SCHOOL OF ECONOMICS, FINANCE & BANKINGUUM COLLEGE OF BUSINESSSEMESTER A151

No.Information on Course

1. Course Name : FINANCIAL MANAGEMENT

2. Course Code : BWFF2033

3. Name(s) of Academic Staff: DR. ADILAH AZHARIDR. HAMDAN AMER ALI AL-JAIFIDR. HANITA KADIR SHAHARKHARUL AZHAR RAMLIMAHFUZAH @ MASWATI SALIMDR. MD MAHMUDUL ALAMDR. MD MOHAN UDDINDR. MD SHAHIN MIARUSMAWATI ISMAILDR. SABARIAH NORDINSHAHRIZA OSMAN DR. SULAIMAN ABDULLAH

4. Rationale for the inclusion of the course in the programme:This is a core courses offered for B. Fin students.

5. Semester/Year Offered:2/1

6. Credit Value: 3

7. Pre-requisite (if any):BKAF 1023 Introduction to Financial Accounting (for B.Fin, B.Bank & B.RMI)BKAL 1023 Introduction to Business Accounting (others)

8. Objective(s) of Course :Students are expected to1. understand the goal of the firm and the basic principles in financial management.2. use the financial data to perform firm valuation and to forecast and plan firms financing.3. develop analytical skills in working capital management and short-term financing for the firm.4. fully understand the risk and return concept.5. apply the time value of money concept in the real context of financial decision making.

9. Transferable Skills:Communication, Critical Thinking and Problems Solving, Team Work and Leadership.

10. Teaching-learning and assessment strategy:Mixed method between teacher-centred and student-centred.

11. Synopsis: This introductory course to financial management provides the students with the theoretical, conceptual and practical aspects of financial management. Specifically, it focuses on short-term financial management and the financial instruments used in financial decision-making. Overall, this course covers short-term financing and current asset management which includes cash, marketable securities, accounts receivable and inventories. The financial concepts and tools to be discussed in this course are financial statement analysis, risk and return, and time value of money.

12. Mode of Delivery: Lectures, Tutorials and Discussions.

13. Assessment Methods and Types: Coursework: 50%

Final examination 50%

Total 100%

14. Content outline and contact hours per topic:

TopicHours

1.0 INTRODUCTION TO FINANCIAL MANAGEMENT 1.1 What is finance?1.2 Financial manager and financial management1.3 Legal forms of business organization1.4 The goal of financial management1.5 The agency problems1.6 Financial markets and institutions1.7 Principles underlying the financial management

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2.0 FINANCIAL STATEMENTS 2.1 The importance of financial statements2.2 Understanding financial statements2.2.1 Income Statement2.2.2 Balance Sheet2.2.3 Statement of Retained Earnings2.2.4 Statement of cash flow2.3 Taxation and depreciation from financial perspective2.3.1 Marginal vs. Average taxation2.3.2 Accelerated vs. Straight line method3

3.0 ASSESSING FIRMS FINANCIAL PERFORMANCE3.1 Uses of financial statements3.2 Standardized financial statements3.2.1 Common-size analysis3.2.2 Trend analysis3.3 Financial ratio analysis3.3.1 Liquidity ratios3.3.2 Long term solvency ratios3.3.3 Asset management ratios3.3.4 Profitability ratios3.3.5 Market value ratios3.4 Du Pont analysis3.5 Limitations to ratio analysis

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4.0 FINANCIAL FORECASTING AND PLANNING4.1 Financial planning4.1.1 Growth as a financial management goal4.1.2 Dimensions and accomplishment of financial planning4.1.3 Ingredients to financial planning4.2 Percent of sales method4.2.1 The income statement4.2.2 The balance sheet4.2.3 External financing needed (EFN)4.3 Sustainable growth rate

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5.0 TIME VALUE OF MONEY 5.1 Introduction to time value of money5.2 Simple interest5.3 Compound interest 5.3.1 Single amount5.3.1.1 Future value5.3.1.2 Present value5.3.1.3 Finding period and interest rate 5.3.1.4 Effective and nominal interest rate5.4 Annuity5.4.1 Ordinary annuity5.4.2 Annuity due5.4.3 Finding payment, period and interest rate5.5 Uneven cash flow5.6 Perpetuity5.7 Application of time value of money: Loan amortization

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6.0 RISK AND RETURN6.1 Basics of risk and return6.2 Expected returns and variances6.2.1 Expected return6.2.2 Calculating the variance and the standard deviation6.2.3 Calculating the coefficient of variation6.3 Diversification and portfolio risk6.3.1 The principle of diversification6.3.2 Diversification and unsystematic risk6.3.3 Diversification and systematic risk6.4 Systematic risk and beta6.4.1 The systematic risk principle6.4.2 Measuring systematic risk6.4.3 Calculating the beta coefficient6.4.4 Portfolio beta6.5 The Capital Assets Pricing Model and The security market line

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7.0 SHORT-TERM FINANCING AND PLANNING7.1 Importance of working capital7.2 Working capital management and the risk-return trade-off1.3 Managing current assets and current liabilities7.4 Cash conversion cycle 7.5 Strategies in working capital management 7.6 The cash budget7.7 Sources of short-term financing7.8 Cost of short-term financing

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8.0 MANAGEMENT OF CASH AND MARKETABLE SECURITIES

8.1 Difference between cash and marketable securities 8.2 Motives for holding cash 8.3 Cash management objectives 8.4 Understanding float 8.5 Managing the cash inflow 8.6 Managing the cash outflow 8.7 Investing idle cash 8.8 Characteristics of short-term securities 8.9 Types of marketable securities

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9.0 MANAGEMENT OF ACCOUNTS RECEIVABLE

9.1 Importance of accounts receivable 9.2 Terms of credit 9.3 Credit analysis 9.3.1 The 5Cs of credit 9.3.2 Credit scoring 9.4 Monitoring of accounts receivable 9.4.1 Aging schedule 9.4.2 Average collection period 9.5 Credit collection 9.6 Analysis of credit policy changes

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10.0 INVENTORY MANAGEMENT

10.1 Purposes and types of inventory 10.2 Inventory management technique the EOQ model 10.3 Reorder point and safety stock 10.4 EOQ and inflation 10.5 Other inventory management techniques3

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References:

Main reference :

Gittman, L., & Zutter, C. (2015). Principles of Managerial Finance (14th ed.). London: Pearson

Additional references:

Keown, A. J., Martin, J. D., Petty, J. W., & Scott, D. F., Jr. (2005). Financial management: Principles and applications (10th ed.). New Jersey: Prentice Hall, Inc.Ross, S., Westerfield, R., Jordan, B., Joseph, L., & Tan, R. (2012). Fundamental of corporate finance (Asia Global Edition). Kuala Lumpur: McGraw-Hill.MahfuzahSalim (2012). Fundamental of Financial Management, Questions and Solutions.

Additional Information:

Email: a.adilah@uum.edu.my Extension number: 6922 Room number: 245 SBM Building Consultation hours: Sunday & Wednesday: 2.00 4.00 pm

Email: hamdan@uum.edu.my Extension number: 6828 Room number: 233 Economics Building Consultation hours: Sunday & Tuesday: 10.00 am 1.00 pm Monday & Thursday: 11.30 am 1.00 pm

Email: hanita@uum.edu.my Extension number: 6483 Room number: 252 Economics Building Consultation hours: Monday: 9.00 am 10.30 am Wednesday: 9.00 am 10.30 am

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Email: mahmudul@uum.edu.my Extension number: 6909 Room number: 351 SBM Building Consultation hours: Monday: 11.00 am 1.00 pm

Email: mahfuzahsalim@gmail.com Extension number: 6576 Room number: 362 SBM Building Consultation hours: Tuesday: 10.00 am 2.30 pm

Email: mohan@uum.edu.my Extension number: 6822 Room number: 224 Economics Building Consultation hours: Monday: 10.30 am 12.30 pm

Email: shahin@uum.edu.my Extension number: 6910 Room number: 355 SBM Building Consultation hours: Thursday: 2.00 pm 4.00 pm

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Email: norsabariah@uum.edu.my Extension number: 6880 Room number: 234 SBM Building Consultation hours: Wednesday: 10.00 am 12.00 pm; 2.00 pm 4.00 pm

Email: sulaiman@uum.edu.my Extension number: 6911 Room number: 357 SBM Building Consultation hours: Monday: 2.30 pm 4.00 pm Thursday: 2.30 pm 5.00 pm

Email: shahriza@uum.edu.my Extension number: 6820 Room number: Economics Building

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