American University of Madaba

Faculty of Business and Finance

Department of Banking and Finance
Course Syllabus
Spring Semester 2020-2021

AUM
1. Course Specifics

Course Title Principles of Finance

Course Number: 0503101
Course Prerequisite(s) None
Course Co-requisite(s) None
Credit Hours Lecture: 3 CH - Lab: 0 CH
Lecture Days & Time Mon, Wed 01:00-02:30
Tue, Thu 08:30-10:00
Class Location
Course Instructor/s Lama Asfour
Syllabus Approved by:
b. Academic Committee Dr. Asem Tahtamouni
a. Department Chair .

2. Academic Staff Specifics

Office
Academic Number,
Name Office Hours E-mail Address
Rank Location and
Tel. Ext.
Mon, Wed 10:00-
Lama Asfour Lecturer BA-F31 11:30 Lama.asfour@aum.edu.jo
Tue, Thu 11:30-01:00

3. Course Components

Resources:
 Text book:
Lawrence J. Gitman, Chad J. Zutter (2014). Principles of managerial finance, 14th Edition, Pearson.

 References:
Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan (2018) Fundamentals of Corporate
Finance, 12th Edition. Mc-Graw Hill.

 On line Resources:
Amman Stock Exchange. www.exchange.jo

Course Description:

This course provides an overview of business financial management. Emphasis is on financial statement
analysis, time value of money, management of cash flow, risk and return, and sources of financing. Upon completion,
students should be able to interpret and apply the principles of financial management

Course General Objectives:

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 American University of Madaba
Faculty of Business and Finance
Department of Banking and Finance
Course Syllabus
Spring Semester 2020-2021

AUM
After completion of this course, the student will be able to:
1- Explain the concepts of finance and financial management.
2- Define the fundamental types of financial markets.
3- Evaluate the performance of the company using financial analysis.
4- Identify the concept of time value of money and its effects on the financial and investment decisions.
5- Evaluate the risk and return associated with different investments and assets.
6- Describe the concept of Capital Asset Pricing Model and its uses.
7- Explore the techniques used to evaluate bonds.

Course Intended Learning Outcomes (ILOs)/Competencies:

A) Knowledge and understanding:
 Understand the concepts and notions of Finance and financial management.
 Demonstrate an understanding of the different types of business organizations.
 Demonstrate an understanding of the basic types of financial markets.
 Understand the concept of financial statement analysis.
 Understand the concept of time value of money.
 Understand the concept of risk and return.
 Understand the concept of Asset valuation.
 Understand the concept of Bond valuation.

B) Cognitive and intellectual skills (thinking and analysis):

 Be able to interpret financial statements.
 Be able to evaluate investment opportunities.
 Be able to determine the risk and return for single asset and a portfolio.
 Be able to evaluate the performance of the company.
 Distinguish between different types of markets.
 Distinguish between different types of business organizations.

C) Communication skills (personal and academic):

 Provide a clear Idea about the firm current and future financial position.
 Provide the right conclusions about the specific projects at the right time.
 Present the Strengths and weakness points for any firm.
 Use the pricing techniques to evaluate different instruments.

D) Professional Skills:
 Understand basic finance concepts, such as the time value of money, risk and return, capital budgeting,
and financial statement analysis.
 Interpret financial statements; discriminate between accounting value and book value, and accounting
income and cash flows.
 Develop abilities to read and interpret financial reports and analyze its performance.
 Evaluate various capital budgeting alternatives using Net Present Value and other Investment Criteria.
 Compute the valuations for investment alternatives using various techniques.
 Explain the problems of profit measurement and alternative approaches to asset valuations.

E) Practical and subject specific skills (Transferable Skills):

 Apply the time value of money concept to evaluate securities.
 Estimate the risk of single asset and a portfolio and explain the capital assets pricing model (CAPM).
 Evaluate the performance of the companies.

Teaching Methods:

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 American University of Madaba
Faculty of Business and Finance
Department of Banking and Finance
Course Syllabus
Spring Semester 2020-2021

AUM
The structure of this course is elaborated throughout lectures, classroom debates, assignments, exercises, homework and
projects.

Assessment Instruments
Mark
First Exam 30%
Second Exam 20%
Quizzes, Homework and Participation 10%
Final Exam 40%
Total 100%

Course Academic Calendar

Basic and support material to be covered Homework/reports and

Weeks their due dates
Week 1: Introduction: what is finance, career opportunities in
finance, legal forms of business organization
Week 2: Goal of the firm, Managerial finance function,
governance and agency
Week 3: Financial institutions and markets, financial
statements, balance sheet, Income statement
Week 4: Financial ratios, liquidity ratios, activity ratios, debt
ratios
Week 5: Profitability ratios, market ratios, du Pount
Week 6: Time value of money, single amounts
Week 7: Single amounts, annuities
Week 8: Annuities, perpetuity
Week 9: Mixed streams, compounding interest more
frequently than annually.
Week 10: Risk and return, risk of a single asset
Week 11: Risk of a portfolio, correlation, diversification
Week 12: Security market line,
Week 13: CAPM
Week 14: Bonds
Week 15: Bond valuation
Week 16: Final Exam

Course Policies
University regulations are applied to this course, regarding class attendance; punctuality, exams, late submissions;
absence with permission; penalties for cheating; and policies for assignments and projects – if any. Students should be
aware of all these regulations in addition to other regulations stated and described in the student’s handbook.

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