COLLEGE OF SCIENCE, TECHNOLOGY AND APPLIED ARTS OF

TRINIDAD AND TOBAGO

Transforming Lives, Transforming Communities, Transforming the
Nation.One Student at a Time.

SCHOOL OF BUSINESS AND INFORMATION

TECHNOLOGY
COURSE OUTLINE
Academic Year 2012 - 2013
VISION
and innovative,

To be a student-centered, dynamic

world-class and multi- campus college,

promoting
excellence in teaching and learning, serving
diverse
communities, and producing lifelong
learners who can
compete globally.
MISSION
institution in: providing

To be the premier educational

High quality, affordable and accessible

education
programmes serving the needs of business,
industry
and the diverse campus communities and
facilitating
the personal and professional development
of its
students, faculty and staff.
DEPARTMENT
Entrepreneurship

Management

COURSE TITLE

Financial Management

COURSE CODE

FINC 205

Tracey Friday

and

CREDITS

Three (3)

PREREQUISITES :

ACCT125 Fundamentals of Accounting

REQUIRED TEXT:

Principles of Managerial Finance

Lawrence Gitman, Chad Zutter
Pearson
Latest Edition

REFERENCE TEXTS:
Ehsan Nikbakht

Finance by A.A Groppelli and

APPROVED BY:
CHAIR

DATE

COURSE DESCRIPTION
This is a required course for all Business Studies students. The
course introduces some of the basic tools and concepts of finance
and illustrates their application to practical problems faced by
individuals and businesses. The course provides the foundation for
further study of finance.
LEARNING OUTCOMES
After completing this course, students will be able to:
1.
2.
3.
4.
5.
6.
7.

Explain the role and function of the financial manager

Use present and future value tables and the financial
calculator to calculate present and future values of
money.
Assess and measure the risk and return of assets.
Value stocks and bonds
Understand the key motives for capital expenditure and
the steps in the capital budgeting process.
Evaluate capital projects, using various investment
criteria.
Identify different sources of short-term finance and their
applications.

COURSE CONTENT
Week 1: THE MANAGERIAL FINANCE FUNCTION
What is Finance?
Career opportunities in Finance
Legal forms of Business Organization
The Managerial
Finance Function
Primary Activities of the Financial Manager
The Goal of the Firm
What about Stakeholders?
The role of ethics in business
The agency issue
Students put into groups for video project/presentation
Teach the teacher group project explained. Students get put in
groups.
Week 2

& 3: TIME VALUE OF MONEY

Single Sum, Annuities, and Mixed Cash Flow Patterns
Present Value of Single Amounts
Future Value of Single Amounts
Present and Future Value of Ordinary Annuities
Present and Future Value of an Ordinary Annuity Due
Using present Value Annuity Tables
Using Future Value Annuity Tables
Present Value of a Perpetuity
Present and Future Value of a Mixed Stream

Week 4: TIME VALUE OF MONEY continued

Semi-annual Compounding
3

Quarterly Compounding
Continuous compounding
Nominal and effective annual rates of interest
Loan amortization
Finding Interest growth rates

Method of delivery: review problems

Week 5: RISK AND RATE OF RETURN

Risk and Return Fundamentals
Risk Preferences
Systematic and Unsystematic Risk
Diversification and Portfolio Risk
Week 6: VALUATION METHODS
The concept of value
Valuation of bonds
Valuation of preferred stock
Valuation of common stock
The Price Earnings Ratio Valuation method
Week 7: Class/video presentations on chosen
topics/Individual projects (20%)
Week 8: MIDTERM EXAM: Based on weeks 1 to 6 (20%)
Week 9: CAPITAL STRUCTURE

The Rational for different types of securities

Advantages and Disadvantages of holding bonds and
preferred stocks as investments and financing by
companies
The use of Rights in financing investments of a company
and valuing Rights
Relevant Cash Flows:
a. Major Cash Flow Components
b. Sunk Cost and Opportunity Costs

The Initial Cash Flow:

a. Installed Cost of a New Asset
b. After-Tax Proceeds from Sale of Old Asset
c. Change in New Working Capital
d. Calculating the Initial Investment
The Operating Cash Flow
a. After-tax Cash Flow
b. Interpreting the Term Cash Inflows
c. Interpreting the Term Incremental
The Terminal Cash Flow
a. Proceeds from Sale of Assets
b. Taxes on Sale of Assets
c. Change in Net Working Capital
The determination of basic cash flow
Week 10: FINANCIAL STATEMENT: EVALUATING A FIRMS
FINANCIAL PERFORMANCE
The Income Statement: Measuring a Companys Profits
The Balance Sheet: Measuring a Firms Book Value
Computing a Companys Taxes
Measuring Free Cash Flows
The different type of ratios
Individual Project on ratios given
Week 11: RATIO ANALYSIS

Financial Ratio Analysis

Interpreting warning signals from ratios

Week 12 & 13: CAPITAL BUDGETING TECHNIQUES

Payback Period
Net Present Value (NPV)
The Profitability Index
Internal Rate of Return (IRR)
The Average Rate of Return

Individual project (30%)

Week 14

Finding PROFITABLE projects using all information

When do we give a project the go ahead

Week 15:REVIEW
Method of delivery: sample exam paper
Week 16
FINAL EXAM 30%
TEACHING AND LEARNING STRATEGIES
The instructor will deliver lectures during each session, in order to
introduce the theoretical and conceptual issues underpinning the
course. An interactive approach will be used and students are
encouraged to participate actively in class discussions, to think for
themselves and freely express their views.
The in-class activities, assignments, group work, and readings are
very important to the teaching-learning process. This course is
hands-on and requires students to master a range of computational
skills, using tables and the financial calculator.
It is imperative that students attempt as many of the relevant
questions that appear at the end of each chapter of the text.
STUDENT EVALUATION AND GRADING
Student grades will be awarded as follows:
Mid-Term Examination
Individual Case Study
Group Case Study
Final Examination
TOTAL

20%
20%
30%
30%
100%

Quizzes
There will be no make-up quizzes.
Individual Assignments
Individual assignments will help students to prepare for the final
examination. It is very important for each student to do his/her own
work on individual assignments, as you are responsible for ensuring
that you understand the material thoroughly. It will be foolish to
simply copy an assignment from a classmate since you will learn
nothing. Individual assignments must be neatly typed, in
accordance with established standards for tertiary education. Marks

will be deducted for scrappy or poorly presented assignments. No

late assignments will be accepted.
Marks for quizzes and individual assignments will be awarded for the
following characteristics, in order of relative importance:
Accuracy of concepts and computations
Comprehensiveness
Format and presentation
Final Examination
The final examination will be administered in accordance with
COSTAATTs examination schedule. The examination will be closedbook and will be comprehensive in nature; drawing from all topics
that would have been covered in the class.
Letter Grades
A
90-100
B+ 85-89
B
80-84
C+ 75-79
C
70-74
D+ 65-69
D
60-64
F
59 and under
STUDENT RESPONSIBILITIES:
If you desire to do well in this course, you must accept the following
responsibilities:
Attend classes regularly and punctually
Complete all assignments and projects on time and in
accordance with instructions and required standards.
Actively participate in class discussions in a meaningful way
Read all assigned material before the relevant class session.
Work end-of-chapter questions
INSTRUCTOR RESPONSIBILITIES:
The instructor undertakes to:
Attend classes regularly and punctually
Be prepared for each class
Be available to students for consultations
Engage students in the teaching/learning process
Test in accordance with learning objectives