BM (Hons) in Accounting and Finance

BSc in Business Management (Special)/ BSc in Business

Management (Project Management)
BM (Hons) in International Business Management

Module Handbook
Module Code: ACF 2131

Module Name: Finance Management

2022

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1. Introduction to the Module

Module Title: Financial Management

Year 2 Semester 2

1.1 Module Description

This module will cover basic concepts and calculations of the area of Finance. Financial
Management will take you through an appraisal of models and issues arising in the area of
financial management. This module introduces you to finance theory and financial management.
It covers techniques for capital budgeting, the role of risk in capital budgeting, and the cost of
capital. It introduces the topic of financial markets, covering the notion of portfolio diversification
leading to simple asset pricing models. It analyses models relating to the time value of money as
well.

1.2 Pre-requisites

None

1.3 Module Objective

The objective of this course is to provide an introductory level of understanding of major

concepts, principles and theories of financial management. It mainly focuses on the methods
and techniques available for analyzing investment and financing decisions of a firm. The entire
module is organized into twenty two sessions.

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1.4 Intended Learning Outcomes

At the end of the module student will be expected to be able to;

ILO-1 Understand the scope of financial management

ILO -2 Describe the financial environment in Sri Lanka
ILO-3 Explain the concept of time value.
ILO-4 Understand the fundamentals of Risk and Return
ILO-5 Demonstrate the fundamental knowledge regarding the cost of capital,
valuation of assets, risk and return and investment appraisal
ILO-6 Improve graduate capabilities and analytical skills

1.5 Delivery pattern

Contact Hours 45
Practical Hours 0
Independent Study Hours 105
Total Learning Hours 150

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2. Session Plan

Session/ Week Topic Discussion Areas

01 Background of Financial Evolution of financial management, definitions,

Management I balance sheet model, objectives of financial
management, business environment, financial
system
02 Background of Financial Financial markets, sources of finance, financial
Management II statements, agency problem

03 Tutorial 1 Areas covered during sessions 1 and 2

04 Time value of money I Introduction to the time value of money, reasons

for the time value of money, simple interest,
compounding interest, future value (FV),
compounding frequency, effective rate, present
value (PV)
05 Time value of money II FV and PV of uneven cash flows, ordinary
annuities, due annuities, deferred annuities,
perpetuities
06 Time value of money III Loan amortization

07 Tutorial 2 Areas covered during sessions 4,5 and 6

08 Fundamentals of risk and return Introduction to risk and return, historical return,
I and II expected return, risk of historical returns, risk of
forecasted returns
09 Fundamentals of risk and return Portfolio construction, expected return of
III portfolios, risk of portfolios, systematic and
unsystematic risks, Capital asset pricing model
10 Tutorial 3 Areas covered during sessions 8 and 9

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11 Valuation of financial assets I Share valuation: Dividend-based models, P/E
method
12 Valuation of financial assets II Bond valuation: Coupon rate vs YTM, Zero-
coupon bonds, Bonds with coupon payments

13 Tutorial 4 Areas covered during sessions 11 and 12

14 Cost of capital I Cost of debt and preferred stock Cost

15 Cost of capital II of equity: Dividend model, CAPM model

16 Tutorial 5 Areas covered during sessions 14 and 15

17 Financial and Operating Introduction, Measures of financial leverage,
Leverage Degree of Operating Leverage, Degree of Financial
Leverage, Combined Effect of Operating and
Financial Leverages
18 Working Capital Management Determinants of Working Capital, Balanced
Working Capital Position, Issues in Working Capital
Management, Sources of Working Capital
19 Tutorial 6 Areas covered during sessions 17 and 18
20 Investment appraisal I Traditional methods: Accounting rate of
return, Payback period, Profitability index

21 Investment appraisal II Modern methods: Net present value, Internal

rate of return, Equivalent annuity

22 Tutorial 7 Areas covered during sessions 19 and 20

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3. Assessments

3.1 Assessment Details

Assessment Task Intended Assessment Description Weighting Due Date

Learning (%)
Outcome

10th
1 Quiz 01 ILO1 to ILO Individual online quiz
04 which consists of 20 20% September
multiple-choice questions. 2022. The
(Time duration: 45 quiz will be
minutes.)
open from
10.00 AM to
11.00 AM.
2 Quiz 02 ILO 1 and ILO Individual online quiz 24 September
20%
04 2022. The
which consists of 20
multiple-choice questions. quiz will be
(Time duration: 45 open from
minutes.)
10.00 AM to
11.00 AM.

To be
3 End Semester ILO 1 to 6 The final examination 60% announce
Examination (Time duration: 3 hours) d

*Other relevant guidelines for the assessments will be given by the module lecturer.

3.2 Assessment Feedback

Feedback is an important element in this module. Feedback of group assignment

and mid-semester examination to be given before the semesterends.

4. Module Resources

4.1 Learning Management System

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LMS is the main repository for module resources, and you must visit the module
page regularly

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4.2 Required Reading

Pandey, I. (2015). Financial management. New Delhi: Vikas Publishing House PVT
LTD.
01

4.3 Additional Reading

1 Ross, S.A., Westerfield, Randolph.W., Jordan, B.D. Fundamentals of corporate

finance. 11th edition (2015) New York: McGraw Hill Higher Education

5. Module Delivery

Name E-mail
Module Leader Mr. Gishan Abhayagunarathna gishan.a@nsbm.ac.lk
Module Lecturer Ms. Dilini Dissanayake madu.d@nsbm.ac.lk
Module Lecturer Ms. Daupadee Gamage daupadee.g@nsbm.ac.lk