CUI Abbottabad Campus

Department of Management Sciences

Course Outline

For
Financial Management

To be taught by
--------------

During the semester

Spring 2024

To a class of
Bachelors of Business Administration

In their
4th semester

Vision: We aspire to be a leader in business education and research in Pakistan.

Mission Statement: Fostering teaching and learning through knowledge indigenization and
pedagogical innovation, rigorous research, providing impactful solutions to
business and social challenges.
Section I: Instructor’s Information

Full Name:
Email:
Contact Number:
Teaching Assistant None
Office Hours: 9AM-5AM

Section II: Course Composition

Theory (3)
Credit Hours
Laboratory
Duration 16 Week

Course Type Core Course/Selective Course(Finance Specialization)

Per week 2
Lectures
Duration of each (hours) 1.5
Per week 0
Laboratories
Duration of each (hours)

Course URL http://

Section III: Assessment Plan

Artifact Weight (%)

Quizzes 15
Assignments 10
Midterm Exam 25
Terminal Exam 50
Total 100

Section IV: Target Managerial Skill of the course

Teachers may select from the following set of skills, although they are not limited to these options.
If deemed necessary, Course Instructors can specify additional skills that may differ from those
listed below.
Teamwork, Communication skills, Presentation skills, Problem Solving Skills, Time Management,
Analytical Skills, Conflict management, Leadership skills, Decision Making, Social intelligence,
Emotional Intelligence

Section V: Teaching Methodology

Any one or combination from the following.

Method Application
Lectures 🗸
Research Papers 🗸
Hands-on-training like If the curriculum involves teaching any software, it will be
Excel mentioned here.
Project-based learning
Group Discussion / Case
🗸
Study
Guest Speaker Session 🗸
Business Games and Role
play
Film and Video Clips
Flipped Classroom

Section VI: Course Details

Course Description

“Why should I study finance?” As a student, you might be asking yourself this question right
now. To answer this question, we need to ask: What role does finance play in the successful
operation of a firm? As we will see in this subject that how financial management can help any
business to provide better products to its customers at lower prices, pay higher salaries to its
employees, and still provide greater returns to investors who put up the funds needed to form
and operate the business. Because the economy, both national and worldwide, consists of cus-
tomers, employees, and investors, sound financial management contributes to the well-being of
both individuals and the general population. Financial management is, in a real sense, the cor-
nerstone of the enterprise system, good financial management is vitally important to the eco-
nomic health of business firms, and hence to the nation and the world. Because of its impor-
tance, finance should be widely and thoroughly understood, but this is easier said than done.
The field is relatively complex, and it is undergoing constant change in response to shifts in
economic conditions. All of this makes finance stimulating and exiting but also challenging
and sometimes perplexing.

Course Prerequisites

None
Course Objectives:

To obtain an understanding and ability to use basic business financial management concepts and
tools of analysis such as valuation, capital budgeting, cost of capital, cash flow estimation for
projects and to become familiar with the various types of financing available to a firm.

Course Learning Outcomes:

After successfully completing this course, the students will be able to:

CLO Description PLO(s)

CLO 1 Discuss the different ratios used for analysis of financial PLO1
performance of a business.

CLO 2 Apply diversification concepts to select best portfolio securities PLO1,

PLO6

CLO 3 Apply valuation techniques to bonds and stocks PLO1

PLO3
PLO6

CLO 4 Identify relevant cash flows for capital budgeting projects PLO1

CLO 5 Apply various methods to analyze projects. PLO1

PLO3
PLO6

CLO 6 Apply techniques for estimating the cost of each component of PLO1
the cost of capital and to overall cost of capital PLO3
PLO6

3. 1,2,3,4 Mid-term Exam

4. 5 Assignment2
5. 6 Quiz2
6. 1,2,3,4,5,6 Terminal Exam

Learning Outcomes Assessment Plan

Required Material

Textbook:
Brigham and Ehrhardt, Financial Management, Theory and Practice(13e)

Reference Book:
 Vanhorne, J. C. and J. M. Wachowicz, (2001) Fundamentals of Financial Management,
Eleventh edition, Prentice Hall International Editions.
 Gitman, Principles of Managerial Finance 9th Ed
 Pringle and Herro, Essentials of Management Finance

Research Article:

Indigenous Content:

Major Topics to be covered in the Class.

Modul Topic Estimated

e Teaching Hours
Analysis of Financial Statements

 Financial Analysis
 Liquidity Ratios
1-2  Asset Management Ratios 3 hours
 Debt Management Ratios
 Profitability Ratios
 Trend, Common Size and Percentage Change Analysis

Risk, Return and the CAPM

 Returns on Investments
 Stand-alone risk
 Risk in a portfolio, beta calculation
 Relationship between Beta and the CAPM

The Cost of Capital

3-4-5-6 12 hours
 The weighted average cost of capital
 Costs of debt, preferred stock and common stock
 Comparison of methods for determining cost of common
stock
 Factors affecting WACC

1.

2.
 The Basics of Capital Budgeting: Evaluating Cash Flows

 Payback Period, Discounted Payback Period

 Net Present Value
7-8  IRR 6 hours
 MIRR
 Profitability Index

Cashflow Estimation and Risk Analysis

 Conceptual Issues
 Analysis of Expansion Project
 Risk Analysis in Capital Budgeting
9-10-11  Measuring stand-alone risk 9 hours
 Sensitivity Analysis
 Scenario Analysis
 Replacement Analysis
 Phased decisions and decision trees
Dividends to Shareholders: Dividends and Repurchases

 An Overview of Cash Distributions

 Procedures for Cash Distributions
 Cash Distributions and Firm Value
 Clientele Effect
 Information Content, or Signaling, Hypothesis
 Implications for Dividend Stability Setting the Target Distri-
bution Level: The Residual Distribution Model
 Stock Splits and Stock Dividends 587
12-13-
12 hours
14-15 Capital Structure Decisions

 A Preview of Capital Structure Issues

 Business Risk and Financial Risk
 Capital Structure Theory
 Capital Structure Evidence and Implications
 Estimating the Optimal Capital Structure
 Anatomy of a Recapitalization
 Deleveraging
 Investment in Marketable Securities

Note: Any other item that explains teaching process/is beneficial for students can be added
like contact hour policy, dishonesty policy etc.