaluating a firm’s condition.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Understand the importance of working capital and its management.
⮚ Discuss how to determine the optimal level of current assets.
⮚ Understand the fundamental decision issues in working capital management-and the trade-offs
involved in making these decisions.
⮚ Explain how the financial manager combines the current asset decision with the liability
structure decision.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Understand the linkage between corporate strategy and capital budgeting and to take the
financial decisions using various capital budgeting methods.
⮚ Learn cash flow streams and its estimation; also to identify relevant cash flows for application of
capital budgeting evaluation techniques.
⮚ Learn how to develop numbers or develop cash flow forecasts in conformity with certain
principles.
⮚ Learn how to estimate cash flows of a project and identify relevant cash flows for application of
capital budgeting evaluation techniques.
⮚ Understand how to develop cash flows for replacement projects.
⮚ Learn how to evaluate two proposals having unequal life.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Interactive discussion on comprehensive case studies.
5. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Learn sources and perspective of risks involved.
⮚ Explain the sensitivity analysis, scenario analysis, break even analysis.
⮚ Understanding & applying different techniques of risk analysis and various approaches to
project selection under risk.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Learn the concept of capital structure & target capital structure; and factors that influence
capital structure decisions.
⮚ Differentiate between business risk and financial risk; and operating leverage and financial
leverage; and how these leverage impact the return on investment.
⮚ Determine the optimal capital structure of a firm.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Understand dividend policy issues.
⮚ Explain establishing dividend policy in practice by setting payout ratio and applying residual
dividend model.
⮚ Describe the factors influencing dividend policy.
⮚ Differentiate among the terms stock dividend, stock splits, and stock repurchases
⮚ Explain how stock repurchases are used to pay out cash to shareholders.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Students to solve the mini case on relevant topic as part of their assignment.
5. Interactive discussion on comprehensive case studies.
6. Review and evaluation (student centered – through oral/written quiz)
Learning outcome:
⮚ Learn reasons & mechanics of Mergers and Acquisitions.
⮚ Understand Costs & benefits of Merger.
⮚ Explain application of exchange ratios in Mergers.
⮚ Differentiate between takeover and acquisitions.
⮚ Understand difference between divestment, disinvestment and privatization.
⮚ Understand why and how Mergers and Acquisitions are done.
Pedagogy
1. Pre Class independent study
2. Input session (students centered – through oral questioning)
3. Lecture with discussion followed with some calculation exercises.
4. Interactive discussion on comprehensive case studies.
5. Review and evaluation (student centered – through oral/written quiz)
29 Final Exam
&
30 Students will be tested on their conceptual and applicative grasp of ALL the aspects of financial
management taught. The three hour test should be prepared focusing sharply on the learning outcomes
detailed above in section 2a, 2b and 2c of this curriculum read together with the learning outcomes
identified in each of the significant sessions above.
a. Two mid-terms of one (1) hour each OR one mid-term of two (2) hours in session s 17-18, and a final
exam of three (3) hours to assess subject knowledge.
b. Class participation & discussion of mini cases and comprehensive case studies, oral questions and written
quizzes during the class to assess the understanding of the concepts taught in the class.
c. Class assignments to assess their mini cases solving skills.
d. Presentation of given term assignment in the class to assess comprehension of given case studies &
presentation skill.
b. Recommended Books:
● Financial Management – Theory & Practice - By Eugene Brigham and Michael Ehahardt – Latest
Edition
● Financial Management – Theory & Practice – By Eugene Brigham & Luios Gepenski
● Fundamentals of Financial Management – By James C. Van Horne & Jhon WachoWics, Jr.
c. Periodicals, Websites
● Journal of Finance
● Business Recorder
● Investopdia.com
● Classroom PC
● Classroom multimedia and overhead projector.
● Panoramic whiteboard across front class wall along with removable markers.
● Access to a corporation for the term research project.
● Clock on back and front class wall
● Working AC, lights and fans.
_______________________
Head of Department Dean: __________________
Date: ____ /_____ /______ Date: ___ / ____ / _____