FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

Department of Business Administration

Course Code : FIN 2

Course Title : Business Finance

Course Prerequisite : FIN 1 – Basic Finance (3 units)

Course Credit : Three (3 units)

Course Description : This course covers the study of the fundamental principles involved in the organization, financing and management of the
different forms of business organizations. It includes the study of various matters among which are; business promotions,
fundamental concepts and tools of business finance, capital budgeting, working capital, sources of short term capital, medium
term and long term financing. Issuance and marketing of stocks and bonds are also taken up. Focus is likewise given on
analyzing the firm’s financial condition.

General Course Objectives : At the end of the course, the students are expected to:

1. Be aware of the reasons why we have and need business

2. Know the definition, aims and classifications of business
3. Be familiar with the system of free enterprise
4. Explain the functions of business
5. Discuss the steps in planning a business enterprise
6. Summarize the procedures in forming a sole proprietorship, partnership, and a corporation
7. Discuss the comparison of the types of business organizations
8. Explain the other form of business
9. State the steps in the creation of a corporation
10. Know who the corporate officers, the stockholders, and board of directors are
11. Explain the role of management in a corporation
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 12. Give the categories and goals of business finance
13. Analyze and interpret financial statements using the different tools and techniques
14. Discuss the three aspects of the capital requirements of a firm
15. Enumerate and explain the types of financial analysis
16. Discuss the financial ratios

Course Content:

Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative

Strategies Measures

Week 1  Unit I- At the end of the  Chapter 1 – The Nature and  Learn the role  Lecture  Creativity  Quiz
term, the student is Aims of Business of business in
expected to:  The role of business why do we the economy  Recitation  Flexibility
have business
 Be aware of the reasons  Business defined  Learn the  Competence
why we have and need o Purpose definition,
 business o Aims purpose,  Social
 Know the definition, aims o Classifications classifications Responsibility
and classifications  System of Free Enterprise and aims of
 of business Factors that characterize free business  Commitments
 Be familiar with the system enterprise
of free enterprise o Functions of Business
 Explain the functions of
business

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 Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures

Week 2  Unit 2 – At the end of the  Chapter II – Organizing a  Learn to  Lecture  Innovation  Graded
chapter, the student is Business organize a Recitation
expected to:  Steps in Planning a Business business  discussion  Creativity
 Discuss the steps in Enterprise  Submission
planning a business  Business Promotion  Learn the  Research  Discipline of the
enterprise  Steps involved in business various parts of research
 Defines promotion and promotion the feasibility  Group  Flexibility work
enumerate the  Divisions of promotion presentation
 activities involved in  Discovery factors in making an  Team work
promoting a business intelligent appraisal of the
 Know who the promoter is proposed business venture  Innovation
explaining the different  Assembling
types  Financing steps in financing  Creativity
 Enumerate the various  Promoter
parts of a feasibility report  Types Prospectus/Feasibility  Discipline
Study
 management study  Flexibility
 marketing study
 technical study  Team work
 financial study
 organization and management

Week 3  Unit 3 – At the end of the  Chapter III – Forms of Business  Learn the  Lecture-  Teamwork  Quiz
chapter, the students is Organizations different forms discussion
expected to: A. Types of business  Creativity
 Define sole proprietorship, 1. Single proprietorship organization
partnership and corporation 2. Partnership  Discipline
3. Corporation
B. Comparison of the Types of  Flexibility
Business
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Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures
 Summarize the procedures 1. Organization and mobility
in forming a sole 2. Operation, ownership and Cooperation
proprietorship, a partnership management
and a corporation 3. Government Regulation and
 Discuss the comparison of Taxation
the types of business 4. Liability
organizations 5. Finance
 Explain the other forms of
business C. Other forms of Business
organizations
1. Joint stock company
2. Joint venture
3. Business Trust

Week 4  Unit 4 – At the end of the  Chapter IV – The Management  Learn the  Lecture-  Integrity  Submission
chapter, the student is and Control Business managing and discussion of
expected to: Corporations control of  Discipline assignment
 State the steps in the business  Presentation
creation of a corporation A. Steps in the creation of a corporations of SEC  Social  Graded
corporation Forms/docum  responsibility Recitation
 Be familiar with the B. The corporation charter ents
corporation charter C. By –laws and organizational  Cooperation
Meetings
 Know who the corporate D. The corporate officers  Honesty
officers, the stockholders E. The stock holders
and board of directors are F. The board of directors
G. The role of management
 Explain the role of
management in a
corporation

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Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures

Week 5  Unit 5 – At the end of the  Chapter V – Fundamental  Learn the  Lecture-  Moral  Quiz
chapter, the student is Concepts and Tools of Business important discussion uprightness
expected to: Finance concepts in
A. Finance business  Seatwork and  Discipline
 Differentiate finance from 1. definitions finance and its board work
business fiancé 2. categories application  Social
3. goals of business finance  responsibility
 Give the categories and B. the financial statement
goals of business Finance C. the budget  Cooperation
1. sales budget
 Analyze and interpret 2. purchase budget  Honesty
financial statements 3. production budget
 using the different tools and 4. significance of financial
techniques statements and budgets

 Discuss the functions of the

budget

Week 6  PRELIMINARY
EXAMINATION WEEK

Week 7  Unit 6 – At the end of the  Chapter VI – Capital budgeting  Learn the basic  Class  Transparency  Quiz-
chapter, the student is A. basic terms in capital concepts in discussion Exercise
expected to: budgeting capital  Competence
1. capital expenditures budgeting  Seatwork and
 Be familiar with the basic 2. capital budgeting board work  Honesty
terms in capital budgeting 3. valuation
4. investment  Accountability
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Week Learning Objectives
 Explain the objectives of
capital budgeting
 Discuss the different
methods of economic
Evaluation
 Differentiate risk,
uncertainty and sensitivity
Week 8  Unit 7 – At the end of the
chapter, the student is
expected to:
 Know the comparison of
working capital
 Explain the relevance of
working capital in
 business operations
 Enumerate the various
sources of cash inflows
 Give the importance of cash
management, accounts
receivable management
and inventory management
Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures
5. risk, uncertainty and sensitivity
 Chapter VII – Working capital  Learn the basic  Lecture  Transparency  Quiz-
A. composition of working concept of Exercise
capital working capital  Seatwork and  Competence
B. the need of working capital board work
1. Cash requirements  Honesty
2. amounts receivables
3. inventory requirements  Accountability
C. management of working
capital
D. liquidity management
1. cash management
2. accounts receivable
management
3. inventory management
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 Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures

Week 9  Unit 8 – At the end of the  Chapter VIII – Sources of short  Learn the basic  Class  Transparency  Quizzes
chapter, the student is term capital information Discussion
expected to: A. advantages of short-term about short  Competence  Submission
credits term credit  Research of research
 Enumerate the advantages B. disadvantages of short-term instruments about short  Honesty assignment
and disadvantages of short credits and institution term credit
term credit C. the suppliers of short-term offering such instruments.  Accountability
funds instruments.
 Identify the various 1. trade creditors
suppliers of short term 2. commercial banks
Funds 3. commercial paper houses
4. finance companies
5. factors
 Explain the different types insurance companies
of short term loans

Week 10  Unit 9 – At the end of the  Chapter IX – Corporate stocks  Learn the  Lecture  Transparency  Graded
chapter, the student is A. stock financing important recitation
expected to: 1. capital stock aspects and  Group  Competence
2. dividends and retained classes of presentation
 Discuss the three aspects earnings corporate  Honesty
of the capital requirements B. classes of corporate stocks stocks
of a firm 1. common stocks  Accountability
- varieties
 Enumerate and explain the - classified common stock
classes of corporate stocks - deferred stock
- voting trust certificates
- guaranteed stocks
- debenture stock
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 Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures

Week 11  Identify the different types 2. preferred stocks  Learn the  Lecture-  Transparency  Graded
of common and preferred - provisions of preferred stocks important discussion Recitation
stocks - claiming to dividends aspects and  Competence
- voting rights classes of  PSE  Quiz
 State the important features - call ability corporate Educational  Honesty
and characteristics of - convertibility stocks tour
stocks - participation  Accountability
- classes
- advantages  Commitment
3. other stock features and  Cooperation
characteristics
- treasury stock
- par value stock
- no par value stock
- book value of stock
- market value
economic value

Week 12  MIDTERM EXAMINATION

WEEK

Week 13  Unit 10 – At the end of the  Chapter X – Corporate bonds  Learn the  Lecture  Transparency  Quizzes
chapter, the student is important
expected to: A. definition aspects and  Recitation  Competence
B. kinds of bonds classification of
 Define bond C. distinctions between bonds bonds  Presentation  Honesty
 and stocks sample of
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 Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures
 Explain the kinds and D. classes of bond  certificates  Accountability
classes of bonds E. reasons for the issuance of
 Enumerate the distinctions bonds indenture and trustee  Commitment
between bonds and stocks
 Discuss the reasons for the  Cooperation
issuance of bonds
 Know the form of an
indenture and the job of a
trustee

Week 14  Unit 11 – At the end of the  Chapter XI – Intermediate Term  Learn the basic  Class  Transparency  Quiz
chapter, the student is Financing concepts and discussion  Competence
expected to: A. advantages sources of  Honesty
B. term loans by private intermediate  Research  Accountability
 Cite the advantage of financial institutions financing about  Commitment
intermediate term financing - term lending by private institutions  Cooperation
 Classify the term loans commercial bank offering
extended by private - term lending by insurance intermediate
financial institution and by companies financing
the government
C. term loans by the
Week 15  Discuss the common government
provisions of a loan - industrial loans and
agreement guarantee fund
- guarantee fund for small and
 Present the payment medium enterprises
schedules of the various - the quedan guarantee fund
payment plans - the agricultural loans fund
lending programs of
government bank

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 Week Learning Objectives Focal Points/Topics Competencies Teaching Values Evaluative
Strategies Measures

Week 16  Unit 12 – At the end of the  Chapter XII – Financial Analysis  Learn the  Lecture  Transparen  Quiz-
chapter, the student is a. type of analysis concept of cy Exercise
expected to: - single period analysis financial  Seatwork
- comparative or trend analysis ratios  and board  Competenc
 Enumerate and explain the b. financial ratios work e
type of financial Analysis - definition
- functions  Honesty
 Discuss the financial ratio
 Accountabili
 Give the classes of financial ty

Week 17  Present a comparative ratio c. classes of financial ratios  Learn the  Lecture  Transparen  Quiz-
analysis of several firms in - liquidity ratios different cy Exercise
the industry - activity ratios classes of  Seatworkan
- profitable ratios financial d board  Competenc
- solvency ratios ratios work e
d.comparative ratio analysis
 Honesty

 Accountabili
ty

Week 18  FINAL EXAMINATION

WEEK

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Computation of Grades:

COMPUTATION OF PERIODIC GRADES

Class Standing
i. Average Quizzes (AQ) 30 %
ii. Class Participation (CP) 20 %
iii. Major Examination (PEx/MEx/FDex) 50 %
Total 100 %

Passing Grade is 70% with an equivalent point of 3.00

A. COMPUTATION OF 1ST PRELIMINARY GRADE (1st PG)

1st PG = AQ (30%) + CP (20%) + PEx (50%)

B. COMPUTATION OF 2ND PRELIMINARY GRADE (2nd PG) AND MIDTERM GRADE (MG)

2nd PG = AQ (30%) + CP (20%) + MEx (50%)

MG = 1ST PG (50%) + 2nd PG (50%)

C. COMPUTATION OF 3RD PRELIMINARY GRADE (3RD PG) AND FINAL GRADE (FG)

3rd PG = AQ (30%) + CP (20%) + FDEx (50%)

FG = MG (50%) + 3rd PG (50%)

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 D. TRANSMUTATION OF FINAL GRADE

Point Descriptive
Grade System Equivalent
95.00% 100.00% 1.00
92.00% 94.00% 1.25 Superior
89.00% 91.00% 1.50
86.00% 88.00% 1.75 Very Good
83.00% 85.00% 2.00
80.00% 82.00% 2.25 Good
77.00% 79.00% 2.50
74.00% 76.00% 2.75 Fair
70.00% 73.00% 3.00 Barely Satisfactory
Below 70.00% 5.00 Failure

Textbook : Bus. Finance for Managers: An Essential Guide to Planning Control and Decision Making,
Ray Fitzgerald, Kogan Page 2005

Resources : Rose, Peter S. c2008. Bank management & financial services. Boston : McGraw-Hill,

Liaw, K. Thomas. c2006. The Business of investment banking : a comprehensive overview. Hoboken, NJ : Wiley,

Mishkin, Frederic S. c2007. The Economics of money, banking, and financial markets. Boston : Pearson Addison Wesley,

Shih, Victor C. 2008. Factions and finance in China : elite conflict and inflation. Cambridge : Cambridge University Press,
Revised as of July 20, 2010
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Mutya, Ruby F. Alminar. 2007. Introduction to Philippine money, credit and banking. Mandaluyong City : National Book Store,

Hubbard, R. Glenn. Money, the financial system, and the economy. Boston : Pearson Addison Wesley, c2008.

JOURNALS : For on-line journals and magazines: http://search.epnet.com (EBSCO) Foreign:

Harvard Business Review

Journal of Management Education
Journal of Money Credit & Banking
Journal of Policy Analysis & Management
Management Today
Office Pro
Office Solution
Public Personnel Management
Local:
Amcham Business Journal
Journal of Business Education & Law

MAGAZINES:
Business Week
Fortune
American Chamber of Commerce’s Business Journal

WEBSITES: Online / URL:

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REVIEWED BY: APPROVED BY:

DR. MARIA TERESA A. MARTINEZ MR. EARL JOSEPH M. BORGOÑA

Program Head , Business Administration OIC Dean, IABF

Revised as of July 20, 2010

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