Institute of Business Administration

University Of Sindh, Jamshoro

Phone Numbers: +92-22-9213200, +92-22-9213181-90 Ext. 2009, Web Site:http//cba.usindh.edu.pk/Email:dir_iba@cba.usindh.edu.pk

Curriculum of BBA (Hons) P-II

COURSE DETAILS
COURSE NAME: PRINCIPLES OF BUSINESS FINANCE
COURSE CODE: 414
CREDIT HOURS: 3 CREDIT HOURS (PER WEEK)
COURSE INSTRUCTOR: DR.MARIA SHAIKH

COURSE DESCRIPTION/OBJECTIVE
This course introduces the basic concepts of Finance, Financial environment, Tax
Environment, Financial Markets Stock Exchanges, Time Value Of Money, Types Of
Financing, Financial Instruments, Capital Budgeting Decisions, Analysis of Financial
Statements, Bond and Share valuation. The Objective is to enable the students become a
successful Financial Manager and better business leaders of tomorrow after implementing the
concepts in practice learnt during the semester.

LEARNING OUTCOMES
By the end of this course it is expected that the student will be able:
 Understand the Finance and Financial environments.
 Understanding Securities Valuation and its application in the Stock Exchange..
 Capital Budgeting Techniques and its application.
 Understand the importance Portfolio creation, Financial Statement Analysis.
 Developing the Basics of Finance for more advanced financial Courses.

COURSE CONTENTS (PLAN)

Week  What is finance?

01 INTRODUCTION  What is financial management?
TO BUSINESS  Evolution of financial management
FINANCE  The goal of the firm
 Corporate governance
 Organization of the financial management function

 The Business Environment

Week  The Four Basic Forms Of Organization
02 THE BUSINESS,  The Tax Environment
TAX, AND  Corporate Income Taxes
FINANCIAL  Depreciation
ENVIRONMENTS  Handling Corporate Losses and Gains
 The Financial Environment
 Financial Markets
 Flow of Funds in the Economy
 Allocation of Funds
 Problems.

 Interest Rate
Week TIME VALUE OF  Simple Interest
03 MONEY  Compound Interest
 Future Value (Compounding)

 Present Value (Discounting)

Week  Annuities
04  Loan Amortization
 Problems.

Week  Bonds
05 LONG TERM  Conditions Favor issuing Bonds
DEBT,  Bond ratings
PREFERRED  Types of long-term debt instruments
STOCK, AND  Preferred stock
COMMON STOCK  Preferred stock and its features
 Retirement of preferred stock

Week
06  Sinking fund
 Conversion Security
 Common Stock And Its Features
 Rights of common stock holders
 Advantages of common stock issue
 Dual Class Common Stock
 Refunding A Bond Issue

Week  Distinctions Among Valuation Concepts

07 THE VALUATION  Bond Valuation
OF LONG-TERM  Preferred Stock Valuation
SECURITIES  Rates of Return (or Yields)
  Problems

Week
Mid Term
08
 Capital Budgeting
 Generating project proposal
Week CAPITAL  Project Evaluation: Alternative Methods
09 BUDGETING  Simple Method
TECHNIQUES  Payback Period (PBP)
 Discounted Cash Flow (DCF) Method
 Internal Rate of Return (IRR)
 Net Present Value (NPV)
 Profitability Index (PI)
 Problems

 Objectives
Week  Financial Statements
10  A Possible framework of Analysis
FINANCIAL  Balance Sheet Ratios
STATEMENT  Income Statement and income
ANALYSIS Statement/Balance sheet ratios.
 Trend analysis
 Common Size and Index Analysis.
 Problems.

 Trend analysis
 Common Size and Index Analysis.
Week  Problems.
11

 Objectives
 Spontaneous Financing
SHORT-TERM  Negotiated Financing
Week FINANCING  Factoring Accounts Receivables
 Composition of Short-term Financing
12
 Passive versus active dividend policy
DIVIDEND POLICY  Factors Influencing Dividend policy
Week
 Dividend Stability
13  Stock dividends and Stock Splits.
.


 Objectives
 Sources of value
Week
MERGERS AND  Strategic Acquisitions Involving common
14 OTHER FORMS OF stock
CORPORATE  Takeovers, tender offers, and Defenses.
RESTRUCTURING  Divestitures.

Week1
Project Report/Presentations
5
Week1
Final Examination
6

RECOMMENDED TEXT BOOK

1. Fundamental of Financial Management by James C. Van Horne, (Latest edition)

REFERENCE BOOKS
2. Fundamentals of Financial Management by Eugene F. Brigham, Joel F. Houston, (12th or
13th Edition)
3. Financial Management by P K Jain, M Y Khan, (5th edition)
4. Financial management by H . kent baker.
5. Brealey R.A &Myers, Principles of Corporate finance.